June 24, 2006

Small but meaningful PDs will have to fight for survival

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Robinson was on his best behaviour, talking about ��neighbourly�� cooperation and the like, sounding for all the world more like a visionary entrepreneur than the next head of the socialist DUP.

Martin revealed himself to have read widely – quoting from the hot economics book of the moment, The World is Flat by Tom Friedman. Both sounded like budding chief executives, employing the language of corporate America – the talk was of less government, lower taxes, less regulations and the market.

It was the language of the Progressive Democrats. Yet even Peter Robinson acknowledged that his beloved North was little more than a socialist state dependent on central transfers from London with little or no indigenous get up and go.

As for Martin, well let�s just say he traditionally would be regarded as on the left wing of Fianna Fail. But here were both men sounding like a cross between Karl Rove and David Cameron.

Maybe this is why the Progressive Democrats languish with such small numbers in the Dail, despite poll after poll suggesting that their policies are close to what the people want. Why are the PDs not a bigger party? Is it because, like Martin and Robinson, everyone robs their clothes? Or does this matter to the PDs?

They might argue that they have been in power for 12 of the past 16 years, so they are mature, responsible politicians who have had to wield power rather than hurl from the ditch. They are small but meaningful, and that might be enough for them. Better to be small with power, than large without.

However, the spat between Mary Harney and her deputy Michael McDowell this week was unseemly. For those of us who don�t pay much attention to the Dail on a weekly or even monthly basis, it seemed to come out of the blue. Why would there be such a bust up? Who gains? Who is damaged? And what are the deeper ramifications for the party that – like it or not – has been the makeweight in government in this country for a long time.

The underlying question is what does the PD party stand for? Will it split due to personality differences because its members are no longer unified in their political thinking? This column has written before about the success of the PDs� Reaganomics in Irish policy. Taxes were cut, credit was made available and the economy took off.

There are problems, but the story about how a right-of-centre ideology liberated this country is incontrovertible. Flushed with success in 2000,Harney went on to muse with her Boston-Berlin speech about how far we could push this. There was a time when the fact that the PDs were obviously on the right side of history seemed enough to guarantee their place as a small but crucial part of government.

But maybe not any more Looking back over the past 15 years, there is little doubt that the fall of the Berlin Wall, the opening up of trade under the GATT world trade umbrella and the resulting phenomenon of globalisation has ushered in the single biggest change in economics in our lifetimes. Ireland, more than any other country, has benefited enormously from this. And the PDs, more than any other party, stood for this process.

But they did not get the credit. Now that the global pendulum might be swinging away from this golden era of free trade, it will be interesting to see whether the PDs can sidestep the resulting flak. All around the globe, from Latin America to western Europe, the consequences of the free movement of goods and people are being reassessed. The EU and the US talk openly about trade barriers with China and India. The corporate evangelicals, who preach the joys of the market, are failing to see that in many countries the ordinary man on the street feels threatened.

Our politicians appear out of touch. The huge influx of immigrants is making people nervous and in many European countries as well as, unprecedentedly, in the US, limiting immigration is very much on the cards. We may well be seeing the beginning of a new era of bigger government, smaller gaps between the very rich and the very poor and a type of Rooseveltian New Deal being put together all over the west, where we move to protect what we have and keep foreigners out. But before this happens, there will be a political crisis. If you doubt this, take a look at Holland, France and Denmark.

These are countries which were traditionally tolerant of immigrants, yet all have tightened their policies in the face of public anxiety. Globally, all it will take to prompt this paradigm shift away from unfettered globalisation is a global financial crisis and God knows there are plenty of possible sources for this. The Middle East, higher oil prices, higher interest rates, a housing market slump in the US – take your pick.

If this occurs, it will be hard to see which way the PDs will jump or why they might survive. Until that happens this most peculiar of parties will have to constantly reinvent itself. Is the mantra of low income taxes going to be enough? Given what I heard from Martin and Robinson last Friday, everyone is in that space.

The PDs, in the words of McDowell, have to be radical or redundant. But what can they do now that they haven�t had the opportunity to do over the past two governments? Is a manifesto that says they are – in the future – going to do all sorts, credible for a party that has been on a high-spending, see-how-it-goes trip over the past few years?

They probably feel that as long as credit is cheap and house prices keep going up, there will be no problem. If I were part of the state apparatus, I probably wouldn�t be worried either. Just think about it. Close to 50 per cent of the cost of a house from green field site to new-build goes to the state in taxes. So what is happening? The government – under the watch of the ��tax-cutting�� PDs – is giving all of us a chance to borrow for 30 years to make this one-off tax payment. What a scam!

Maybe the PDs could, in their next manifesto, stop worrying about income tax cuts and focus on the housing scam in an effort to get prices down for the average young worker. Now this would be truly radical and, by focusing minds, might iron out the differences between Harney and her uppity senior lieutenant. It would certainly make the rest of us sit up and listen.


  1. Dónall Garvin

    While Peter Robinson may be quoting that “The World is
    Flat” thinking that in a globalised world every
    country/region is capable of becoming world beaters.
    It is true that the economies of scale have shrunk in the
    information age; it is more accurate to say that “The World
    is Spiky”
    (http://www.creativeclass.org/acrobat/TheWorldIsSpiky.pdf)

    The PD’s were visionary in that they recognised what was
    needed in Ireland and sucessfully influenced decision-
    making in the South. Whether they can still play an active
    role, punching above their weight has to be seen,
    particularly if they are in opposition.
    The DUP has played no constructive part in Northern Ireland
    (either politically or economically), and it will be
    interesting to see just what they can do in power should
    they choose it. Peter Robinson may talk of big ideas and
    plans for the North, but don’t hold your breath.

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