NAMA in Ireland - capitalism at work
NAMA is nothing short of straight class robbery – robbery from ordinary workers in order to shore up the property developers and big bankers who got us into this mess in the first place. It can be described as unfair, it can be described as immoral but in reality it’s naked capitalism at work.
‘The market’ decides everything except when ‘the market’ doesn’t work (when it doesn’t work for the wealthy that is). For ordinary people the property market hasn’t been working right throughout the ‘Boom’. Loads of us haven’t been able to get anywhere near affording to buy a home, and those of us who have been ‘lucky’ enough to do so have found ourselves forced to take out exorbitant mortgages which will leave us paying back a huge proportion of our wages to the banks for the next 25, 30 or even 35 years. A market that saw property prices driven through the sky and saw massive profits made by a small number of bankers, developers and speculators was never in the interest of ordinary workers.
Now many of us find ourselves ‘owning’ (well paying for at least) homes worth less than what we paid for them - negative equity is the nice word that the economic commentators use for it. And despite wage cuts, job freezes, increased taxes and levies we’re expected to continue making the exorbitant payments. There’s no bailout proposed for us, we’re left with no choice but to continue to pay for these homes, to continue to shell out our hard-earned money for our very own toxic assets.
Speculators and Politicians
For the developers and the bankers the last few years have proven to be the sort of period they could only have dreamt of before. ‘The market’, manipulated by the speculators and their politician friends through tax breaks, control of land rezoning and the creation of an artificial property bubble, brought them untold wealth. The Fianna Fail tent at the Galway races became the crude manifestation of the dirty interface between politics and property speculation. And as they made their billions they thought the party would never end.
Liam Carroll, Sean Dunne, Sean Fitzpatrick, Michael Fingleton, Michael O’Flynn and the rest of them were feted by the media as heroes of the new Ireland who we were all supposed to look up to. And for them ‘the market’ was certainly working.
But suddenly now ‘the market’ isn’t working for them any more. They’ve gambled the sort of money that most of us wouldn’t even see on a monopoly board. They’ve salted away the multi-billions in profits that they’ve made over the past number of years. But their latest gamble hasn’t come off so ‘the market’ can now be ignored and ordinary workers will be left to pick up the bill they’ve run up.
They deny responsibility for causing the crisis, they continue to live in their mansions and they sit back and laugh at the rest of us who they presume are stupid enough not alone to pay their bill but then to hold open the door of their limos for them while they set off to start the gamble again.
Buy their losses
Because that’s what NAMA’s all about. We’ll leave them with their profits (No sign of a National Profit Sharing Agency over the last few years), but we’ll buy their losses. NAMA will dump all the losses of the speculators on the shoulders of society in general – in other words on the shoulders of ordinary workers. We’ll be paying the price for generations.
The toxic assets will be taken into ‘public ownership’ with something between €30billion and €60billion of our money (or maybe even more). Being the clever businessman that he is, Brian Lenihan is going to pay a ‘projected market value’ for these loans. In other words he’s going to re-commence the gamble, he’s going to pay what he hopes the property involved will be worth at some unspecified time in the future.
To justify this he and his so-called ‘experts’ claim that the property price dip has
bottomed out and that prices will soon begin to rise again. If that’s the case, however, why aren’t all the clever ‘entrepreneurial’ capitalist businessmen queuing up to buy all this cheap property? Perhaps because they know what everyone knows – the toxic assets are more toxic than asset and are probably worth nothing either now or in the future.
The scary thing about Lenihan’s ‘projected market value’ is that it indicates that government policy post-NAMA will be all about re-commencing the property bubble. If the economy isn’t to go completely bankrupt, whoever is Minister for Finance will have to manipulate yet again the property market to try to realise the ‘projected market value’. So if they have their way, we’ll be back on the merry-go-round with all of us a lot poorer and our public services slashed while the developers get on with business as usual.
Bust to boom and back again
Because that’s capitalism, that’s how it works – from bust to boom and back to bust, then off we go again. This cycle of boom and bust is not an aberration, it is part and parcel of how capitalism works. When the boom comes, investment flows in. But because of too many people looking for a slice of the action, and getting too greedy for an even bigger slice of it, we end up with overproduction at which point the bottom falls out of ‘the market’ and there are loads of unwanted products.
This leads to redundancies and closures, and therefore less consumer spending – which in turn leads to even more job losses. While the good times roll the bosses rake in the profits. When they end, the workers are discarded.
The current recession differs in its intensity – both because the product on which the boom was built (property) was not productive in the real sense of the word and because the intensity of the gamble was so great. But the drop into recession is simply following the path that capitalism always takes. Yet again the rich cream it and the workers get discarded
There is also more to this recession than simply another bust in the ‘boom-bust’ cycle. The latest phase of capitalism – usually referred to as neo-liberalism – saw huge growths in global financial markets. This involved a move away from getting profits from production towards a global move to getting profits from investment in the financial markets. So what we’re seeing on a global level is the collapse of the neo-liberal phase of capitalism. The property gamble in Ireland added in our own unique twist to this and has resulted in a deeper and more dramatic bust here than in most other economies.
One thing that’s clear is that the proposed ‘solutions’ will leave us counting the cost for a long time to come. The plural ‘solutions’ is deliberately used here because there is no doubt that the proposals from both Fine Gael (the creation of a ‘good bank’) and Labour (nationalisation of the banks) would be just as useless as NAMA. There’s no need in this article to analyse either of these strategies. Suffice to say that neither proposal does anything to tackle the basic inherent unfairness of protecting the rich and making the ordinary worker pay the cost. They differ only in the way in which the pain will be inflicted on us.
Even Eamon Gilmore, leader of the Labour party, has seen the cause of the crisis. In the Irish Times on 10th September he is quoted as saying "What we have to do is replace the boom-and-bust economics, which got us into the problem in the first place, with a much more sustainable form of prosperity, with a much fairer society."
But he doesn’t take the logical step from there – if he wants to “replace the boom-and-bust economics” then surely he needs to replace its cause. Because it is only if we tackle the very existence of the capitalist system that we can hope to avoid continuing the repetitive cycle of boom and bust and look to build an economic system that is based on need rather than greed. Surely for all of us the real question should be – when this recession is over, what type of society will we live in? If we are going to learn anything from this mess, it has to be that we need to fundamentally re-assess just how we run our society. We cannot continue to live in a way that puts the greed of the few above the needs of the many. The ‘free market’ so beloved of capitalism works in the interest of a tiny few and leaves the vast majority either in poverty or just getting by.
Build a new society
Anarchism is a political ideology that seeks to build a new society where power is taken away from the unaccountable few and taken back by the many; a society which is run in the interests of the majority – the working class. Anarchists believe that the wealth of society should be commonly owned and that its resources should be used to serve the needs of humanity as a whole rather than those of a greedy minority.
Just as importantly, anarchists believe that the struggle against capitalism must be one for freedom. Freedom and socialism must go hand in hand. The bedrock on which they can both be built is true democracy. Anarchism is about taking control of and democratising our workplaces and our communities. It’s a challenge for each of us to take control of our own lives and begin the process of building a new society.
A truly free and democratic society cannot be built by any political party or small group of individuals. It involves everyone taking responsibility and contributing ideas and energy to looking to bring it into existence. If you think that it’s crazy that this capitalist boom-bust cycle should continue, and if you think it mad that society should continue to be run in the interests of the few, then maybe you should find out more about anarchism. Why not check out www.wsm.ie and find out more.
First published on indymedia.ie
There is an 'Alliance Against Cuts' demonstration this Saturday against NAMA. under the slogan 'Stop The Cuts! No More Bail Outs! Protest!' starting at 13.00 at Parnell Square.
The Dublin WSM branches are mobilising for this and the 1st of May branch in particular is putting out a call for a distinct anarchist / libertarian bloc on the march. We'd like to invite you to take part in that bloc. In order to maximise numbers we are asking people to meet up at 12.30 outside the Ambassador at the Parnell Monument as previous experience is that if a demonstration is large unless we meet beforehand it can be hard to find each other on the march. We'll have our banners and a good number of plain red & black flags for the march, we'd like you to similarly bring banners, placards etc and help make this a very visible bloc.
Two weeks after the NAMA march will see the coming together of the Social Solidarity Network at Seomra Spraoi, an event called by Workers Solidarity Movement , Revolutionary Anarcha-Feminist Group and members of the Seomra Spraoi collective but which is open to all. Meeting up and marching together this Saturday will help build towards this important event.
We hope to see you on Saturday
1st May branch - WSM
For information on the 'Alliance Against Cuts' demonstration see 'http://www.indymedia.ie/article/93620
For information of the Social Solidarity Network see http://www.indymedia.ie/article/93882
For WSM writings, audio and video on NAMA and the crisis see http://www.wsm.ie/notonama