Monday, November 29, 2010

Who said that irony was dead?

Yesterday evening (Sunday), while following news reports from Brussels on the emerging detail of the IMF/EU deal for Ireland, we suffered a power-cut. Clearly no time was being wasted in implementing the austerity measures.

When power was restored about an hour later, during the Taoiseach’s televised news conference, the on-screen programme guide indicated that we were watching “The All-Ireland Talent Show”.

You couldn’t make it up!

Footnote: Published as a letter in the Irish Times

Sunday, November 21, 2010

Politicians step up to the plate, media step back!

Hubristic incompetence has been the hallmark of the Governments, bankers, regulators and developers who have brought us to our present dilemma.

Now, when a light at the end of the tunnel is urgently needed, the fatalistic populism in our media gives rise to a real danger of creating the environment where “the man who thinks he can’t succeed is usually right”.

Ireland, through its people, is capable of getting through the current crisis, despite the hard choices, at national and household levels, which must be endured in the coming years.

A universally negative attitude will only delay the economic recovery and add to our general depression. Without resorting to unrealistically optimistic panaceas, we need to inject some positivity into the national discourse, put our heads down and get on with saving ourselves. We can do it and no-one else will do it for us.

We need the political system to step up to the plate and, perhaps, the media to step back from it.

Saturday, November 20, 2010

A warm welcome to our friends from the IMF & EU

Despite the recurrent theme of “a loss of sovereignty” from opposition politicians and media commentators, I can’t say that I’m greatly perturbed to have the IMF/EU as guests of the nation.

They might just ensure that the bullets that need biting are actually bitten and that our hoped-for economic recovery isn’t compromised by the incompetence and gombeenism of our elected representatives, particularly those currently in Government.

So, in addition to scrutinising our banks, I hope that the visiting IMF/EU team prioritises an impartial bench-marking exercise to compare the public service size, pay levels and pension entitlements with other EU countries.

Our elected politicians should not be exempted from this exercise.

A major cull of the numbers in the Dáil (166) and Seanad (60) would represent no great loss to the nation. Listening to the candidates in the upcoming Donegal by-election would tend to confirm this view.

Footnote: Section in italics published as a letter in the Irish Times.

Sunday, November 14, 2010

Time to buy Govt Bonds

Irish government bonds, recently trading at over 9% on the secondary market, are being sold at a significant discount to their original issue price.

The government should now instruct the state-owned National Pension Reserve Fund (NPRF) to buy these bonds at their current discounted levels.

There are a number of benefits to this approach:

(i) it will, in real terms, improve our National Debt:GDP ratio

(ii) it will send a signal to the markets that we have confidence in our ability to manage our way out of this crisis

and last but not least,

(iii) it will remove these headline-grabbing rates (for relatively small amounts of stock) from the domestic and international media with their confidence-sapping talking heads, headlines, opinion columns and editorials.

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.

Thursday, November 04, 2010

Does this Government have any moral authority to govern?

The recent red paint incident involving Health Minister Mary Harney highlights a key issue: the willingness of this minister to turn up to claim the credit at the launch of any new health service initiative while persistently refusing to accept any political responsibility for failures in the health service.

Minister Harney is far from unique among her cabinet colleagues in this regard.

Now the High Court has found that the Government is in breach of its constitutional duty with regard to the Donegal by-election and the only defence offered by the Government is that the courts have no jurisdiction in this blatant abuse of political power.

Does this administration have any remaining moral authority to govern us?

Monday, November 01, 2010

Mary Harney painted red!

Isn’t it interesting that Health Minister Mary Harney can regularly turn up to claim the credit at the opening of a new health facility, while consistently denying responsibility in the Dáil for anything that goes wrong with the health service?

Attendance of this type of PR event, supposedly “state business”, is one of the justifications offered for the provision of the chauffeur driven state limousine to each minister. (The current batch of ministers would go to the opening of an envelope and think nothing of the cost of use of state cars, jets or helicopters to get them there and back!)

However, following the red paint incident today, they’ll be able to claim that personal security is the key consideration in deciding to keep their cars.

Personally, I’d give each minister a supply of paint remover and a book of dry-cleaning vouchers and tell them to provide their own transport in future.

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