Back in 2010, Brad Reed wrote about the Irish bank bailout for C&L.

In exchange for a loan of up to €90 billion from the European Union and the International Monetary Fund, Ireland will have to implement further austerity measures that involve raising taxes and cutting services. And whose services are getting cut, you're wondering?

Yeah, I'll bet I don't have to answer that one, do I?

Now interesting information has come to light about who benefited from the bailout of those Irish banks. Since we've established it wasn't the people of Ireland, who could it be? That's right, it's Bill Gates and the Gates Foundation! Corporate education reform and all sorts of "benevolent goodies," brought to you by the guy who didn't take nearly the same hit that everyone else did during that recession.

Independent.ie:

The world's second-richest man, Microsoft founder Bill Gates, was a major Irish bank bondholder ahead of the financial collapse that saw the taxpayer put on the hook for the €64bn bank bailout.

Gates was a bondholder in Anglo Irish Bank, Irish Nationwide Building Society, Bank of Ireland and Allied Irish Bank, according to filings seen by the Sunday Independent. The filings detail investments held by Gates' Bill and Melinda Gates Foundation.

The identities of wealthy bondholders in the Irish banks, bailed out in most cases by Irish citizens, have never been revealed fully. Billionaire Chelsea owner Roman Abramovich emerged as a bondholder in Irish Nationwide after his investment vehicle Millhouse was involved in a UK lawsuit in which it tried to extract full payment for its bonds in the building society as part of a tender offer. Abramovich and his partners lost, but many other bondholders were repaid in full despite backing bust banks. German and French banks were the largest holders of Irish bank bonds.

Pressure from the ECB and US Treasury Secretary Tim Geithner on Ireland not to burn senior bondholders saw those French and German banks repaid when the Irish banks hit the skids. Some junior bondholders were burnt.

Wasn't that nice of Tim Geithner to make sure our billionaires didn't suffer?

The cost to Ireland for that gesture is at least two more years of austerity measures before they're eased in 2016. These measures, forced on them by the European Union and IMF, actually do harm to Ireland's prospects for economic growth, but when has that stopped the billionaires and oligarchs? After all, 14.3 percent unemployment could be worse, right? Poor and young people have suffered the most, as with all countries where billionaires are served ahead of ordinary folks, and immigration from Ireland to other countries with health care and better social programs has nearly doubled. (Report -- PDF)

But hey, there's a silver lining for Ireland. Microsoft Ireland's earnings are on the rise! Isn't that great? Maybe not. We are seeing an unprecedented rise in corporate profits at the same time that the middle class is disappearing. That's not coincidence.

The math goes like this: Bank bailouts = billionaires made whole at the expense of working people. Corporate profit increases = billionaires made richer at the expense of working people.

The next time you hear something about the Gates Foundation's benevolence, remember that math.

Today's Wikileaks release includes a cable from 2004 extolling the virtues of Ireland's economic boom. In hindsight, we see what a failure Ireland's decision to give large corporations special tax breaks was.

In 2004, US Treasury Secretary John Snow visited Ireland for the purpose of studying Ireland's "secrets of success." At the time, Ireland's economy was soaring largely because their corporate tax rate of 12.5% is the lowest of any industrialized nation.

The resulting boom brought jobs and prosperity, which in turn spurred building, which spawned mortgages, which rocked the banks when the entire world went into a global recession. The Celtic Tiger was reduced to a meow instead of a roar, bent to the mercy of the EU with a shotgun wedding to austerity.

But in 2004, things were rosy and bright. It's worth looking at this analysis in retrospect, since the right-wing would like to use the same strategy now.

Step One: Strike when labor is at its greatest disadvantage

Fianna Fail,'s “great advantage” at the time, said O'hUiginn, was Ireland,s economic crisis; with 18 percent unemployment and government debt at 130 percent of GDP, the political opposition, industry, and labor could not afford politically to impede solutions. The PNR,s linchpin was labor's decision to accept a moderate wage increases in exchange for income tax relief, which became the basic approach to successive national wage-setting (Social Partnership) agreements.

Step Two: Get organized labor's buy-in by calling it a Social Partnership

According to Cassells, a shared understanding between unions and the Government on the importance of decent wages and housing for workers was the basis of labor,s commitment to the Social Partnership approach. He added that the transparency and inclusiveness of wage-setting negotiations, in which even the most disgruntled union representatives were given voice, were also instrumental to success.

This section goes on to note that the wealth of young, educated Irish workers was instrumental as well. Evidently the Irish haven't gone as far as the right-wing in this country when it comes to education. This part is good, but as you'll see, it's not all that important to the real meat of the deal.

Step Three: "Dictatorial Leadership"

This involved incenitivizing industries to achieve efficiencies by exposing them to the full discipline of the market, even at the risk of bankruptcies. The challenge in this approach, explained McCreevy, was to press ahead with reforms in the face of elections, which provided temptations for politicians to adopt softer, more populist economic platforms. Secretary Snow observed that whereas the gains from economic reforms in any country tended to be diffuse, the losses were often concentrated in particular sectors or geographic areas, making it easier for those affected to organize political opposition. McCreevy commented that the test of any government was how well it explained to dislocated workers that the reforms responsible for their plight were good for the country.

So we have the unrelenting "market" discipline at work, and when it worked its magic and bankruptcies resulted (it's unclear whether the bankruptcies were personal or corporate, by the way), workers got a government line that their plight was 'patriotic'.

Steps Four and Five: EU Support and US Offshore Tax Breaks

Step Four is self-explanatory. Step five should tell us all why it is we can't have nice things.

The U.S. policy of tax deferral for foreign subsidiaries of American firms, combined with Ireland,s 12.5 percent corporate tax rate, underpinned the large influx of U.S. investment to Ireland during the Celtic Tiger period, observed Padraic White, former CEO of Ireland,s Industrial Development Authority (IDA). White recounted his numerous trips to the U.S. House of Representatives, Ways and Means Committee to defend tax deferral, and he argued that Senator Kerry,s plan to reverse tax deferral would have “killed Ireland,” had he been elected. White believed that complaints by the U.S. public about the job outsourcing that accompanied U.S. investment flows were wrong-headed.

While our economy stalled, we built Ireland's. But as Ireland discovered, markets are a cruel mistress. They are indeed dictatorial, and what markets give, they can also take away. It's interesting to me that the Irish government chose to guarantee every penny of the big banks' exposure, rather than letting the markets shake it out.

The tone of this particular cable is almost celebratory and certainly full of puffed-up pride over the 'success' of the Celtic Tiger.

Meow.

Despite bitterly cold weather, an estimated 50,000 Irish citizens yesterday rallied at Dublin's General Post Office, center of the 1916 Easter uprising, to protest the proposed International Monetary Fund's proposed bailout of banking losses. Many of those losses were incurred by reckless and possibly criminal behavior by bank managers, and naturally, the politicians think the citizens should pay for it, not the bankers:

The Irish Congress of Trade Unions (Ictu) has said that the country cannot afford to pay the terms of the proposed €85 billion EU/IMF bailout package.

Addressing the large-scale rally against the Government’s planed austerity measures in Dublin today, the general secretary of Congress David Begg said that Dáil must not accede to the terms on offer under the proposed agreement – with which he drew parallels to the Treaty of Versailles after World War I.

“Does anybody in this country or in Dáil Éireann think that we can as a people afford to pay 6.7 per cent on money that we did not ask for in the first place and that is being forced upon us to bail out the banking system in Europe which is in hock to this country for €509 billion”.

“We can’t pay that money and we won’t pay that money”.

Speaking in front of the GPO in O’Connell Street, Mr Begg said that the 1916 proclamation, which was read initially from the same spot, had spoken of help “from our gallant allies in Europe”.

“Well our gallant allies in Europe have arrived 95 years too late and uninvited and instead of guns to help the revolution they have brought economic weapons of mass destruction”

Mr Begg said that gardaí had officially estimated the attendance at today’s march and rally at more than 100,000. However the Garda Press Office put the figure at up to 50,000.

Irish Times columnist Fintan O’Toole, who was the master of ceremonies at the rally, led the crowd in a minute’s chant of “Out” to the Government.

He said that the Government’s economic recovery plan was not about saving Ireland but rather represented “a plan to save the Irish elite”.

Mr O’Toole said that a Government with no mandate would do a deal with people nobody had ever elected

“We know what this deal is. On the one side we will borrow yet more billions to bail out the bankers and the other side of this deal is that this society is supposed to declare war on the poor and vulnerable”.

He said that it would involve a savage assault on the minimum wage, cuts in welfare which would further impoverish those who were already struggling to survive as well as attacks on basic services.

Mr O’Toole said that while this was happening “the elite which caused this catastrophe will protect its own interest”.

“We will still have people driving around in black cars on over €200,000 per year claiming to be the representatives of this democracy”.

“Under the Government’s four-year plan a single person earning €40,000 per year will pay exactly the same amount of extra tax as someone earning €300,000 per year”.

He said that working people in Ireland did not mind making sacrifices. He said that they made sacrifices every day for their children, for their families and for their communities. However he said that they did not want to be the sacrifice

“We are here today to say that we are not economic units whose only function is to behave ourselves and to pay off the gambling debts of our masters, we are not children who must take our medicine or be sent to bed without our supper, we are not subjects, we are citizens and we want our republic back”.

It's very depressing to see what passes for sane economic policy in Ireland. In negotiating with the same financial terrorists who got them into this mess, Ireland is only asking for more of the same. I'm still baffled, and not just about Ireland: Just how did these financial "experts" manage to make the rest of us responsible for the reckless judgment (and likely fraud like that of the Anglo-Irish Bank) of those involved with these high-flying banks? Paul Krugman points out just how crazy it all is:

Before the bank bust, Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation’s creditworthiness was put in doubt. So Ireland tried to reassure the markets with a harsh program of spending cuts.

Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts.

Or to be more accurate, they’re bearing a burden much larger than the debt — because those spending cuts have caused a severe recession so that in addition to taking on the banks’ debts, the Irish are suffering from plunging incomes and high unemployment.

But there is no alternative, say the serious people: all of this is necessary to restore confidence.

[...] In early 2009, a joke was making the rounds: “What’s the difference between Iceland and Ireland? Answer: One letter and about six months.” This was supposed to be gallows humor. No matter how bad the Irish situation, it couldn’t be compared with the utter disaster that was Iceland.

But at this point Iceland seems, if anything, to be doing better than its near-namesake. Its economic slump was no deeper than Ireland’s, its job losses were less severe and it seems better positioned for recovery. In fact, investors now appear to consider Iceland’s debt safer than Ireland’s. How is that possible?

Continue reading »

An animation of an audio recording of James Joyce reading from Ulysses, courtesy of Poetry Animations.

Happy Bloomsday!

Arguably one of the greatest achievements in literature in modern history, Ulysses follows protagonist Leopold Bloom over the course of a single day. June 16, 1904, to be exact.

So every June 16th, from Dublin, Ireland to Spokane, Washington, Joyce lovers gather to celebrate the words of James Joyce. Here in San Francisco, I have some friends who organize a pub crawl, complete with readings from Ulysses.

Can you name another book deserves this kind of commemoration?

Open thread below...

Hey conservatives, heads up on this. It's a very big deal. Ireland, long-time darling of conservative anti-taxers, is in some deep fiscal trouble. Not because they've overspent, but because they've undertaxed.

Via NPR:

Wage taxes, too, have long been much lower than in other European countries, says Fintan O'Toole, a columnist for The Irish Times and the author of Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger.

"If you were working in Ireland, well, very large numbers of people were kept out of the tax net altogether," O'Toole says. Many middle-class people paid no taxes either, he says.

But the economic collapse of the past few years — unemployment has gone from 4.5 percent to more than 13 percent — has exposed the downside of Ireland's low-tax policies, and forced it to backtrack somewhat, he says.

Gosh. Grover Norquist's wet dream, right there in Ireland. Only...it's not all good in the land.

Unfortunately, it was necessary for Ireland to raise taxes, which they did, along with draconian cuts to other government programs. What they haven't done is raise taxes on corporations. Barry O'Leary, head of the Investment Development Agency of Ireland, explains:

"We're pretty clear on the benefits it brings for Ireland," he says. "And we don't want to damage those benefits at all by increasing the tax rate. So it is not on the horizon at all."

The consequence is twofold: People don't have the money to spend on discretionary items, and they can't afford the houses corporate money built, so they remain empty.

"When people used to come to Ireland from abroad in the 1960s and 1970s, one of the sad things you'd see on the landscape was all these empty houses, and they were the sort of physical manifestation of famine in the 19th century, of mass emigration, of the kind of depopulation of whole parts of the countryside," O'Toole says.

"So it's pretty sad to create that out of disasters like famine and emigration," he continues. "It's really insane to create it out of a boom. So out of prosperity we managed to create all these empty houses, which have the same ghostly presence on the landscape as the houses from the 19th century had.

Empty houses while people bear the burden of economic downturns and corporations continue to bear less of a burden than they? This is what the Republicans, teabagger and moderate alike, live for. It's what gets Grover Norquist out of bed in the morning, this notion of letting enterprise run roughshod over worker, retiree, and entrepreneur.

Ireland has some lessons for us to learn, and hopefully the Irish government will learn a few as well.

Original Bush caricature by Allan Cavanaugh. Open Thread below...

Jane passed the ball to me. Roy, to Kevin Drum, to Digby, to Peter Daou, , Barbara O'Brien, Yellow Dog

Four jobs you’ve had in your life: bank teller, computer parts sales, musician, music teacher.

Four movies you could watch over and over: The Godfather, Casablanca, Chinatown, Psycho

Four places you’ve lived: Brooklyn & Queens, NY, San Jose & Los Angeles, CA,

Four TV shows you love to watch: Buffy the Vampire Slayer, Homicide, "Life on the Streets," Lost, The Daily Show.

Four places you’ve been on vacation: The Bahamas, Paris, Italy, Germany.

Four websites you visit daily (I'll name a few different ones): Jesus General, Talk Left, FireDogLake, WaPo

Four of your favorite foods: penne pasta with red sauce, popcorn, Ice blended Mochas (that's a food group as far as I'm concerned), anything on a barbeque grill.

Four places you’d rather be: New York, Fitzgerald's office, Hawaii, Lake Tahoe.

I'm passing to JC of Jesus General. Blogger's- I'll add more as I see them.

Update: David E's Fablog's Four-SteveAudio has his Four-Talk Left has her Four.

Mike from the Blog Round Up joins the Four :

Four jobs you’ve had in your life: newspaper boy, caddy, locker room attendant, musician

Four movies you could watch over and over: Lawrence of Arabia, Double Indemnity, On the Waterfront, Citizen Kane

Four places you’ve lived: Troy,Ohio; Wichita,Kansas; San Francisco, Los Angeles

Four TV shows you love to watch: Monk, The Sopranos, Curb Your Enthusiasm, NHL Hockey

Four places you’ve been on vacation: Caribbean cruise, Hawaii, Cape Cod, Ireland

Four websites you visit daily: Think Progress, The Poor Man, War and Piece, Bushwatch

Four of your favorite foods: Barbecued Ribs, Pork roast, Pasta, Ice Cream

Four places you’d rather be: Rome, Paris, Quebec City, Greek Islands

The great frenchman-JC has his list of FOUR----Matt Stoller---SeeingtheForrest--Effect Measure--

Gun dealers have to be protected because you know, why should they be held responsible for selling weapons negligently. Doug Ireland tells us what's what.

Atrios maps out what we have been fighting and dying for in Iraq.

While Doug Ireland writes: "If the Bush administration brokered a deal in Occupied Iraq to enshrine Islamic law as the guiding principle of the new Iraqi Constitution, you'd think it would be headline news in the U.S. media, wouldn't you?"...read on