Economy

In the midst of talk about Ireland’s exit from the Troika programme and recovery supposedly in sight, the mortgage crisis affecting hundreds of thousands of ordinary people is being deliberately understated.

For years now workers have been told by right-wing politicians and economists that we need to tighten our belts whilst waxing lyrically about “green shoots of recovery”.

Recent Central Bank figures on mortgage arrears reveal an enormous crisis brewing. With all of the focus on the hundreds of austerity measures this government are implementing, the relentless rise in mortgage arrears numbers has, so far, not gotten the attention it deserves.

The Socialist Party’s budget statement can be read and downloaded here. Or to download it as a PDF,…

Introduction

The crisis faced by working people, the unemployed, students and pensioners in Ireland is a crisis of capitalism. While the crash in Ireland has had its own special features related to the property bubble and an historic over reliance on Foreign Direct Investment, this should not obscure the fact that capitalism, a system based on private ownership of key sections of the economy as well as economic activity being geared towards profit and not need and the absence of rational planning of resources, is a crisis prone system that has to be replaced.

The tragic death by suicide of former Priory Hall resident Fiachra Daly has put the exploding mortgage crisis centre stage. The brave decision by his partner Stephanie Meehan go public at this difficult time for her family has put the human face to the tragedy of this financial meltdown.

Despite government spin there is no momentum behind economic growth – austerity is failing working people. The CSO this week released the latest live register figures that showed a marginal drop in unemployment.

World financial markets have been rocked again in recent days. First came the US Fed’s announcement last Wednesday (19 June) that it could start to unwind its cheap credit policy of ‘quantitative easing’ by year-end. The following day financial markets were stunned as a liquidity crisis gripped China’s state-owned banking system, with major banks all but refusing to lend to each other. This ‘credit crunch’ reflects growing fears over the unsustainable surge in debt levels across the Chinese economy, and its growing reliance on the opaque and unregulated shadow banking sector.

The one section of the the establishment which has so far escaped scot-free are the auditing firms, in particular the “Big 4”, KPMG, PWC, Ernst & Young and Deloitte. These firms gave a clean bill of health to the banks as late as 2008.

The severe downturn in 2008-09 made the world economy into an experimental workshop. But neither extreme austerity or trillions to the banks has led to a solid recovery. Now there is growing concern among politicians and economists.