I just sent the following letter to my public representatives here in Ireland on the subject of the madness that is NAMA; if you’re in the same sinking ship I encourage you to do the same: you can find the addresses you need here. Those of you outside of Ireland should pause for a moment and consider the progress of a country determined to not only undo its achievements but also put paid to any future ambitions.
I am writing to you to express my deep concern as an Irish citizen about the establishment of NAMA and, in particular, the unorthodox methods being used to establish the value of properties concerned.
Perhaps all concerned are acting in good faith–but there is a great danger that the present and future treasure of our country, of our children and our grandchildren, will be squandered: all in a vain attempt to mitigate the losses of a reckless element.
The thinking of course is that those losses, when realized, represent a systemic risk. That may be so. But the creation of NAMA, like so many responses in this crisis, is ill-conceived and burdensome.
- For one thing, why are stakeholders in our banks not absorbing the losses first?
- For another, why are values being determined as though they will not fall further?
- And, to stop only at three points where a dozen could be made: how immune is NAMA to the “stroke-pulling” that seems endemic to our public life?
I would appreciate you redoubling your efforts to stop NAMA; if you are in support of it, I beg you to reconsider.
from brian lucey: “Why would a temporary nationalisation of the banks be a bad thing, given that this would provide the taxpayer with a valuable asset which could be sold in future years?”
It’s not a bad thing and is likely to happen anyway. from what I hear AIB needs further recapitalisation which will mean that the state (ie. us) will have to take a larger ownership stake in it. the more we own of a bank, the more we influence its management, this, in my view, is close to nationalisation anyway.
In summary, we’re going to have to spend an utter fortune to clean up the banks and get a functioning banking system (eg 60bn or something). even though AIB and BoI are huge parts of the iseq and probably held by lots of irish pension funds, perhaps we should let them crash if they cannot make it work themselves…. nationalist feelings aside, I wouldn’t be averse to having a foreign bank offer merchant and retail banking in Ireland. if we can’t do it ourselves, feck it, import a solution!
Thanks for the comment, Declan: temporary nationalisation seems to be coming inexorably closer all right.
But why save them all?
In the free market that is (supposedly) the EU, by all means let’s have some foreign banks on our High Streets. There should be at least one though that is home-grown: an economy of our size, even in a reduced state, ought to naturally produce a few sound/prudent financial institutions.
(We may have to scout overseas though for sound/prudent bank executives however. I’m inclined to headhunt in either Norway or Canada).
Our problem was that we had way too many banks looking to create, at all costs, way too much domestic business.
Shedding a few of these would surely be a welcome relief and not have a drastic effect on neither our system nor our international reputation.
Murchu_an_tEacnamai wrote:
July 18, 2009 7:11
Just over 20 years the Cork University professor, Joe Lee, published a history of modern of Ireland that focused on the dominance of possession (of power, property, land, a rent-generating activity, a secure, pensionable job, etc) over performance.
This is accompanied by, and reflected in, localised political clientelism, corruption of a soft and insidious variety, cronyism among the political, business and professional elites and corporatism advancing the interests of the management and staff of state-owned interests at the expense of the public.
By examining the economic and social progress achieved by other small European countries, Joe Lee was able to conclude that this obsession with possession accounted for much of Ireland’s relatively poor performance since independence in 1922.
http://www.economist.com/agenda/displaystory.cfm?story_id=14025314&fsrc=rss&mode=comment&intent=readBottom
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