Economy of equals

 
 

As the Occupy movements face a backlash from police, Hannah Dowling examines whether the economy has spread the damage equally.

From Wall Street to Dame Street, the rallying cry of the “ninety-nine per cent versus one per cent” has struck a chord around the world. The Occupy protests embody the frustrations of average citizens against the very worst aspects of capitalism in a way that mainstream politics has not. Across the western world, the average citizen is now being held to ransom to the actions of a minority, whose financial power has immensely damaged the political and social fabric of society. This recession is a rich man’s mess being paid for from the poor man’s pocket.

What happened in Ireland was self-inflicted. Our collapse may have been triggered by Lehman’s and US subprime lending, but had Ireland not been a house of cards we would have weathered the post 2008 financial storm. Ireland was weakened from within as greed infected the banking and business communities and a complacent government slept at the wheel. The politicians have had their comeuppance at the polls; many of the former business elite such as Sean Quinn are either filing for bankruptcy or are moving to the US. Prosecution of those who broke the law is proceeding at a glacial pace. Now the key contributors to our national downfall have been removed and it is left to the general public to tidy up the mess. On the theory that one should never let a good crisis go to waste, much good will have been achieved if we rebuild a fairer society that makes the recurrence of this crisis morally as well as legally unacceptable. In the meantime we have to live with the consequences on a day-to-day basis.

Unemployment and emigration are at levels not seen since the eighties. The banking system is catatonic; consumer morale is on the floor. As usual the burden falls on an average citizen squeezed by government for more taxes, by stubbornly high living costs and high mortgages taken out to buy overpriced property. Despite having benefited least from the boom, they will carry the majority of the subsequent cost, creating a new poor in the process. This is politically dangerous. The aspirations of the middle class form the bedrock of the western democratic model. When they lose hope the door is open for extremism. It is a truism that the rich get richer and the poor get poorer in a recession. What is different this time is the damage being done to the politically vital middle.

Look at America, where poverty is accelerating against a backdrop of increasing political extremism and dysfunction. Families who have worked their way up the ladder suddenly find themselves falling with only the most basic of safety nets. The response of the political system has been skewed to say the least. Despite nearly one in seven Americans now living below the poverty line, taxes have actually been cut with breaks directed towards the top one per cent of the population. The richest in America now own around eighty-five per cent of the nation’s wealth, a figure that hasn’t been as high since before the Great Depression. However it is rapidly becoming clear that a falling tide doesn’t sink all boats. America’s middle class is shrinking, unemployment is appallingly high and fifty million citizens cannot afford health insurance in a system where public health care would make Florence Nightingale reminisce fondly of the Crimean War.

America has never been a country of equality, merely a country of equality of opportunity. Inequality was rife and an accepted by-product of the American dream. This time, however, the gains of the wealthy are not seen as coming from honest endeavor, but from a corrupt and reckless financial system. Costly wars, expensive financial bail outs and a weakened tax system have combined to leave America bereft of the resources needed to address these issues, even if it had the will to do so.

While the average taxpayer is suffering, the cash rich continue to prosper. Sales of brands such as Louis Vuitton, Yves Saint Laurent and Porsche have increased. Luxury sales have shown an increase of eleven per cent in 2011 alone. In contrast, the middle and working classes struggle to make ends meet on reduced incomes. Graduates, for whom college was the route to advancement, now find themselves burdened with student loans and reduced job prospects.

The Occupy movement has gained traction in way that most forms of protests have not. It has struck a resonance with the core middle of the political system. It has given a voice to those behind the unemployment statistics, the struggling families and the disillusioned. One of its lasting legacies will be the fact that these protests have created national dialogue about the inequalities within our countries that so badly needed to be addressed.

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