The financial crisis in Ireland is leading to a political crisis on the heels of a bailout and more “austerity measures.” The coalition that currently rules is falling apart, the Green Party detaching from the prime minister’s Fianna Fail party, and elections loom.
But just as in colonial days, the “Irish problem” is really a problem from outside. Ireland wouldn’t need “help” if it hadn’t been robbed by multinationals.
To be fair, its own government turned over its pockets to be picked. Ireland’s corporate tax rates are some of the lowest in the EU and its loopholes allow foreign companies to use Ireland’s well-educated and health-insured workforce, while giving the least possible back. Americans are linked to the problem — every time we GOOGLE we’re using a company that’s avoiding taxes at home in the U.S. and in other, higher-rate European countries by setting up in Ireland, and shuttling profits in and almost tax-free out.
The influx of temporary corporate cash creates a big bubble, but leaves no incentive for actual investment in Ireland. Sound familiar? New economy companies like “Do No Harm” Google are doing there just what manufacturers did here — suck up labor, hollow out infrastructure, then leave the place for the next desperate economy to chew up and spit out.
The Washington Post noted the young educated Irish are leaving the country in droves–emigration jumped 50 percent last year, and there are estimates that as many as half of all graduates will leave the country in the next five years. Some Irish homes have lost 70 percent of their value, unemployment is above 13 percent, and many families are underwater on their mortgages, just as in the U.S.
What can we learn from Ireland? Lower corporate taxes don’t lead to jobs and economic health, they lead to dangerous bubble economies that burst at the slightest threat, and even 100 billion euros isn’t enough to bring back stability. Austerity won’t help people who need jobs and homes. This is not the time to obsess over deficits, it’s time to pull countries back from the brink.
The F Word is a regular commentary by Laura Flanders, the host of GRITtv and editor of At The Tea Party, out now from OR Books. GRITtv broadcasts weekdays on DISH Network and DIRECTv, on cable, and online at GRITtv.org and TheNation.com. Follow GRITtv or GRITlaura on Twitter and be our friend on Facebook.
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