e-Marketing: Nov 29, 2010

Thousands Protest Irish Nightmare Economy

Leo Panitch: US created financial crisis and European banks turned the Irish Miracle into a nightmare

Transcript

PAUL JAY, SENIOR EDITOR TRNN: Welcome back to The Real News Network. Over the weekend in Ireland, thousands of people demonstrated against austerity measures and against bearing the burden of the Irish crisis. Just how did the Irish miracle turn into the Irish nightmare? Now joining us from Toronto is Leo Panitch. He's a distinguished research professor at York University, teaches political science there, and he's the author of the book In and Out of Crisis: The Global Financial Meltdown and Left Alternatives. Thanks for joining us again, Leo.

LEO PANITCH, PROF. POLITICAL SCIENCE, YORK UNIVERSITY: Hi, Paul.
JAY: So, in your view, how do we get from this miracle economy of Ireland with so low unemployment, and apparently a booming middle class, to bust?
PANITCH: Well, we got to it via the bust of the financial sector that Ireland certainly didn't cause. It was very much a American-made crisis. But insofar as a good part of the Irish boom involved Irish Banks borrowing short in order to lend long to their property boom, and to some extent to lend to foreign investors who were creating jobs, a lot of them American companies but borrowing from Irish Banks, the result of that when the financial boom ended in the United States was that the knock-on effect meant that Irish banks were virtually bankrupt. And one of the first places on the face of the earth that that was felt apart from Iceland was Ireland, and the Irish government immediately guaranteed all bank deposits. And insofar as they did so, they socialized, took onto the public shoulders the private debt of the banks. And you see the consequences.
JAY: So people are saying what happened is the banks bet, helped create a real estate bubble in Ireland. They bet on it, they lost the bets, and now the Irish people are being asked to bail them out. Is that a fair [inaudible]
PANITCH: Yeah. And, you know, Ireland didn't have a large public sector deficit, but it now does by virtue of having taken on the burden of the private sector banking deficit. And the result of that is what you see with the Irish debt, the Irish fiscal debt, not being willing--the banking sectors, especially in Europe, who provided most of this lending, not being willing to, as I said before, roll over that debt, not being willing to, in other words, lend any more when Irish bonds come due.
JAY: Paul Krugman wrote a piece recently where he compares what happened in Ireland to Iceland, where he said Iceland took a different approach towards a somewhat similar situation. What do you make of that?
PANITCH: Yeah. They tried to make the Dutch and the British bear some of the burden and came under a lot of pressure from the Dutch and the British for this and had to compromise somewhat, but they did spread it around a little. But you shouldn't think that the Icelandic people [inaudible] to carry most of that burden they have. Now, I must say, this is now a larger situation. And when the Germans, who always do this, since they never want to take responsibility for this themselves, it always falls more on the American state to organize the bailout. The Germans said that in the future, beginning in 2013, the banks ought to be taking some of the haircut themselves, rather than have the EU states lend--or the IMF for the Americans--lend the Irish state the money, provided they engage in this terrible austerity program. And as soon as the German banks heard that, and not only the German banks, they all the more wouldn't lend money to Ireland, because they didn't want to be caught holding Irish debt if they were going to be the ones who would have to take any of the haircut for this.
JAY: So first the banks get saved by the Irish state, and then they beat the hell out of the Irish state 'cause they may not be able to pay off the debt the Irish state took on to save them.
PANITCH: That's the situation, and there's nothing new about this.
JAY: Brilliant system. So what are Irish people demanding? What do you think they should be? What's the alternative for Ireland?
PANITCH: You know, the austerity program involves raising the sales tax--the value added tax, as it's called there--to 23 percent (look at the hysteria here in Canada when we have a combined sales tax of 15 percent), that at a time when corporate taxes in Ireland are famously at 12 percent and it is being pledged that they will not be raised. And I might point out that the American corporations that have been the largest investors in Ireland in terms of manufacturing investment and exports from Ireland are threatening they'll pull out unless this 12 percent corporate tax is maintained. So you see the enormous class inequity that's built into this, the enormous demonstrations that have taken place in Ireland. And they're not new. They occurred last year when austerity measures were introduced as well, and being led by a very, very moderate corporatist trade union leadership, which doesn't want to engage in any class mobilization--less radical than the AFL-CIO, but they're being forced into undertaking these demonstrations by virtue of the anger of the people. They're not demanding nearly enough. It's a very, very defensive set of demands they're engaged in. As I've argued before, the only real solution here is for Ireland to lead the way by defaulting on the debt, to do what Argentina did at the beginning of this century. But that will mean, and I hope it will mean, a much more radical set of responses in Europe, not only in Spain and Portugal and Greece, but much more broadly, whereby people are given a lead in terms of not just socializing the private banks' bad debts but actually nationalizing the banking system and turning it into a public utility. It'll mean breaking up the European Union, but reconstructing it on a basis of democratic and cooperative economic planning, where the money, our money that passes through the banking system, the people's money, is actually allocated in a democratic way. That--we have had a banker's Europe, a Europe based on free capital flows. It is inevitably one that was highly volatile, inevitably producing one crisis after another. And Ireland is facing the brunt of it at the moment. Greece faced it a few months ago. Portugal's [inaudible] to face it at all.
JAY: But what do you make of the argument that the reason these countries are in difficulty is 'cause there's too much entitlement programs, the pension age is too low, unemployment insurance is too high, and so on?
PANITCH: I think it's ludicrous. This isn't the problem. The problem is not that Irish workers are too well off. The problem is the enormous wealth inequality, and above all inequality in power, and irrational investment that has gone on in these countries. And it will mean, if people are going to try to maintain something like the civilization that we've known, it'll mean redefining what our standard of living is. It will mean that we will not be able to engage in the kind of individual consumption, and have to turn to the kind of collective services that would be so rational and so needed--much more, much more extensive public transit and freer public transit, rather than private transit through automobiles that reproduces the ecological crisis and worsens it. But the answer is not that, you know, the Irish working class (give me a break) is so well off and wealthy, much less the Greek one. Now, it's true that many of these states are corrupt and are indeed the kinds of states that are built on clientalism. The type of democracies we've had there, the types of capitalist democracies we've had there, have involved bribing people, bribing people to--through agreeing to let them not pay as much taxes or any taxes, through giving them kickbacks, etc.
JAY: And you're using the public sector to make politicians rich.
PANITCH: Yes, and engaging in the type of relationships between politicians and capitalists that are indeed very, very unsavory, which involve, if not corruption, certainly scratching your back if you scratch mine. So there's no sense pretending that these have been, you know, wonderful democratic societies. And when one's calling for a different kind of economy, one needs to call for a different kind of state.
JAY: Thanks very much for joining us, Leo.
PANITCH: Good to talk to you, Paul.
JAY: Thank you for joining us on The Real News Network.
End of Transcript

Imagine it! – Post-It Challenge

Imagine it! – Post-It Challenge

Posted on: August 7, 2009
Posted in: Imagine it!

As part of Entrepreneurship Week 2007, Stanford University created an Innovation Challenge; asking students to take an everyday item (Post-Its) and create value. The remarkable program received thousand of participants at hundreds of universities in dozens of countries. The documentary shares their stories and offers perspectives from competition and university officials, celebrated authors and entrepreneurs from around the world.

Imagine it!² Ch11: Is Science Art?

Imagine it!² Ch11: Is Science Art?

Posted on: July 23, 2009
Posted in: Clough, G. Wayne, El-Baz, Farouk, Imagine it!², Vest, Charles

This film is about connecting imagination and creativity with science and engineering in education. The 52-minute film is designed provide a forum for discussion around the power of big ideas in action and to inspire people to imagine a better world, to unleash their creativity and then take action to solve global challenges.

In the film, there is a chorus of voices joining a movement to get creative thinking and the arts back into schools and connect those with science and engineering (STEM education). Imagine it!” helps the public have a better understanding of the importance of science, engineering and technology and inspires the next generation of innovators.

The film reports on the promise of a new youth culture engaging their curiosity to change the world, empowered by science, technology, education…and desire.

Play All

Chapter 1: A New Generation (01:04) It’s positive. It’s about the future. It’s about what’s possible.

Imagine it!², Chapter 01: A New Generation (01:04) from imagine it project on Vimeo.

Chapter 2: The Future (04:20) Unleash the power of your imagination to solve the global challenges facing society.

Imagine it!² Chapter 02: The Future (04:20) from imagine it project on Vimeo.

Chapter 3: Apollo Challenge (06:45) A half century ago, the U.S. set a goal of reaching space and engaging every citizen in that historic mission.

Imagine it!² Chapter 03: Apollo Challenge (06:45) from imagine it project on Vimeo.

Chapter 4: X-Prize (04:07) Today, millions of dollars in prizes go to the people who bring about radical breakthroughs for the benefit of humanity.

Imagine it!² Chapter 04: X-Prize (04:07) from imagine it project on Vimeo.

Chapter 5: Grand Challenges (05:24) The National Academy of Engineering has identified 14 Grand Challenges awaiting engineering solutions in the 21st century.

Imagine it!² Chapter 05: Grand Challenges (05:24) from imagine it project on Vimeo.

Chapter 6: New Generation (01:33) Inspire and prepare students to seize the opportunity to change the world through science, technology, engineering, and math.

Imagine it!² Chapter 06: New Generation (01:33) from imagine it project on Vimeo.

Chapter 7: Challenges for Education (03:15) Encourage curiosity and creativity to put your students on a path to making the world a better place.

Imagine it!² Chapter 07: Challenges for Education (03:15) from imagine it project on Vimeo.

Chapter 8: Inspire Teachers (02:48) The great hope for the future rests with the quality of our teachers.

Imagine it!² Chapter 08: Inspire Teachers (02:48) from imagine it project on Vimeo.

Chapter 9: The WOW in Education (01:54) Spark a sense of wonder and excitement in a new generation by connecting science and engineering with humanities and art.

Imagine it!² Chapter 09: The WOW in Education (01:54) from imagine it project on Vimeo.

Chapter 10: The Arts (01:23) The arts have always been important, but today, more than ever we need creative thinking to meet global challenges.

Imagine it!² Chapter 10: The Arts (01:23) from imagine it project on Vimeo.

Chapter 11: Is Science Art? (01:27) If ever there was a time for a scientific renaissance, now is it.

Imagine it!² Chapter 11: Is Science Art? (01:27) from imagine it project on Vimeo.

Chapter 12: Opportunities in Education (05:57) Create new and innovative ways to engage and educate the next generation.

Imagine it!² Chapter 12: Opportunities in Education (05:57) from imagine it project on Vimeo.

Chapter 13: Be Curious (02:54) Curiosity is an emotion that causes natural inquisitive behavior such as exploration, investigation, and learning.

Imagine it!² Chapter 13: Be Curious (02:54) from imagine it project on Vimeo.

Chapter 14: Mindset (01:45) Challenges are actually opportunities for you to create innovative solutions.

Imagine it!² Chapter 14: Mindset (01:45) from imagine it project on Vimeo.

Chapter 15: Risk & Reward (02:17) The risk is in not uncovering new discoveries. The reward is to continue humanity’s strivings for a better world.

Imagine it!² Chapter 15: Risk & Reward (02:17) from imagine it project on Vimeo.

Chapter 16: Finding Your Element (02:45) Solving challenges will take all of us. Seizing opportunities will take all of you. The world is waiting to find it what’s inside of you.

Imagine it!² Chapter 16: Finding Your Element (02:45) from imagine it project on Vimeo.