Presentation on who benefits from austerity, Mechanics Institute Limerick Summer School, 4 May 2013

1. Who Benefits from Austerity?
Mechanics Institute Limerick, Summer School, 4 May 2013
Dr. Conor McCabe, Equality Studies Centre,
UCD School of Social Justice

11. 11 May 2010
Dear Chief Secretary,
I'm afraid to tell you there's no money left.
Sincerely,
Liam Byrne.
chief secretary to the Treasury.

12. “The British Government has
run out of
money because all the money
was spent in
the good years.”
George Osborne, 25 February
2012

13. “So we cannot just carry on as we are. Unless we reform our
economy - rebalance demand, restructure banking, and restore the
sustainability of our public finances - we shall not only jeopardise
recovery, but also fail the next generation.”
Mervyn King,TUC Conference, 15 September 2010.

14. 5 March 2009. QE : £75
billion
10 October 2011. QE : £75
billion
2009 – 2011. corporate bond
purchase via asset purchase
facility : £375 billion
2012: Monetary Policy
Committee approve a further
£50 billion.
“So we cannot just carry on as we are. Unless we reform our
economy - rebalance demand, restructure banking, and restore the
sustainability of our public finances - we shall not only jeopardise
recovery, but also fail the next generation.”
Mervyn King,TUC Conference, 15 September 2010.

15. Long Term Refinancing Operations
(LTRO)
21 December 2011: €489.2 billion to
523 banks – 3yrs @ 1 per cent
29 February 2012: €529.5 billion to
800 banks – 3yrs @ 1 per cent

16. Long Term Refinancing Operations
(LTRO)
21 December 2011: €489.2 billion to
523 banks – 3yrs @ 1 per cent
29 February 2012: €529.5 billion to
800 banks – 3yrs @ 1 per cent
“Some banks, particularly in Spain and Italy, used
portions of those funds to buy higher-yielding
bonds issued by their governments at a time when
most investors remained skittish, and it helped
reduce government borrowing costs.
But many banks primarily used the funds to pay
down maturing debts or simply deposited the
money at other banks or with the ECB itself, even
though they yield less. The infusion fell short of
some politicians' hope that it would stimulate bank
lending to customers in struggling European

23. Financialization refers to the increasing importance
of financial markets, financial motives, financial
institutions and financial elites in the operation of
the economy and its governing institutions, both at
the national and international levels.
Gerald Epstein, „Financialization, Rentier Interests, and Central Bank Policy‟,2002
1970s – The Monetarist revolution
1980s – war on labour
1990s – Credit as a substitute for wage increases
2000s – Credit solution for wage stagnation fails
Present day – open conflict over monetary policy once again

24. Some characteristics of Neo-liberalism -
 Attacks the post-war compromise between producer capital
and labour – compromise that put severe checks on free
movement of capital
- Great Britain and Northern Ireland = Social Democratic
Welfare State
- Irish Republic = Corporatist State / Rerum Novarum
(Vocationalism)
• Pushes a monetary policy designed to benefit financial
rentiers
• Privileges asset-price speculation over producer-led
employment
• Needs to kill inflation in order for asset price profit-seeking to
work

28. “In the case of the United States, financialization during
the 1990s led to a closer alignment of large industrial
and financial firms in the U.S., leading to a greater
emphasis by Alan Greenspan and the U.S. Federal
Reserve in financial asset appreciation as a goal of
monetary policy.”
Gerald Epstein (2001)

29. “In the case of the United States, financialization during
the 1990s led to a closer alignment of large industrial
and financial firms in the U.S., leading to a greater
emphasis by Alan Greenspan and the U.S. Federal
Reserve in financial asset appreciation as a goal of
monetary policy.”
Gerald Epstein (2001)
“The goal of monetary expansion has been to do just
enough to stabilize financial asset prices without going
far enough to produce catch-up growth in the labor
market”
Matthew Yglesias, Rentiers and Financialization (2011)

30. “What [the wealthy], businesses and
banks share is a common interest in
supporting asset prices, a lack of
interest in seeking full employment
unless it is a prerequisite for
supporting asset prices, and an
aversion to any policies that can
trigger wage inflation.”
Ashwin Parameswares (2011)

44. Closing down of Dissent - Attacks on Equality in Ireland
Equality Bodies – closed down or with reduced Budgets
 Combat Poverty Agency –closed 2008 incorporated into the Department of Social Protection
 Equality Authority – 2009 43% cut and now being merged with the Human Rights Commission
 Women’s Health Council – closed 2009
 Crisis Pregnancy Agency – closed and merged with the Health Service Executive
 Irish Human Rights Commission -Budget cuts since 2009 and merged with Equality Authority
 Equality for Women Measure - co-funded by EU Operational Programme ---budget partly transferred out of
this area and now under Dept. For Enterprise, Trade and Employment
 National Consultative Committee on Racism and Interculturalism (NCCRI) _Closed 2009
 Gender Equality desk at the Department (Ministry) of Justice, Equality and Law Reform – Desk Closed 2009
 Gender Equality Unit – Department of Education – Closed early 2000s
 Higher Education Equality Unit – UCC -Closed and merged into Higher Education Authority (early 2000s)
 National Women’s Council of Ireland -158 member organisations- budget cuts of 15% in 2008-11 and 38% in
2012
 Traveller Education cutbacks 2011 and 2012 – all 42 Visiting teaches for Travellers removed*
 Rape Crisis Network Ireland – core Health Authority Funding removed 2011
 SAFE Ireland network of Women’s’ Refuges - core Health Authority Funding removed 2011
 People With Disabilities in Ireland's (PWDI) - funding removed 2012
 National Carers’ Strategy – abandoned 2009
Kathleen Lynch, Equality Studies UCD
School of Social Justice 44