For lefties too stubborn to quit
Sunday Independent Stupid Statement of the Week 08:37 Sun Aug 31, 2014 | Garibaldy
The Sandbaggers 15:09 Sat Aug 30, 2014 | WorldbyStorm
F-16?s over Dublin. 13:57 Sat Aug 30, 2014 | WorldbyStorm
Alistair Cooke?s Letter from America ? 1969 to 1980. 12:09 Sat Aug 30, 2014 | WorldbyStorm
This Weekend I?ll Mostly Be Listening to? Helen Love ? the Radio Hits 01:48 Sat Aug 30, 2014 | WorldbyStorm
Cedar Lounge >>
Life should be full of strangeness, like a rich painting
I SEE THE CLICHÉ CHICKENS ARE BACK AGAIN TED 10:02 Sat Aug 30, 2014
IRELAND?S TAX HAVEN INDUSTRY 22:01 Tue Aug 05, 2014
IPA Summer School - Social Justice, Poverty and Ireland - 28 July 2014 11:56 Mon Jul 28, 2014
Feminist Economics - Cuts are a Feminist Issue 08:21 Wed Jun 18, 2014
Feminist Economics - Care and Social Reproduction 16:11 Fri Jun 13, 2014
Dublin Opinion >>
Joined up thinking for the Irish Left
After the Gaza Massacre and After the Marches, What Do We Do? Thu Aug 28, 2014 16:10 | David Landy
Two London Exhibitions: Two Ways of Seeing Thu Aug 28, 2014 10:07 | Seán Sheehan
Connelly Youth Movement Talk: Latin America Today, Saturday 14:00, Connolly Book... Thu Aug 28, 2014 08:39 | Irish Left Review
Dismal Job Numbers Expose Government Spin Wed Aug 27, 2014 13:04 | Michael Taft
Deng Xiaoping ? The World?s Greatest Economist Tue Aug 26, 2014 10:56 | John Ross
Irish Left Review >>
Welcome to the downward spiral!
Sunday February 24, 2013 10:52 by Luke Eastwood
Despite the continued 'green shoots' talk, recovery seems increasingly far away.
It does not take a genius or even an economist to realise that we are in fact in the depths of a major depression, which is continuing to worsen. The mainstream media, especially the USA media 90% of which is owned by just 6 corporations, continues to talk up a recovery but this is pure hyperbole that an intelligent person should be able to see through.
Peak oil pundits have suggested that the effects of hitting the plateaux would be like a car that keeps stalling each time it gets into second gear. This crude analogy seems to be entirely appropriate – attempts to kick start the western economies have short-lived and limited effects because the underlying problem of relatively high production and employment costs will not go away. This is exacerbated by the high price of oil, which itself feeds into the increasingly high prices of basic commodities such as food and minerals.
So now rather than peak oil, we might be finding ourselves in a situation of peak everything! As prices rise and debt levels too the printing of more money (quantative easing) makes the situation worse by devaluing currency, making everything even more expensive, fuelling even higher inflation and continuing to reduce the buying power of every individual’s pay packet.
Economies with cheap labour and an abundance of resources (e.g. China) have done very well due to the imbalance between their production costs and those of western economies. However, as the western powers lose their buying power and people increasingly focus on necessities instead of luxuries, they too may well be affected. With a collapse in its export market China may not have a sufficiently strong local or domestic market to continue its expansion and any fiat currency based system of commerce that is not expanding is in crisis.
So what does the future hold? Simple household economics will tell you that if you don’t have enough money to cover your costs then you have to cut your spending until it is equal to or less than your household income. Using myself as a perfect example – I have relatively well paid professional employment but I have remained on the same salary to 5 years.
In truth my static salary has led to a reduction in income, in part due to inflation but also due to rises in taxes. So in order to compensate for this reduction I have had to reduce my household spending by finding better deals (e.g. cheaper insurance), providing essentials myself (food and fuel) or by simply cutting certain items from my monthly budget.
I’d consider myself fortunate that I am able to continue with my life pretty much as normal after accepting some cutbacks and adjustments. Many millions of people are not half so fortunate. In the western economies millions of people are defaulting on their debts, losing their homes and falling into poverty. Elsewhere the situation is far worse – in Egypt for instance most families spend 80% of their income just on food!
All indications are that this depression is far from over, in fact it looks set to become increasing severe in the years ahead. This situation may be exacerbated further by the currency wars that have begun and indeed by the real proxy wars between the main rival blocks (NATO and SCO) taking place in Africa and Arabia as I write.
Given this grim outlook I would consider it wise to be prepared for the worst, although I am ever hopeful that we might escape the worst case scenarios predicted by some commentators. If you can – pay off your debts; save some money as physical cash or metals; reduce your outgoings on unnecessary expenditure; become more self-sufficient. Even if things do not turn out as bad as predicted – cutting away self-indulgence and becoming more self-reliant are positive steps towards gaining more control over your own life – something worth doing even if a financial collapse is not coming.
Luke Eastwood is a writer and horticulturist living in Ireland,