What's another (terrible) year?
Unemployment wasn’t falling significantly: about 350,000 workers had disappeared from the Irish economy since 2007. Government debt isn’t 79 per cent of GDP, but more like 120 per cent. It would actually be very nice if things were only as bad as they were predicted to be three years ago.
The best that could be said for 2012 is that it brought some clarity. Two big illusions were shattered. One was the idea that it was somehow possible to keep taking money out of the economy and, at the same time, to have a sustained economic recovery. This notion had some superficial plausibility because, on the face of it, this is what happened during the last great recession, in the late 1980s. Back then, the government cut spending rapidly, and somehow the economy began to grow steadily before shifting into overdrive in the mid-1990s.
Different type of recession
The problem, though, is that this recession looks nothing like the one in the 1980s. Back then, our lucky stars all came into alignment: the high-tech boom in the US generated huge investment; the EU was in generous, expansionary mode, with Ireland still its poor little pet; the fall of the Berlin Wall and the end of the Cold War unleashed a huge expansion in global trade. Back then, too, the State may have been broke but Irish citizens had relatively low levels of personal debt.
Now, of course, the global picture is bleak: the model of capitalism that has been in the ascendant since 1980 is in a deep crisis but nothing has come along to take its place. And this time both the State and a majority of its citizens are bust. There’s no Jacques Delors to pump billions in structural funds into the Irish economy: if anything, the flow of money is going the other way as German and French banks and bondholders extract billions in bank liabilities from Irish citizens.
The idea that the private economy would take up the slack as public spending was slashed has proven to be entirely hollow. There’s a simple reality that too many people have too little money to spend. The tracking survey by the Irish League of Credit Unions found that 1.85 million people now have less than €100 at the end of the month after paying all their bills. More than 1.3 million have less than €50 left. An extraordinary 42 per cent had to borrow money to pay bills within the previous 12 months. Eight out of 10 respondents worry that they won’t be able to cope with rising energy costs this winter. For a very large swathe of middle and working Ireland, money is increasingly and unbearably tight.
The other shattered illusion is the belief that change was going to come from above. The last general election, in 2011, produced the most radical election in the history of the State, with the humiliation of the once-mighty Fianna Fáil. It felt like a seismic reshaping of Irish politics. By the end of 2012, it certainly didn’t feel like that any more. The new Government had settled, with remarkable ease, into familiar patterns. The most obvious one, of course, was the straitjacket of the troika “bailout” programme, with its parallel universes of austerity for citizens and lavish spending for dead banks.
But the familiarity was apparent in other, smaller, ways too. Minister for Health James Reilly’s remarkable discovery of hitherto unknown criteria for selecting the areas most in need of primary care centres (“One and one makes two and two and two make four but four by four makes 16 and not four and four makes eight and so it is with this. It’s a logistical, logarithmic progression, so there is nothing, there is nothing simple about it.”) looked, to those of us who were less mathematically talented, like old-fashioned stroke politics. The only apparent difference being that a Fianna Fáil minister might have found more subtle ways of making sure that the complex formulae produced the most politically advantageous results.