1864, and after four years of epic struggle the Union was bone weary. Grant had lost a third of his army in a series of sidling battles with Lee in Northern Virginia while Lincoln, first elected in 1860, was desperately trying to become the first democratically elected president to seek a second term in the middle of a war. His chances looked doomed as a populist anti- war camp was gaining widespread support. Saying no to war, sundering the Union and abandoning millions of slaves was easier than continuing on. But Lincoln caught a break. Sherman took Atlanta, the commercial capital of the South, split the Confederacy in two and guaranteed Lincoln's second term.
If Kenny is to save himself and his Government he needs his own Atlanta. Despite Government attempts to restrict the debate to the substance of the Fiscal Compact we all know what this referendum is really about . As Atlanta fell for Lincoln, so too must Ireland's toxic national debt for Kenny, especially the €31bn created from dust by the Irish Central Bank. We are currently obliged to repay this perversity at a punishing interest rate and schedule. It will then be returned to the dust from whence it came on Dame Street - all to save a dead bank and a principle about not monetizing debt. The resultant debt / GDP is unsustainable at the rates of interest we are expected to pay. All Greece has done is to distract us from this inconvenient truth.
Kenny can win the referendum but only if the ECB board is first persuaded to turn a blind eye to Ireland not burning €31billions. Fear will drive the Yes campaign as assuredly as anger will drive the No one. Politically its that simple. But what of the economics? Pure horse sense tells us to stay out of this Fiscal Compact simply because it cannot work. Ireland's economy cannot carry the national debt, the internal debt like the Public Sector pension liability mountain and the vast scale of private indebtedness. How can increased taxes and further cuts ignite growth when both personal and Government spending are in decline?To believe that exports can carry the day anymore is delusional, not without domestic economic recovery. Austerity isn't designed to create growth, it is designed to bring the fiscal deficit back into balance. That is incompatible with growth. Still Eurozone policymakers talk the language of austerity, not growth and now wish us to vote for it.
The sooner that we collectively face reality the sooner we'll start thinking our way out of this mess. Without a Eurozone growth compact, debt relief is the only route we can take. Every other effort including carrying on the great extend and pretend game, is simply prolonging the agony. Despite rhetoric to the contrary the EU policymaking elite are bricking themselves over the Irish referendum because it threatens to unravel the illusion that Europe can adhere with Germanic discipline to a narrow set of rules. There is no chance of that working by first condemning large parts of the Eurozone to decades of punishing debt serfdom. A common currency cannot function without much closer political union and without surpluses passing freely to deficit economies. Just as the economic power of the Northern states helped to rebuild the South, rich Europe must invest liberally in struggling countries, starting with emancipating them from the yoke of the excess debt they simply cannot carry.
For that reason I find myself reluctantly in the No camp until Europe wakes up and finally gets the message.