Belfast Trades Council, 1 May 2013.

1. Belfast Trades Council
Mayday Lecture
Dr. Conor McCabe
Equality Studies Centre
UCD School of Social Justice
2 May 2013

4. 1. Monetary policy
2. Financialisation
3. Finance, Insurance, Real Estate [FIRE]
4. Privatisation
5. TINA

5. 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.

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

7. “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.

8. 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.

9. “In the European context tax rates are high
and government expenditure is focused on
current expenditure. A “good”
consolidation is one where taxes are lower
and the lower government expenditure is
on infrastructures and other investments.”
Mario Draghi. 24 February 2012.
“The ideal fiscal consolidation ... must be
focused on spending cuts and not tax
hikes.
It is essential that [this consolidation
effort] is perceived as credible, irreversible
and structural to have impact on sovereign
debt spreads.”
Mario Draghi. 15 November 2012

10. 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

11. 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 economies.”
Wall Street Journal, 1 March 2012

16. 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

17. 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

21. “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)

22. “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)

23. “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)

25. PPP and Northern
Ireland
Most public expenditure in NI funded
under the assigned budget – adjusted to
reflect changes in per capita expenditure
in England
Capital spending funded through the use
of NI resources or through direct
borrowing is tightly constrained. The
capital used with count against NI’s
capital budget.
“In contrast, under current Treasury rules
as long as a PPP is off-balance sheet (i.e.
the project is recorded as a contract for
services rather than a financial lease in
the public sector’s accounts), there will
be no direct impact on the NI capital
budget, while annual charges count
against the revenue budget as they are
incurred.” (NIPSA, p.9)

31. “Let the good times
roll for those who are
on the ladder.”
Alan Bridle, Bank of Ireland Head of Research NI.
21 Sep 2006.