Economists - the new media terrorists?

Last September, in the wake of the Govt €100k deposit guarantee, David McWilliams was the first person I saw publicly call for the Government to provide a 100% guarantee of all the liabilities of the Irish banks, not just their deposits.

http://www.davidmcwilliams.ie/2008/09/28/state-guarantees-can-avert-depression

Then, at end December, he called for nationalisation of Anglo Irish.

http://www.davidmcwilliams.ie/2008/12/31/nationalisation-of-anglo-could-actually-be-a-help

However, included in this latter article is the following paragraph: “About a year and a half ago in ‘The Generation Game’, I wrote that “one of the big Irish banks is simply a leveraged hedge fund betting its own and its clients’ money on overvalued property” and “normally when the property market collapses, these type of outfits go bust”.”

Am I alone in finding it difficult to square the thinking behind these two pieces?

If McWilliams was convinced, as early as mid-2007, that Anglo was “simply a leveraged hedge fund betting its own and its clients’ money on overvalued property” and “normally when the property market collapses, these type of outfits go bust”, why, following the collapse of that property market, was he calling in September 2008 for the Government to guarantee all the liabilities of Anglo Irish???

When I listen to the plethora of economists who now seem to fill our media 24/7, there seem to be almost as many potential solutions as there are contributors.

The beauty of being a media talking head is that you don’t have to be consistent in your diagnosis, prognosis or prescription. Hindsight is your crystal ball and you will rarely be challenged on how your previous analysis has actually held up.

Government doesn’t have the same leeway – they have to take decisions and live, or die, with the consequences.

It reminds me of the standard line on terrorism: the security forces have to get it right all the time, the terrorist only has to get it right once.

Are economists our new “media terrorists”?

And who ever would have thought that our universities have so many professors of economics and banking – all budding media performers in recent months. It must be a tidy little earner to supplement their miserable college stipend. Some will be hoping this recession/depression lasts for several years.