Due to the current great difficulties that our nation faces I have been trying to think of what I would do if I occupied the Taoiseach's seat. I am so sick of hearing doom & gloom laden market commentary and really wish we could come up with a way forward.
I have a masters Economics degree from a leading university and to be honest, all it taught me is methods of thought, analysis and the ability to see the flaws in others arguments. It did not teach and can not teach a way out of this. Modern economics is by no means a science and only seems to be when hidden behind mathematics / statistics heavy econometrics. I always remember that Keyne's "General theory" contained few equations.
Anyhoo, here is my manifesto for government. It is not fully thought through but I would appreciate peoples opinions on individual points.
1. We declare the Republic to be over and in the French style declare a second Republic. This will create a necessary break with the past and demonstrate to our citizens that we mean business.
2. The Republic will be based on enlightenment ideals i.e. Liberté, egalité, fraternité whilst bearing in mind the individual charecteristics of the Irish nation. There is no point in a nation state if we do not appreciate the extended family nature of the nation.
3.Formation of a national government. We end parliamentary democracy for a 5 year period. The present two chamber British debating system is a wasteful relic in our present circumstances. The national government will be small and limited to a ministerial executive i.e. c.20-25 individuals. Current TD and Senator salaries will be diverted to appoint an international panel of experts to advise our ministers and Council President. The national executive government will gain democratic legitamacy through a Yes/No referendum each year for five years. To ensure the handover to normal democracy after 5 years we have some form of agreement with the UN/EU/USA to ensure it i.e. through a charge on the properties etc of the executive ministers.
4. The army and civil defense will be put on alert to protect against civil disobedience and to ensure the delivery of basis services.
5. Current trade unions will be subsumed for a 5 year period into one national independent trade union- formed from an amalgamation of FÁS,current trade unions and profesional bodies. This is intended to avoid the trade union insider/outsider problem and still maintain the traditional role of unions i.e. protect worker rights from exploitative employers. However, all workers in society as well as the unemployed will be regarded equally and hence wage negotiation and strike pressures will be concluded for the common good.
6. The constitution will be re-written to form a Republican mindset i.e. all citizens are equal whether rich or poor. All are equal under the law. The law will evolve into a hybrid of the British and Napoleonic systems i.e. the current debating system alligned to a new search for the truth of events.
7. To appease the population and to achieve social justice we set up a CAB like organisation to prosecute any corrupt politicians i.e. those who took bribes in the past, accepted brown envelopes, nodded on planning applications etc. Weaker methods of evidence will be required a la CAB i.e. we will ensure prosecutions when reasonable evidence is available. Obviously this will be finessed to ensure protection for the innocent but the point is to ensure the guilty are punished.
8. To ensure effective deflation of the economy and assuming that the private sector will adjust in line (i.e. those firms that have not already gone to the wall will take this opportunity to cut costs), the government declares a 30% € cut in all civil service/government/ wages, costs, rents, licences,etc. This will take the place of currency devaluation which due to the precarious state of the national economy,leaving the euro is not an option. The private sector is encouraged and in certain circumstances forced to follow suit
This is designed to avoid a deep and prolonged recession. As far as I can see the nation's price level is hugely overstated and a national government is the only method of reducing it to a sustainable, competitive level
9. Appointment of a competition,cartel czar with wide reaching powers. The high costs of operating are due to colluding distributors,suppliers and wholesalers. The czar will enforce that prices are in line with UK prices if not EU averages (we can not achieve everything)
10. The national minimum wage is reduced to €4.00. Reflecting the 30% drop in prices and the fact that we will have 20% unemployed. Any minimum wage at all is designed to protect against unscrupulous employers and placate unions.
11. We put a five year restriction on any further immigration- EU or otherwise.
I believe that the immigration of cheap labour fuelled our boom beyond sustainable levels- benefitting the employers and depressing wages,putting pressure on housing etc for the illeducated and unskilled members of our working class (under the second Republic full citizenship will be extended to all individuals).
12. The executive president will not visit foreign nations on St.Patrick's Day. They will stay at home and maybe even make a speach. Fawning over other world leaders demeans our nation. If Obama visits Dublin on July 4th we will reconsider. This would be an opportune date for a state of the nation style address.
13. Most important point. Banking crisis. We can not default on international obligations. Thus I propose the following programme.
a. Nationalise all Irish banks though acquisition at current market prices through new sovereign wealth funds. No premium is paid and perhaps no consideration at all changes hands.
b. Property developers and others holding loans are bankrupted. The assets under the loans become government property. Any remaining wealth held by defaulters is used to pay back banks.
The government will ascribe a portion of the landbanks to every citizen who will be required to pay a fee each year for 100 years to acquire the property. This property and debt could be tradeable if makets recover.
The banks will write down a large proportion of the loans (at a level sufficient to maintain net 10 year profitability of zero i.e. the government will not mind a zero eps) and will receive an upfront payment from the government (based on a sale of the future proceeds of citizens taxes in this regard (perhaps through a securitisation sale)).
This will avoid an initial fire sale of distressed assets causing a complete collapse of property values.
14. All multi-nationals will receive a rent and costs reduction (subsidised if markets are slow to react) in line with the 30% cost cut described above.
15. End all tax deductions for interest payments
16. End all tax deductions favouring property ownership.
17. Social security cut to sustainable levels i.e. €60 per week.
18. Foreign aid ended (most of this is currently to subsidise food exports so this will need to be considered)
19. Employ laid off builders to bulldoze zombie estates, and build high density living areas in city centres. This will cut commutes,make public transport more cost effective and help build dynamic city centres. When develpments are planned they will need to include public transport.
20. Employ taxation experts to develop taxation in line with Pigouvian principles i.e. tax to reduce externalities.
21. Employ regional officials to oversea planning and zoning procedures i.e. take this out of the hands of politicians. Form a state agency with full ovesight to examine proposals.