Paul Vallely: Protests may differ but trouble is certain

In Ecuador they riot, in Ireland they block the gates to Parliament, and even the Tea Party is on the march. Where next?
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The Independent Online

It is, of course, an extreme case. On Friday the president of Ecuador was besieged by his own riot police inside a hospital where he had taken refuge after one protesting policeman hurled a tear-gas canister at his elected leader.

The police had taken to the streets in indignation at plans by the government, led by the leftist economist Rafael Correa, to introduce a national austerity package in response to the cost of the global banking crisis. Police bonuses were being slashed and their promotions curtailed.

Two people died and 37 were injured. At one point President Correa appeared on a balcony, surrounded by troops, tearing at his shirt and taunting the rioting officers to kill him now if they dared.

Contrast that with the demonstration against planned public spending cuts which took place outside the Liberal Democrat conference two weeks back. There the Liverpool Socialist Choir – clutching their songsheets, cagoule hoods up and sheltering beneath brollies – sang their new anti-cuts anthem to the tune of "Oh! Mr Porter". Bringing back the guillotine for Messrs Cameron, Clegg and Osborne was the only kind of cuts they wanted to see. Death by a thousand lampoons. That will show the buggers.

Yet if the madness of crowds varies wildly from one nation to another, there can be little doubt that the sense of outrage of the ordinary Joe and Josephine is growing. In their cross hairs is the madness of the markets – and the greedy bankers who sought to benefit from that, and then ended up nearly stalling the entire international economy.

Experts in bereavement will tell you there are five classic stages in the human response to death; they apply, it seems, equally aptly to our collective reaction to the death of the boom-without-bust good life.

First comes shock, then denial. But the third stage is anger, and that is what is rising in the global gorge. In the US it is evidenced in the unfocused and ill-informed fury of the populist political movement known as the Tea Party, which has spontaneously combusted a series of local and national protests. They began as opposition to President Obama's emergency economic stabilisation measures and his reform of the health care system. But they soon broadened into attacks on federal spending, regulatory bureaucracy and anything else the government proposed – even carbon trading and other measures to combat climate change.

Unlike the Liverpool Socialist Choir, who looked like seasoned campaigners, the Tea Party folk aren't the usual suspects to be found on anti-war or labour movement marches. Most, according to the US law professor Glenn Harlan Reynolds, one of America's most widely read political bloggers, have never attended a protest before. "They represent a kind of energy that our politics hasn't seen lately, and an influx of new activists," he wrote.

To be sure they are an unattractive crowd. Polls show them to overwhelmingly anti-immigrant, anti-gay, anti-Muslim, anti-Obama and convinced that blacks are favoured over whites in modern America. But they want the government to limit Wall Street bonuses and, with an extraordinary lack of consistency, overwhelmingly want the federal government to help with job creation. Revealingly, one of their emblems is a flag depicting a rattlesnake and the words "Don't Tread on Me". And they are levelling their ire not only at the Democrats in power but at Republicans whom they regard as just as problematic parts of the political establishment which got us into the existing economic mess.

You might dismiss all that as a transatlantic extremity. If so, consider what is happening across a far smaller sea in Ireland. On Wednesday, a cement truck was rammed into the front gates of the Irish Parliament in Dublin in protest at the country's catastrophically expensive bank bail-out. Written across the truck's barrel in huge red letters were the words "toxic bank", along with the logo of the Anglo Irish Bank, which was nationalised last year to save it from collapse after it lent billions of euros to property developers who went bust.

Ireland, you will recall, is the country which has been held up by George Osborne and co as a model in cutting the public sector fast and efficiently. One of its finance ministers, Martin Mansergh, is even due to give a speech in London this month on "how to cut public spending". The solution involves trebling unemployment, 15-20 per cent pay cuts, and a drastic fall in trade for those great barometers of disposal income – pubs and taxis. Emigration is at its highest for decades. Speculators are using derivatives to target Ireland's debt. Those on the lowest incomes are feeling the cuts most harshly.

Small wonder that a few hours after the churning urn had crashed into the gates of the Dáil, a noisy trade union march filled the streets. Worse was to come. The next day it was disclosed that the cost of rescuing Anglo Irish was far higher than had previously been supposed. It will push Ireland's public deficit to a whopping 32 per cent of GDP this year, 20 times the eurozone's approved limit, threatening the country with insolvency. Some 61 per cent of the population now want their prime minister to resign.

It is not hard to imagine all this coming to a street near you some time soon. The same outrage was being articulated at the Labour conference in Manchester last week. The time had come, many delegates and union members clearly felt, for it to be more baldly stated that bankers and the rich should pay for the economic crisis they had caused, not ordinary workers.

That notion might make no practical sense to some economists. But collectively, crowds think differently and emotively. A sense not merely of social justice but of social indignation is rising at the realisation that the proposed cuts will hit the frailest the hardest. They will affect women three times more than men, according to Labour's Yvette Cooper. They will have a greater impact in the North and west than in the South. They will hit the sick, the disabled, pensioners and children hardest of all.

There is more to this than the rhetoric of opposition.

A survey by the business information company Experian for the Financial Times on Friday provided a stark picture of where the coming cuts might have the gravest impact. Middlesbrough, Plymouth and the Wirral came top of the list of areas which have high levels of public sector employment combined with low levels of economic resilience – measured through insolvency and self-employment rates, numbers of exporters, business density and a lack of high-growth sectors. It also suggested that such places could become no-go areas for bankers when it comes to making loans to businesses.

Any cuts programme needs to give compensatory attention to vulnerable places and people. But it also leads us to question whether the coalition has the balance right in reducing the deficit by 80 per cent with cuts and by only 20 per cent with tax rises. Many people clearly feel not. There is going to be trouble ahead.