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16 October 2008 Edition

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Capitalism in crisis

THE global economic crisis has created a whirlwind of reaction and recrimination.  Much of this anger has been directed against the major financial institutions and Governments and the political parties.  
The mainstream discussion, especially in the media, concerns the failing responses of the US administration and the EU to the emerging tsunami of economic meltdown and business collapse. Many pundits are worried that the capitalist system is about to breakdown as state socialism had previously crumbled in Eastern Europe.
In the USA, legislators have agonised about a bailout for the banks amidst accusations that buying out the bad debt of the major financial institutions was a form of socialism!  Similar initiatives in the EU were criticised as being little more than a very costly intervention at taxpayer’s expense for the incompetence and blind greed of the senior executives of international banking and financial services.
No one can predict the longer-term outcome, although the immediate reality for many, especially ordinary working people, will be deepening economic hardship.  Sinn Féin in this week’s Budget debate has correctly and coherently pointed to the absolute minimum condition that taxpayers investment in the financial services sector is about much more than preserving the old order of greed and indifference. It is about protecting the public interest and ensuring that a radical and more rigorous regulatory regime is established to avoid the mistakes which have created the current economic crisis.
Sinn Féin has highlighted that there are some important issues that need to be resolved when it comes to the billions of tax payer pounds being poured into the banking system. The partial nationalisation of some of the major banks and the re-capitalisation of others must lead to outcomes that are in the interest of the taxpayer. This means a ban on the extravagant bonuses that senior bankers were awarded (or rewarded themselves) in the past and must also mean that any future profits are directed by Government to benefit those most in need in our society.
The abject failure of self-regulating markets to work in the public interest is clear for all to see. The financial system needs not just effective regulation it also needs to be properly policed to ensure that the corruption and greed, which has created and fuelled the current financial crisis can not happen again.
Sinn Féin has long held the view that if the economy is to prosper, it can only do so in an all Ireland context. It may be that the climate of panic in the money markets and uncertainty about the future performance of the Irish economy would be regarded as time for a tactical retreat from the argument for a United Ireland. But nothing could be further from the truth.
As the western economies lurch from recession into depression the most effective response in Ireland to the many economic challenges would be to deal with them on an all island basis.  What better way to re-build the economy and to make best use of finite resources than to engage in island-wide economic strategies? 

An Phoblacht
44 Parnell Sq.
Dublin 1

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