I note several people have passed critical comment because I suggested that the Irish bailout was failing yesterday.

This morning that seems to be the consensus view. The Guardian reports:

We know now what €100bn buys you these days. It buys you a rally that lasts a morning. Then the selling resumes.

[The] announcement that Ireland was seeking a bailout from the International Monetary Fund and the European Union was supposed to be the moment the policymakers fought back against the bond traders.

News of the emergency package was supposed to boost confidence that Ireland could pay its way in the world and provide enough capital to resuscitate its zombie banks. It was supposed to provide a firewall that would prevent the crisis spreading to other weak members of the eurozone.

And so it did, but only until lunchtime.

And as the FT notes, the attempt to stop the spread looks like it is failing:

Spanish and Portuguese leaders, with reinforcements from Brussels, are fighting a rearguard action to convince investors that there is no need for further eurozone bail-outs after the €80bn-€90bn ($109bn-$122bn) rescue agreed for Ireland at the weekend, the FT reports.

And, of course, it’s already brought down the Irish government — which will fail any day soon.

So what’s happening. Steve bell summarised it incredibly well in the Guardian (I rarely copy such things, but this is too pertinent to miss):

Polly Toynbee also hit the nail on the head (and yes, as the article makes clear, she did discuss the issue with me):

The bailout of Ireland and its banks is so odd that it takes triple somersaults of the mind to accept that this can really be happening at this time, on these terms and with so little reform of the banks.

Yet again the western world teeters on the edge of calamity caused by the bank-lending extravaganza that fuelled the great property bubble. As the euro rose then fell and Moody's credit rating agency today pronounced that "a multi-notch Irish downgrade is most likely", Europe holds its breath. Will the market predators be halted at Ireland, or might the rating agencies knock down all the dominoes one by one, first the weak countries, then the strong? Meanwhile a Europe-wide fiscal tightening panic may yet bring about the very thing it seeks to prevent, as democracy once again falls under the wheels of finance.

In that case is is unsurprising that the people of Ireland look to be in near revolt. Or that the people of |Jersey are beginning to show the same sentiment. As was said on this blog this morning about Jersey:

The interests of Finance have been intimidating progressives in the islands for a long time. However, things are changing. The Fear Factor no longer works. Islanders are refusing to be intimidated into silence about the social injustice that has simply got worse. They realise the island has been captured economically and politically and the dependence on a single industry is jeopardising living standards. The Crisis has revealed that Finance is not infallible and that it is a civic duty to state openly the dangers we face.

If sections of the opposition can put aside its sectarianism, there can be an effective opposition alliance of unions and progressives to protect the interests of working islanders.

Tell Mr B[oothman] we will no longer submit.

I don’t think people will. Colm Toibin, talking about Ireland said this is a small crisis this morning — a simple mater of debt, and in the big order of things it will pass. I’m afraid he’s wrong. As Philip Stephens notes in the FT this morning:

Governments cannot deflate their way back to budget balance — a proposition that Ireland’s latest austerity package may yet test to destruction.

It was a decision not to support some sections of the community in Ireland whilst others had plenty that led to the Famine with all the consequences that followed. For those who suffer unemployment, loss of housing, access to work even, and to social well being this is not going to be a small crisis. this is about the denial of the essence of citizenship, of access to society, to human interaction itself that we may be talking about. This is not a mere financial problem. This is much deeper than  that, and with far more profound impact.

Yes, it is financial markets and their reactions we gauge, but if they lose confidence then don’t think that’s a mere issue of speculative gain or loss for a few )although that it is, undoubtedly). This is an issue of social consequence for many, maybe for the rest of their lives.

And I don’t think people are willing to see their lives crushed to meet the needs of banks anymore.

And people won’t tolerate George Osborne celebrating overturning the most minor of banking reforms — the disclosure of bankers’ pay. That’s symbolic of his attitude that bankers must keep all the privileges they have. And right now it’s very clear that this hierarchy — with bankers at the top — is dragging democracy and the nation state down.

These are dangerous times as a consequence. I take no pleasure in saying a bail out might have failed — but as the contagion spreads — as it looks likely it will — we’re going to need politicians who say loud and clear one thing — which is people first.

Then and only then can we be sure democracy will survive this.