Saturday, November 15, 2008

Obama victory brings hope and fear

One would have to have had a heart of stone to have not been inspired by the historic milestone America and the West has reached in America electing Senator Barack Obama its first African-American president and head of state. In chronological-terms it is not long since such a landmark event would have seemed implausible if not impossible - and all the more so Obama's victory in 3 former states of the Confederate South (Virginia, North Carolina and Florida). It was personally moving to see tears rolling down the faces of icons of the Civil Rights movement such as Rev.Jesse Jackson and African-American celebrities like the talkshow-queen Oprah Winfrey. As a formerly oppressed nation ourselves, the Irish people are well aware of what it is like to be discriminated against because of the ethnic-group or religion we are born into. We endured it for 400 years under a litany of repressive legislation that began with the Statutes of Kilkenny barring the native Irish from adoption and intermarriage, and then progressed to wholesale confiscation of land under the Plantations and later on the Penal Laws. We eventually righted those wrongs, culminating in the independence of 85% of our island, and likewise the African-American community were eventually able - with the support of Progressive and tolerant Whites and Hispanics - to right the wrongs done to them. In the process they have encouraged other beleaguered minorities such as the international gay-community to press on for their rights in terms of gay rights, including marriage, and the fight against hate-crimes and discrimination in the workplace and in terms of access to goods and services. This is especially relevant as the Irish gay community await the fulfillment of the Programme for Government with respect to same-sex civil-partnerships. It is just as essential that the Government and Opposition are as vociferous in standing up to the Irish Catholic hierarchy in pressing for this measure as it was for the overcoming of the glass-ceiling on ethnic-minorities aspiring to high office in the United States.

But there are broader implications for this country beyond what I have outlined above. As the economy teeters on the brink of a recession becoming a depression, the maintenance of American Foreign Direct Investment in this country becomes all the more critical to our eventual emergence from this dark economic-tunnel into which Fianna Fáil incompetence has forced us. The Obama manifesto sets out policies that would make it much more difficult for US corporations to shelter their overseas income from the US tax authorities while incentivising them to create more jobs at home. Faced with a budget deficit that could yet reach $1 trillion, the intent is obviously to increase government revenues while stimulating economic activity on the ground. This is in keeping with policies designed to reverse the downside in the US from globalisation, where many multinationals have outsourced operations to cheaper locations overseas at a cost of millions of jobs.With US stock markets in dire condition and many companies struggling for survival, Obama will have to measure the desirability of a higher tax take against the risk of endangering company viability or competitiveness in the global market. After all, his most urgent immediate task in the White House will to be to arrest the rapid decline of the US economy, which is in the maw of a crisis comparable with the Great Depression of the 1930s.Tax policy - a fundamental economic lever for any government - will be crucial to that effort. Obama was co-sponsor of a Senate bill last year that aimed to bring some $30 billion of business profits into the US tax net by curtailing the use of secretive offshore tax havens.Such jurisdictions offer zero or very low tax rates, a lack of transparency and the absence of any requirement to carry out real business. While Ireland was not specifically named, his manifesto includes a pledge to significantly modify the rules on the "deferral" of US taxation on business profits earned overseas. Deferral means means corporations don't pay US tax on foreign profit from active business until the money in question is returned to the US. A reform of the rule could see a greater portion of foreign profits taxed in the year they are booked, increasing a corporation's upfront tax bill and potentially acting as a disincentive to foreign direct investment unless there is a compelling reason to be in a market. In theory at least, an outright elimination of the system could seriously threaten US investment in Ireland."Unless you have a real reason to be in that market you probably might think twice about investing," said Leonard Levin, a tax attorney at New York accounting firm Weiser.

All of this underlines the fallacy of the government's growing obsession with the rejected ratification of the Lisbon Treaty. Mary Harney was right in 2000 to describe Ireland as "closer to Boston than Berlin", and the no vote was in part a reflection of that. Since the birth of the Celtic Tiger (which was conceived by the reforms of 1987 and 1989-92), our political elite in the cocoon on Kildare St has been feeding us a false narrative that seeks to attribute the boom to the European Union. This is a false narrative and now more than ever deserves to be challenged. Where was Brussels when we needed them over the Government's deposit-account guarantee scheme? The reality is that at a time when their judgement is being tested more than ever over the economy, Fianna Fáil and the Greens need a distraction, and their 'jihad' to foist Lisbon on the Irish people looks as good as any in terms of attempting to keep the recession (or as increasingly looks likely a Depression) off the frontpages. In this, they have been unsuccessful, but with Fianna Fáil on 25% in the latest TNS-MRBI Irish Times opinion-poll, a kitchen-sink strategy has obviously been decided upon. The incessant smear-campaign against Libertas founder and anti-Lisbon campaigner Declan Ganley has been the hallmark of a Government campaign against the wishes of its own people. Devoid of understanding and in some cases even of readership of the contents of the Treaty, they have resorted to playing the man and not the ball. As the recent visit to Ireland by the Czech President has shown, they are prepared to stretch legality to its very limits by restricting access for the Irish media to the dinner attended with members of the Government. The Czech media, on the other hand, were allowed in. Is this the kind of freedom the media and the Irish people can expect under the Charter of Fundamental Rights which would be enshrined into European law under the Lisbon Treaty, should it be ratified? Was it for this our forefathers died in 1916 and the War of Independence? Did they die so that a foreign-dominated European Court of Justice could overrule the Irish Supreme Court on all matters of fundamental human-rights (through the Charter) ranging from capital-punishment for rebellion against the EU, free-legal aid to illegal-immigrants appealing against their deportations (Article 47), the right to remain illegally in a member state (Article 21), the potential reopening of the Irish-born child loophole closed in the 2004 Citizenship referendum (Article 24), the prevention of criminals being tried again after acquittal even if new evidence as to their guilt comes to light (Article 50), the right to strike (Article 28)? I think not. Keep Ireland free and in control of its destiny. Welcome those - like President Klaus, who would stand with the Irish people against imperial encroachments by the Big States, and stand up to those, like Sarkozy and Merkel, who want us to 'vote again' until we give them the 'right answer' that even President Sarkozy's own people wouldn't give him in the 2005 referendum on the EU Constitution. The answer is still no.