Who Profits from Peace? Belfast Trades Council Mayday Lecture 2013
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Who Profits from Peace? Belfast Trades Council Mayday Lecture 2013

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Belfast Trades Council, 1 May 2013.

Belfast Trades Council, 1 May 2013.

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Who Profits from Peace? Belfast Trades Council Mayday Lecture 2013 Presentation Transcript

  • 1. Belfast Trades CouncilMayday LectureDr. Conor McCabeEquality Studies CentreUCD School of Social Justice2 May 2013
  • 2. 1. Monetary policy2. Financialisation3. Finance, Insurance, Real Estate [FIRE]4. Privatisation5. TINA
  • 3. 11 May 2010Dear Chief Secretary,Im afraid to tell you theres no money left.Sincerely,Liam Byrne.chief secretary to the Treasury.
  • 4. “The British Government hasrun out ofmoney because all the moneywas spent inthe good years.”George Osborne, 25 February2012
  • 5. “So we cannot just carry on as we are. Unless we reform oureconomy - rebalance demand, restructure banking, and restore thesustainability of our public finances - we shall not only jeopardiserecovery, but also fail the next generation.”Mervyn King,TUC Conference, 15 September 2010.
  • 6. 5 March 2009. QE : £75billion10 October 2011. QE : £75billion2009 – 2011. corporate bondpurchase via asset purchasefacility : £375 billion2012: Monetary PolicyCommittee approve a further£50 billion.“So we cannot just carry on as we are. Unless we reform oureconomy - rebalance demand, restructure banking, and restore thesustainability of our public finances - we shall not only jeopardiserecovery, but also fail the next generation.”Mervyn King,TUC Conference, 15 September 2010.
  • 7. “In the European context tax rates are highand government expenditure is focused oncurrent expenditure. A “good”consolidation is one where taxes are lowerand the lower government expenditure ison infrastructures and other investments.”Mario Draghi. 24 February 2012.“The ideal fiscal consolidation ... must befocused on spending cuts and not taxhikes.It is essential that [this consolidationeffort] is perceived as credible, irreversibleand structural to have impact on sovereigndebt spreads.”Mario Draghi. 15 November 2012
  • 8. Long Term Refinancing Operations(LTRO)21 December 2011: €489.2 billion to523 banks – 3yrs @ 1 per cent29 February 2012: €529.5 billion to800 banks – 3yrs @ 1 per cent
  • 9. Long Term Refinancing Operations (LTRO)21 December 2011: €489.2 billion to 523banks – 3yrs @ 1 per cent29 February 2012: €529.5 billion to 800banks – 3yrs @ 1 per cent“Some banks, particularly in Spain and Italy, usedportions of those funds to buy higher-yielding bondsissued by their governments at a time when mostinvestors remained skittish, and it helped reducegovernment borrowing costs.But many banks primarily used the funds to pay downmaturing debts or simply deposited the money at otherbanks or with the ECB itself, even though they yield less.The infusion fell short of some politicians hope that itwould stimulate bank lending to customers in strugglingEuropean economies.”Wall Street Journal, 1 March 2012
  • 10. Financialization refers to the increasing importanceof financial markets, financial motives, financialinstitutions and financial elites in the operation ofthe economy and its governing institutions, both atthe national and international levels.Gerald Epstein, „Financialization, Rentier Interests, and Central Bank Policy‟,20021970s – The Monetarist revolution1980s – war on labour1990s – Credit as a substitute for wage increases2000s – Credit solution for wage stagnation failsPresent day – open conflict over monetary policy once again
  • 11. Some characteristics of Neo-liberalism - Attacks the post-war compromise between producer capitaland labour – compromise that put severe checks on freemovement of capital- Great Britain and Northern Ireland = Social DemocraticWelfare State- Irish Republic = Corporatist State / Rerum Novarum(Vocationalism)• Pushes a monetary policy designed to benefit financialrentiers• Privileges asset-price speculation over producer-ledemployment• Needs to kill inflation in order for asset price profit-seeking towork
  • 12. “In the case of the United States, financialization duringthe 1990s led to a closer alignment of large industrialand financial firms in the U.S., leading to a greateremphasis by Alan Greenspan and the U.S. FederalReserve in financial asset appreciation as a goal ofmonetary policy.”Gerald Epstein (2001)
  • 13. “In the case of the United States, financialization duringthe 1990s led to a closer alignment of large industrialand financial firms in the U.S., leading to a greateremphasis by Alan Greenspan and the U.S. FederalReserve in financial asset appreciation as a goal ofmonetary policy.”Gerald Epstein (2001)“The goal of monetary expansion has been to do justenough to stabilize financial asset prices without goingfar enough to produce catch-up growth in the labormarket”Matthew Yglesias, Rentiers and Financialization (2011)
  • 14. “What [the wealthy], businesses andbanks share is a common interest insupporting asset prices, a lack ofinterest in seeking full employmentunless it is a prerequisite forsupporting asset prices, and anaversion to any policies that cantrigger wage inflation.”Ashwin Parameswares (2011)
  • 15. PPP and NorthernIrelandMost public expenditure in NI fundedunder the assigned budget – adjusted toreflect changes in per capita expenditurein EnglandCapital spending funded through the useof NI resources or through directborrowing is tightly constrained. Thecapital used with count against NI’scapital budget.“In contrast, under current Treasury rulesas long as a PPP is off-balance sheet (i.e.the project is recorded as a contract forservices rather than a financial lease inthe public sector’s accounts), there willbe no direct impact on the NI capitalbudget, while annual charges countagainst the revenue budget as they areincurred.” (NIPSA, p.9)
  • 16. “Let the good timesroll for those who areon the ladder.”Alan Bridle, Bank of Ireland Head of Research NI.21 Sep 2006.