An Open Letter
Mr. Brian Cowen T.D.
Taoiseach of the Republic of Ireland.
22nd. February 2010
This open letter is being written in a spirit of goodwill and should in no way be interpreted in a totally pejorative manner.
I realise that following in the footsteps of your father and entering the realm of public service involved dedication and sacrifice on your behalf. Accordingly, I do appreciative the time and energy you have devoted to your office. However, Taoiseach, given the situation that we, as a people, now find ourselves in, I am compelled to write openly to you.
1. Please do something substantial. Please show new leadership. The country is crying out for it. There is no sense of emergency emanating from you or from the Dail. You appear to have no sense of crisis, whereas there is a sense of crisis in the hearts and in the minds of the Irish people. Most people that I speak to realise that this is not a standard downturn for our economy. This time, with all due respect, it really is “different” and based on your performance heretofore, I do not believe you really “get it.”
2. Please bring a sense of morality back to Irish politics. In the Dail, failure and corruption have become acceptable. In other countries such failure leads directly to resignation. The fate of our children now demands such resignations from ministers who fail us and belittle the trust that has been placed in them by the Irish electorate. Mediocrity is no standard in today’s world.
3. The feeling among folk in Dublin and the counties, borders on anger and despair. The essence of this feeling is not being accurately recorded in the media and is not reflected in the actions issuing from your government.
4. The NAMA option will not bring credit back to Irish banks as it will be used to pay off bondholders, subtly. Since NAMA was introduced into legislation the truth about property valuations around Ireland has been finally revealed and it is now perfectly obvious that we, as a people, have overpaid for these distressed assets. Accordingly, the level of interest, maintenance and administration costs NAMA will have to pay will probably mean this misconceived institution will go into default. Taoiseach, this calls into question the independence and veracity of the advice you have received. You need new independent councillors around you, who are not beholden to the Central Bank and its international financiers.
5. Unless credit starts flowing again unemployment and its constituent costs economic: psychological and social, will shackle Irish men and Irish women for decades.
What is required is a State Commercial Bank to be made available to back private business development, whose main purpose would be the successful employment of Irish residents. The essence of State power is its ability to create true wealth- generating credit. This credit should be used to support full employment, not generate asset bubbles for the benefit of a golden few.
In humility, examples of the areas of the economy that could be focused on are set out below. There are many others, but one must start somewhere:
A. Intensive Market Agriculture:
As in most European urban centers, every farm surrounding the major cities in Ireland should be motivated and supported to efficiently supply those cities with meats, poultry, vegetables, grains and dairy products. Currently, much farm land is idle and inefficient due to common agricultural policies that are now redundant.
B. Natural Resource Development:
To enable our natural resources to be developed for the benefit of our people the contentious contracts, signed by Ray Burke et al, should be renegotiated.
C. Fish Processing:
To enable fishing to be developed for the benefit of our people, the disastrous treaty allowing for the usurpation of our waters by Brussels must be renegotiated.
D. Countrywide Fibre Optic Broadband Rollout:
We live in a web-based world. The web is “modern electricity.” Fibre optic connections must be brought to every home. This will grant all home dwellers the potential to go into business for themselves. It will also open up to them a new world of information and opportunity. It will give them freedom, whereas current government policy has imprisoned them within a “third-world” technological
E. Web Based Educational Institutions:
We have a reputation for excellence in education. Through fiber optic-broadband connectivity and vision we can provide this education to the world. Our academic institutions should be on the cutting edge of scientific and engineering development.
Promoting a synergy between government, academia and business is one strategy to ensure that Irish citizens gain potential access to high value industry.
F. Next Generation Pharma Drug Development:
Our current exports are powered by chemical-pharmacology. Within the next 5-7 years most of the patents protecting this industry will expire. When they go “generic” this industry will commence relocating to low cost centers across the world. We need to plan for this eventuality and adopt measures to support and attract next generation providers.
G. Hi-Tech International Health Care:
Irish nurses and doctors are renowned the world over. We can tap this human resource to become one of the world’s best “transnational” health care locations of choice. Ireland, being a low cost airline center, enjoys a magnificent strategic advantage in this area.
H. Liberated Tourism:
To enable tourism to be sustained and developed, a more enlightened policy concerning hotels, restaurants and bars must be promoted. This policy should be based on proportionality, not altruistic idealism. High landing charges that are currently crippling the industry must be revoked.
6. To enable these initiatives to be taken, Taoiseach, you must have the courage to start from a new page. The profligate waste of money over the past decade has been a national disaster and entities such as FAS, the HSE, shadow regional health boards, local and city councils, and other superfluous and mal-functioning entities must be reorganised or abolished. Government must become fit for international executive purpose. I would suggest that if you cannot make the necessary changes through your own party, you must, in the spirit of national survival, propose a structure of national government. The times demand no less, Mr. Cowen, and the country will respect you if you show courageous leadership.
7. The current situation within the country of high T.D. payments, ministerial payments, unmarried mother payments, residential subsidy payments, immigration payments, top civil service payments, garda payments, social welfare payments, health care worker payments, drug cost payments, doctor and consultant payments, associate contractor payments, RTE “prima donna” payments and commercial lease payments (to mention but a few) bear no comparison to actual Irish business reality. Entrepreneurs, small businesses, service professionals, farmers, retail outlet managers, salesmen, plumbers, technicians, architects, builders, tilers, carpenters, mortgage providers, drivers and craftsmen et al are all suffering. Business has collapsed and costs have soared. The payments being paid out of the exchequer with no supporting “income” is bankrupting this country and is placing a legacy of crushing debt on our shoulders and on the shoulders of our children. Little is being done to correct this imbalance. Time is of the essence.
8. This republic was created on a concept of freedom, following over four hundred years of oppression. It is morally wrong to forget history, Mr. Cowen. The land act and the land commission gave Irish property back to Irish people, “free and clear.” Due to corruption and incompetence in your government, it is wrong for you to now ask the Irish people to lose this hard-won freedom by accepting property tax. Property tax is a lien. It means you do not own the asset, but are in effect a mere leaseholder. Please cut expenditures and leave this Irish right sacrosanct.
9. It is also morally wrong for you as a government to attack the minimum wage, when many government officials and affiliated government contractors make in excess of 100,000 Euro per annum. This government policy will destroy the centre of the Republic. This center is made up of average working folk who have to get up at 7 A.M., commute, pay for parking, pay for lunches, re-commute and arrive back at home at 8 P.M., exhausted. These working folk are grateful for their jobs, but they are scared. They are scared for themselves and they are scared for their children. They are tired Mr. Cowan, tired of rhetoric without moral action. Tired of no honour among the political elite. Tired of shameful egocentric mendacity. Yet, it is the actions of these folk and it is their efforts that give the Irish currency value and substance. It is real work that grants money value. This is economics 101. Your government needs to realise this truth, fast. Through its subsidies to non-work and unproductive administration, this government is quickly making it farcical and almost uneconomical to consider work a reasonable option. Thus the corroding issue is not the minimum wage, but excessive public expenditure. Start at the top, Mr. Cowen.
10. Taoiseach, a country is not just an economy, it is a community. Increasingly, the Nation is being polarised into those who work for, and are associated with, the government and those who are not. This is not a healthy place to lead our country. Moral justice matters, not just for those politically affiliated, but for all.
11. One initiative that would greatly assist commerce is the abolition of “upward-only” rent reviews. Some moves have been made in this area but they must be applied retrospectively, otherwise they are meaningless. This simple action would be a great support to the retail trade, which employs ten of thousands of citizens. It makes perfect sense to allow for this adjustment, given the collapse in trade and commercial real estate valuations. Property owners must realise it is better to have some rent, than no rent at all. Tax initiatives could be introduced to soften the blow to affected parties.
12. The effective collapse of FAS due to corruption and profligate spending, has left our apprentices, our youth, our unemployed and our “return-to-work” elderly stranded. As a matter of urgency, a new structure must be devised to assist them in their apprenticeships and up-skilling. Many retired tradesmen and teachers would gladly assist in this regard, in this time of crisis. All that is required is leadership and management. FAS should be wound up and the money saved reallocated towards this initiative.
13. In the interest of equality, all public representatives should use the health services available to the general populace.
14. Formerly self-employed entrepreneurs who now find themselves out of work should have access to full unemployment benefits, provided, of course, that they are fully tax compliant.
15. Mr. Cowen, on many occasions I have heard you state that the country just needs to get through this “bad patch” and everything will be “back on track.” This is erroneous thinking. Those boom times will never come back. We must reinvest in and reinvent ourselves. Why do I say the tiger years will never return? I say it because they were based on a series of events that were highly unusual, never to be repeated. On the back of these events public payments exploded and now they must be brought back to reflect a new world zeitgeist. Not to accept this reality will only prolong profligate spending. Through your words and deeds you actively promote this delusion.
What were the circumstances that fuelled our boom:
- A. Ireland’s entry into the Euro allowed Irish banks access to unparalleled pools of cheap credit.
- B. Ireland had a low cost base then.
- C. Ireland had an unusually well educated workforce.
- D. The integration of Europe brought many foreign companies to Ireland.
- E. A most favourable corporate tax structure for international transfer pricing
- F. Wage rates rose at unprecedented levels due to job growth and a new liberal taxation policy.
- G. The “originate to distribute” banking model increased banking liquidity to unprecedented levels.
- H. “Social Partnership” brought industrial peace after many decades of instability.
- I. The Northern Ireland “troubles” were finally resolved and the country had true peace which had eluded it for over four decades. These troubles had artificially repressed the country financially. The arrival of peace engendered a new positive attitude and an economic explosion.
Unfortunately, this boom is now gone Taoiseach. Its main constituent factors, outlined above, were a “once-off” and have now been discounted in economic terms. What we now face is a highly competitive, low cost, low credit, web-interconnected, transnational and level-taxation-based business environment. We must grow up and move on. It is time for fresh ideas and insightful action. It is time for leadership, courage and vision. It is time for affective sound bites to be replaced by effective strategic and tactical practicality.
Are you up to the challenge, Taoiseach? If not, in all honesty, you should call an immediate general election and allow a new team to take charge and start making the tough decisions required. If you fail to do so, and insist that this current government run its natural course, it will be 100 billion Euros too late and the “patient,” our State, may then be too anaemic through bankruptcy, unemployment, emigration and structural collapse to be resuscitated.
Please realise, Taoiseach, this time it is very very different!
Christopher M. Quigley,
B.Sc., M.M.I.I., M.A.
Bray, Co. Wicklow.