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Pat Rabbitte interview… May 5, 2012

Posted by WorldbyStorm in Uncategorized.

…in the Mail, interviewed by Jason O’Toole. And very interesting it all is too. Rabbitte eschews minders and advisors for the interview. And he speaks quite openly, but for all that you’d be hard pressed to sense any particular ideology at work. Anyhow, let’s hear it from the man himself…

Here he speaks about his own mention by Mahon:

Rabbitte himself was up in front of the Mahon Tribunal after he took a donation of £2,000 from political lobbyist Frank Dunlop shortly before the 1992 General Election. He later returned the money. Does he now feel it’s a case of ‘there, but for the grace of God, go I’? ‘Ah, not really. That’s the point. It wasn’t a big deal. I think people don’t appreciate what fighting a general election is like. ‘ Some people think I had nothing else to do but go down to the bank and send it back. I sent it back immediately after the election. The Mahon Tribunal praised the action — they said it was commendable. ‘I felt it exposed me to a conflict of interest. I was a councillor as well as a TD at the time and in those circumstances I felt… I didn’t know. I don’t want to pretend that I knew 15 years before a tribunal that I knew there would be a tribunal, I didn’t. But I just felt that there was a potential conflict of interest.

The bank guarantee…

Rabbitte pulls no punches, however, when it comes to Ahern’s successor, Brian Cowen. He believes the former Fianna Fáil leader should be questioned over the bank guarantee as well as about the allegation made, in this paper, by banker David Drumm that Seán FitzPatrick, his former boss at Anglo Irish Bank, was one of Cowen’s political advisers. ‘The Finance Committee of the Dáil or the Public Accounts Committee, whichever is the most suited, should enquire into these matters,’ Rabbitte says. ‘It is unbelievable that here we are two years later and we don’t know what happened on the night of the biggest decision that has been made since we got independence.’

And what about the fallout from that particular event:

Alarmingly, he believes we could be paying the heavy price of getting Ireland out of these banking debts for at least 50 more years. ‘In terms of the 20 to 40-year-olds, for them it is the most grave imposition that has ever happened on a generation of young people. They will be paying for it for their rest of their working lifetimes, and that’s why some young people are leaving the country. ‘That’s why we have to continue to press for some alleviation of debt because debt sustainability remains an issue. We were fortunate to be able to avoid having to pay the first promissory note — the €3.1billion. But we have to continue our discussions with the Troika to seek further restructuring of the debt.’

Er… what was it that his leader said at the recent conference about a couple more harsh budgets?

Anyhow, what about other issues?

Based in the working-class constituency of Clondalkin, south-west Dublin, the father of three daughters — two are teachers and one lives in Milan — is all too aware of the public’s frustrations. He confesses to not being surprised by the backlash to the Household Charge, which he colourfully describes as a ‘kick in the a*** for the Government’. Worryingly, Rabbitte admits that he now fears a similar backlash to the upcoming referendum on the Fiscal Compact Treaty — or the ‘Stability Treaty’ as the Government prefers to term it. ‘Yes, I am worried because of the gravity of the issues that are involved and the implications of leaving ourselves without a life raft. The Household Charge was going to be problematic because people have taken punishment for four years and have seen their wages diminish and their young people emigrate or lose their jobs. It’s been a really horrific recession and they were waiting to give the Government a kick in the a***. ‘There is no reason at all to be complacent about the Stability Treaty. This is a huge challenge. People have taken a lot of punishment — and some people are preoccupied with other issues than the Treaty — and we have to be very careful, therefore, because we leave ourselves without a life jacket if we reject the Treaty and we need access to funds.’

And the opposition to these?

The Government is being accused of scaremongering as it attempts to push the Treaty through. Are we really facing a doomsday scenario if it’s rejected? ‘I would never use terms like that. It would worsen the uncertainty, it would deepen the instability. ‘Our biggest problem at the moment is the lack of stability in the eurozone. Unless we get stability, we’re running fast to stand still. The treaty is a prerequisite of stability, stability is a prerequisite of investment, and investment is a prerequisite of jobs.’ But what about the recent report in a Sunday newspaper which quoted an IMF source as saying that we could simply rely on the International Monetary Fund solely, rather than joint bailouts from the Troika, in the future? ‘I really regret how that has been misrepresented by some of the No lobby. What the paper said was that you could make application to the IMF. But you can make application to the Bank of Ireland as well — it doesn’t mean that they are going to give you a loan. What the IMF made plain to us is that for eurozone states they will only lend in partnership with the ESM (European Stability Mechanism). ‘People don’t understand that the IMF is not a bank; the IMF doesn’t have a currency; the IMF doesn’t sell bonds. I think people are confusing it with the European Central Bank. ‘The IMF won’t have the money, frankly. Christine Lagarde is going around the world at the moment trying to get member countries of the IMF to give more money. She doesn’t have the money.’

And more on the opposition…

He doesn’t appear too worried about how his party is dramatically falling in the polls. ‘When I look across the House, there is no alternative government available to the Irish people. There is a dilapidated, clapped-out, hapless rump of a Fianna Fáil party left. There is an aggressive hypocritical Sinn Féin, who seem to have made a calculation that the worse things get, the better for Sinn Féin. And then you have a ragtag alliance of eccentric Independents whose economics are off the wall.

Which leads him to the conclusion:

‘So, this Government had to succeed and, in that sense, we’re bedded into the business of government at the moment. There is a general election scheduled for four years away, so it’s too early to say.’

But what about the 50 years?

And day to day, what of the coalition?

Speaking of separation, there has been much speculation in the Dáil corridors lately that there’s a lot tension between the coalition parties. ‘It’s a healthy tension,’ Rabbitte insists. ‘The Government is working well together. The problems are too big to afford to any kind of solo runs.’ But what about the speculation that Labour are furious with the manner in which Environment Minister Phil Hogan handled the Household Charge debacle? ‘I think that however he handled it the Irish people were waiting in the long grass on the Household Charge,’ Rabbitte says diplomatically.

On the subject of the new property tax, what does he make of the argument that there should be some kind of concession made to those who paid out astronomical stamp duty during the Celtic Tiger boom years? ‘I think maybe there’s an argument for that. The Household Charge will morph into a property tax and it will have regard to site value and ability to pay and so on. We have to include property tax or else the alternative is to put more taxes on work.

‘I don’t know how Richard Boyd Barrett and Joe Higgins get away with complaining about piling on more taxes, yet they’re going to find the €10billion that they admitted on Wednesday is now necessary. You can’t pile €10billion of taxes on to Irish taxpayers, therefore we have to broaden the tax base.’

And finally matters spiritual…

Minutes before our interview began, Tánaiste and Labour Party leader Eamon Gilmore said he personally believes that Cardinal Seán Brady should resign over the shocking revelations about his role in failing to report Father Brendan Smyth’s sexual abuse of children. Does Rabbitte share that view? ‘I don’t accept that a 35-year-old ambitious rising cleric can now present himself as a mere note-taker. So many young people would have been spared pain and suffering if he had acted like a normal citizen would act if made aware of a marauding paedophile in their midst.’ Should he resign? ‘Well, that’s a matter for the Church itself. I’m entitled to comment on the crimes, I don’t want to comment on the organisation of the Church’s hierarchy.’


1. CL - May 5, 2012

Rabbitte’s views are identical to those of John Bruton in today’s Irish Independent.
No ideology? Just the erroneous notion that excessive government expenditure is the cause of the current crisis and that stability can be restored by the Fiscal Austerity Treaty. The budgetary deficits of Ireland, Spain and Portugal are symptoms, not causes of the crisis.
Systemic instability is inherent in capitalism. The history of capitalism is the history of economic crises, depressions, recessions, booms, bubbles and busts.
Bruton and Rabbitte are right-wing propagandist ideologues, acting in bad faith to obfuscate the nature of the crisis. ‘Stability’ will not be restored by the Austerity Treaty and by attacking workers living standards; increasing inequality aggravates the crisis.
Embedding German ordoliberalism in Irish law is a futile attempt to deal with capitalism’s inherent instability; the Bruton/Rabbitte propagandist offensive should be seen for what it is.


2. 1798Mike - May 5, 2012

Pat Rabbitte is a career establishment politician, who long ago traded in the last vestiges of any earlier ideals for a professional cynicism and a readiness to pander to corporate interests.
Rabbitte faced an absolutely critical litmus test earlier as a minister, when he had the opportunity to postpone awarding oil/gas exploration licenses under Fianna Fail’s banana republic ‘give-a-away’ conditions and instead develop much more economically advantageous set of terms. He failed the test – just as the Irish Labour Party has failed nearly every test it faced in the last 100 years.


3. EWI - May 5, 2012

‘I don’t know how Richard Boyd Barrett and Joe Higgins get away with complaining about piling on more taxes, yet they’re going to find the €10billion that they admitted on Wednesday is now necessary. You can’t pile €10billion of taxes on to middle-class and wealthier Irish taxpayers, therefore we have to broaden the tax base by hitting the poorer-off.’

There, fixed it for him. Free of charge.


Tomboktu - May 6, 2012

It would be useful if some of the Irish economists could replicate a recent German study on the Irish situation.

A Wealth Tax on the Rich to Bring Down Public Debt?
Stefan Bach, Martin Beznoska and Viktor Steiner
The idea of higher wealth taxes to finance the mounting public debt in the wake of the financial crises is gaining ground in several OECD countries. We evaluate the revenue and distributional effects of a one-time capital levy on personal net wealth that is currently on the German political agenda. We use survey data from the German Socio-Economic Panel (SOEP) and estimate the net wealth distribution at the very top, based on publicly available information about very rich Germans. Since net wealth is strongly concentrated, the capital levy could raise substantial revenue, even if relatively high personal allowances are granted. We also analyze the compliance and administrative costs of the capital levy.

(PDF is here)


CL - May 6, 2012

‘Large economic stimulus programs were launched to fight the recession. In most advanced economies, budget deficits exploded and public debt rapidly increased’-Bach, Beznoska, Steiner, in their paper, A Wealth Tax on the Rich? p.3
Those calling for ‘stimulus to growth’, including now the Labour Party, need to explain why, despite the massive Keynesian stimulus in response to the recession, Eu growth is again declining.


4. Jim Monaghan - May 6, 2012

“despite the massive Keynesian stimulus in response to the recession,”
Where was this. As far as I can see it was just money into banks and not into real investment. I would call this wasted money. Like here where the pension fund and more went into the failed banks.
A huge public works program is needed across Europe. Big and small stuff. A new Channel Tunnel. Metro in Dublin.
They would find the money for a war and have.Look at Libya and Afghanistan.
Capitalism at this stage is hugely stupid.
We need an internal Marshall plan for Europe.


CL - May 6, 2012

, -budget deficits exploded and public debt rapidly increased’-Bach, Beznoska, Steiner, in their paper, A Wealth Tax on the Rich? p.3-
This happened across the OECD countries in the aftermath of the crises. In Keynesian terms such increases in deficits are a stimulus, i.e. an addition to aggregate demand. Clearly this increase in public demand was insufficient to compensate for the collapse to private demand, hence the colossal increases in unemployment.
The massive expansion of the money supply by the ECB and by the Federal Reserve has not worked either; real interest rates are already at or near zero, and what’s missing is the inducement to invest,-an inducement which is lacking because of the collapse of overall demand.
A public works program only affects aggregate demand if it is financed by a deficit; if it is financed by taxation it has no effect on demand. (abstracting of course from distributional effects) Even with a Hollande victory in France it is doubtful if we will see a massive public works program financed by deficits. And no such program is politically possible in the U.S, despite the deepening unemployment crisis.
Neither Keynesianism nor austerity offers a solution to the crisis. Hence capitalism’s dilemma.


CL - May 6, 2012

-“It is absolutely essential to generate growth but this can only be accomplished by supply-side measures and is no longer possible through state spending programmes,” the Hollande team told the German diplomats.-


5. Paddy M - May 8, 2012

When I look across the House, there is no alternative government available to the Irish people. There is a dilapidated, clapped-out, hapless rump of a Fianna Fáil party left. There is an aggressive hypocritical Sinn Féin, who seem to have made a calculation that the worse things get, the better for Sinn Féin. And then you have a ragtag alliance of eccentric Independents whose economics are off the wall.

Pat might want to ask his comrades in PASOK about what can happen in an election if things go badly wrong, coherent alternative government or no coherent alternative government.

Arrogance is the anvil tied around this government’s neck.


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