Feel better this week? This writer’s own sense of things is that good news often comes in threes. What’s not to like about a potential Covid-19 vaccine, a law-abiding US President-elect and commensurate increased pressure on the UK to comply with international treaties in Brexit negotiations? Anyway, less of the rhetorical questions; the week also threw up three awkward answers which might not tally with the current feel–good narrative. Indeed, we are reminded of the King of the Swamp Castle’s words in Monty Python’s ‘Holy Grail’ movie – “This is supposed to be a happy occasion. Let’s not bicker and argue about who killed who”. So, let’s address those deaths first.
Despite almost 250,000 Covid-19 deaths in the US, more than 70 million voters didn’t think the shambolic pandemic performance of the Trump administration was a presidency killer. Yes, international reaction to a Biden victory has been very positive but there are real concerns about such a huge number of people keeping faith with Trumpian ‘values’ and the enabling behaviours of the craven GOP political leadership. The good news is that demographic trends indicate a GOP in decline – take your pick from youth votes, female votes, increased education and minorities population growth. They are all travelling in a dangerous direction for the GOP but a huge turnout has delivered a misleading 70 million voter number.
The truth in the data is that the demographic voter margins are widening, even accelerating. Perhaps, the biggest shock of the week was how close(initially) Trump came to winning. The ugly reality in the US is that voter suppression, gerrymandering and an outdated electoral college system is the GOP’s survival strategy and keeps up the big little lie that almost 50% of the country is in the MAGA cult. The worry going forward is that disputing a clear-cut 2020 election win is only the beginning of GOP desperation strategies. Prepare for a GOPocalyptic vision for the US; current control of the Senate and the US Supreme Court could lead to further and far more blatant destruction of democratic intent.
The UK is also smashing all the wrong records in its pandemic containment strategies but has added economic hara-kiri to its challenges. The economic intent and understanding of UK Brexit voters plastered on buses in 2016 is rather different to the realities of today. The big little lie in UK is that a population of 65 million souls can leverage greater trade opportunities than a 600 million person market with the rest of the world. The Confederation of British Industry(CBI) has recently totted up the cost/benefit of EU membership since 1973. The CBI reckons total costs/contributions of £215 billion over 45 years have delivered an annual return value of £70 billion or £3.25 trillion. Total expenditure on Brexit since 2016 is already at £203 billion, per the CBI, with a return value of…… ? Take your pick from trade wreckage, international ridicule, Kent borders and lorry parks, break-up of the Union and loss of travel rights. Sadly, Ireland will have to share some of the pain but also needs to rid itself of its own big little lie.
The Irish pandemic response has received positive reviews in the main and the economy has shown amazing resiliency thanks to a multi-national sector heavily exposed to technology and healthcare. However, we have previously written about the K-shaped nature of our economic recovery. The SME sector employs more than 1 million people and has suffered huge hits to revenues and balance sheets. The government has made plenty of noise about a €6.5 billion package of financial support for SME firms. Up to €2 billion of that was intended to be a flagship scheme of loans 80% guaranteed by government with 20% of the risk taken on by our three banking horses of previous apocalypse – AIB, BOI and Ulster. So how’s that working out? Well, the Department of Business, Enterprise and Innovation has published some figures.
Remember that €2 billion of available funding and the very obvious SME distress for all to see? For context, the country has about 250,000 SME firms. Now the big little lie. Well, you’ve seen the big numbers – 2 billion and 250,000. Now try the little ones – 43 million and 743 respectively. Yep, a grand total of just €43 million has been approved for distribution across just 743 loans in the SME sector. Clearly, something is terribly wrong with this funding solution – previous writings here would query debt instruments and traditional banking platforms as an unattractive combination. However, do not be fooled into thinking reluctance to borrow equates to an absence of need. For context again, we note Central Bank deputy-governor, Ed Sibley, stating that Irish SMEs face combined losses of up to €11.7 billion in 2020 alone.
Government support for SMEs is not working and is now in big little lie territory. The silence on alternative thinking and solutions is deafening. In fact, if you listen very very carefully you might just detect the distant sound of coconut claps and the deluded knights of Kildare Street crying “Run Away! Run Away!”