Sunday, May 03, 2009

Mick Wallace - due a haircut.

Last week the Irish Times published an opinion piece by Dr Alan Ahearne, a prominent UCG-based economist who’s now working for the Minister for Finance. Developer Mick Wallace wrote a fairly scathing letter, about that article, which was published last Wednesday 29th April.

Madam, – I find Alan Ahearne’s argument against nationalising one or more of our banks a bit weak (Opinion, April 25th). Why would the wholesale international money markets be less inclined to fund our banks if controlled by the State as opposed to the fine gentlemen who have presided over affairs for the past 10 years?
He argues that some banking decisions might be political rather than commercial if nationalised. Does he really think that our banks have been immune from political decisions? My experience as a developer has been different.
The State Bank of China is currently playing a major role in rejuvenating the Chinese economy with a huge investment in infrastructure – the smart money bets that they’ll probably deal with the recession better than most.
I’m amused to find Dr Ahearne praising a government that he spent so much time ridiculing not so long ago. But then it does pay his wages now. American economist Paul Krugman has noted that “people in power prefer to take advice from those who make them feel comfortable rather than those who will force them to think hard”. Pay, Pipers and tunes come to mind.
Yours, etc,

While reading Mick Wallace’s letter, and considering the position of banks and developers in the current property crisis and the impending NAMA process, the word “haircut” came to mind, for some obscure reason.

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