Sunday, November 14, 2010

More Pop-enomics from the McWilliams & Lucey double act

Last Fridays’ “Today with Pat Kenny” show on RTE radio was broadcast from Kilkenny where accomplished self-promoter David McWilliams was hosting "Kilkenomics", a 3-day mix of economics and comedy, presumably for his own financial/publicity gain.
Given the participants, it should have been branded “Pop-enomics”.

Both McWilliams and his attendant acolyte Brian Lucey are routinely treated as oracles, rather than orifices, by Pat Kenny and the media in general. Friday’s broadcast was no exception.

It’s the new truth – economists/academics have become the new terrorists – they only have top be right once. (Though I’ve no evidence that Lucey even qualifies under that banner).

The next time Kenny is in their exalted company, I suggest he might quiz them on the following pronouncements:

On September 28th 2008 David McWilliams published this opinion piece in the Sunday Business Post.

In it McWilliams advises the Govt “The only option is to guarantee 100 per cent of all depositors/creditors in the Irish banking system. This guarantee does not extend to shareholders who will have to live with the losses they have suffered. However, it applies to everyone else.”

That seems unequivocal and includes the subordinated bond-holders of ALL institutions, don’t you think??

McWilliams also asserts that this guarantee will cost the country nothing as it will never be called in! (We now know better!)

Doubtless this is the same advice McWilliams gave Finance Minister Lenihan at their midnight meeting, following which the Govt announced just such a blanket banking guarantee.

We don’t hear McWilliams claiming the credit for this particular piece of foresight, do we?


In the Irish Times of June 30th 2009 Harry McGee has a report on Prof. Brian Lucey’s December 2005 prediction of ongoing growth in the housing market and the potential for subprime lending by Irish mortgage lenders.

In an analysis prepared for mortgage company Homeloan Management Limited in December 2005, Prof Lucey dismissed the notion of an unsustainable property bubble and forecast the Irish housing market would continue to grow at a “modest but still significant pace”.

Lucey also identified more scope for increased mortgage lending by financial institutions by means of subprime mortgages, 100 per cent mortgages and equity-release loans.

Could Lucey be accused of rank hypocrisy now in his categorisation of bank mortgage lending as reckless, when they were merely agreeing with his own assessment? As it turned out, both were grievously wrong but only the banks are in the dock.


Karl Deeter didn’t feature on last Friday's radio programme, at least the bit of it I heard, but he was one of the signatories to a proposal calling for mortgage debt forgiveness published in Wednesday’s Irish Times.
The opinion piece in question carried no health warning as to the possible conflicts of interests of the signatories, the rest of which were a selection of academics.

However, Deeter is a mortgage broker and presumably is currently feeling the pinch in an almost dead housing market, where banks have seriously restricted their lending criteria and significantly reduced the commissions they will pay to mortgage brokers.
In addition, in a recent media appearance Karl Deeter stated that he himself is in a negative equity situation.

Could Deeter be more compromised? He's perfectly entitled to publish his views but we should be made aware of any vested interest he's representing. But did the Irish Times query the bona fides of this latest batch of harbingers of doom which, incidentally, included that ubiquitous media whore Brian Lucey. Of course they didn’t!

The above merely serves to illustrate the difference between a commentator and a policy maker.
Commentators can change their position on a regular basis and are almost never challenged by their fellow-travellers in the media about such u-turns.

Politicians, on the other hand, have to make actual decisions and are crucified by the media when they are sometimes forced to make u-turns.

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