EVEN if Babe didn't convince you that pigs are pretty smart, a recent edition of Jay Leno's Tonight show on American television should have done. Newt Gingrich, leader of the right wing revolution in American politics, was Leno's guest. As Conor O'Clery reported from Washington in Tuesday's Irish Times, Gingrich likes to have himself photographed with cuddly animals, just to show that he's not really nasty. Leno produced two piglets, giving one to Newt and holding on to the other. Leno's snuggled quietly into his arms, but Newt's "squealed and shrieked in fear".
The pig obviously understood something basic about the New Right even when they're trying to look soft hearted, they are really weighing you up for the market. Our native brand of free market liberalism, the Progressive Democrats, also try to look cuddly, kind to small children, dumb animals and the poor. But I suspect they would also fail the piglet test. Any vulnerable creature placed in their warm embrace would do well to squeal and shriek.
In Wednesday's Irish Times, the party leader, Mary Harney, replied to my column last week about the Packard closure, protesting against my claims that it was wrong to blame high taxes. I don't want to go back over the argument, but it is important not to let some of what she said go by default. If we can't understand what happened in Packard, we have no chance of dealing with its consequences. And if we can't grasp what PD policies really mean, then we have no chance of a real debate about the critical issues for Irish politics.
Much of Mary Harney's reply need not be addressed because it depends on a trick of the tongue that elides the difference between two very different statements. One is a statement, which I did make, that Packard did not close because of the levels of income tax on its workers. The other, which I did not make, but which Mary Harney takes issue with as if I had, is that there is no connection between unemployment and high taxes on low paid workers.
WHAT I actually wrote was that Cutting taxes for lower paid workers makes great sense, in itself, but it is blindingly obvious that it has nothing to do with Packard's decision to close Tallaght." Mary Harney doesn't find it obvious, but the IDA, for instance, does. It said last week that "the writing was on the wall three years ago" when Packard failed to invest in cost efficient manufacturing procedures. A company's costs have to do with productivity, which has more to do with investment than wages.
Even supposing that wages were the real issue, how would lower taxes on Packard workers have allowed the plant to compete with plants in, say, Turkey? Packard said its product could be produced in developing economies for one tenth of what it costs in plants like Tallaght.
Even if taxes on the Packard workers had been halved and their gross wages had stayed the same, the company would have saved about a sixth of its wage bill. How is that supposed to make up the gap between costs at Tallaght and costs in developing countries that are 10 times lower?
Mary Harney is right to say that there is a broad consensus on the need to cut taxes for lower paid workers. What she leaves out is the other side of that consensus that these cuts should be paid for by increasing tax on the better off. Combat Poverty, in its submission on the 1996 Budget, linked its call for tax relief for lower paid workers to a proposal that residential property tax should be retained and, ideally, enhanced" by including all types of property, increasing the yield from the present £9.5 million to £100 million.
YET on the same day that Mary Harney replied to me in The Irish Times, her colleague Michael McDowell was an its the party would be stepping up home owners how "the tax could avoided". The fact is that the property tax is one tax that doesn't fall on the low paid the bottom 30 per cent of earners hold just 2.5 per cent of the total housing wealth. Yet the PDs want to get rid of it without suggesting alternative ways of taxing wealth.
The top 1 per cent of Irish people own about 30 per cent of the country's wealth the top 5 per cent own about 60 per cent. All of the economic policies advocated by the PDs would, on international experience, increase this concentration of wealth at the top. And what, meanwhile, would happen to those at the bottom?
According to Mary Harney in her reply, neither she nor her party "have ever advocated" cuts in wages or social services. Here is what Mary Harney told the PD conference in Cork in September 1994, in her keynote first speech as party leader.
"This country cannot afford high wages we need a low wage economy where people keep more of their disposable income, not high wages where they pay just more and more tax. And because people can't get jobs at the Programme for Competitiveness and Work rate in this economy, we say to them you can't have a job at all, because to have a job below the PCW rate would exploit you. So you must stay at home and wait. What do they do in other countries? In Hong Kong, for example, a very successful economy, people work for low wages. They're not rich, but they're happy and they cope. They've dignity and self esteem and they have independence ... I think we should look for a few examples from there."
How do you get a "low wage economy" where "people work for low wages" and where it is OK for employers to pay less than the agreed minimum rates unless you cut overall wage levels? And how, if you cut income taxes and don't replace them with property and corporate taxes, do you sustain the high levels of government spending necessary to maintain social services?
The honest answer is that you don't. And that answer is implicit in the examples that Mary Harney thinks we should follow Hong Kong and New Zealand. What these countries have in common is that the former never developed a welfare state and the latter dismantled the one it had.
If Mary Harney would say this straight out, instead of using the names of countries as euphemisms for New Right economics, she would not have to pretend that she has "never advocated" propositions contained in her own speeches.
You can't cut taxes for the rich, cut taxes for the middle class, and cut taxes for the low paid while still maintaining social services at their present levels. The last time we heard this kind of voodoo economics, stuffing the cracks in basic logic with political Polyfilla about "revenue buoyancy", was from Charles Haughey in the early 1980s, when Mary Harney was among his most stringent critics. Neither can you pander to middle class resentment about some of the lowest property taxes in Europe while inviting the unemployed to work for poverty wages. If you do, any smart piglet will squeal.