By | October 24, 2008

An upside of the crisis: the sheer entertainment value and joy of watching truly excellent commentators.

My Top 5

David McWilliams
Brendan Keenan
Shane Ross
George Lee
Colm McCarthy

Keenan is on top form today arguing against government investment in the recapitalisation of banks:

“The mess is one of too much debt. To fix that, credit will have to be curtailed. People will have to save more and consume less. That is bad for economic growth and unpleasant for individuals. It is, however, unavoidable. Governments or voters who think re-capitalising banks is a way of avoiding these harsh truths are seriously deluded. It is merely a way of averting something worse.

For at least these two reasons, I would like to think that the Irish guarantees can keep the system functioning until panic subsides, banks which need fresh capital can raise it themselves, and any that can’t sell themselves off or close themselves down.

It seems unlikely, though. In a way, one is surprised the guarantee trick has worked even this long. But, if we do eventually have to dig out all those billions, just don’t be fooled by the banks’ bleatings that it is all for the best, or Government blandishments that it will somehow take away the pain.

22 thoughts on “Commentators

  1. Denis Connolly

    This is complete rubbish and most of what these guys write is garbage on a grand scale, of course one would not expect ms Carey to say anything else. We are in the midst of the most serious international financial crisis which has ever arisen : let us be careful in what we say and do and show a little support for those who are trying to sort things out at home and in other countries. If we depend of Mssrs Lee, Keenan, Ross and co. we are lost and without hope. There is hope despite ms Careys apparent desire for a doomsday scenario : we must nurture that hope and support those who promote it

  2. Electron

    Denis, oh yes, blame it all on the international financial crisis – I suppose it’s responsible for our revenue black hole as well – you’re a true blue FF illusionist. Thanks to your leader “Bertie the Great” and his quest for everlasting glory, we are now in Famine country once again. 1848 was brought about by a set of circumstances that were beyond native control, but 2008 was brought about by the ff fifth column, under the guidance of their visionary leader and his cohorts. There is a striking parallel between the two disasters, both happened as a result of over reliance on single sources – potatoes in first instance and houses in the second – the classic eggs in one basket model.
    Only a clown would have fallen for it, risk management how are you! and the ff faithful, as expected, are in full denial. Poor old Ireland, she didn’t deserve this and especially from some of its own.

  3. B

    Hear hear.

    If you go in the front door of a bank and hold it up you get 25 years for armed robbery but if you rob all the banks together you get”nurture and support”

    This is the biggest robbery in history and the fraud was committed druing the boom not right now. This is only the resulting phase and the chickens coming home to roost.

    The delusion has to remain for the FF faithful as the reality is too horrific and uncontrollable for them and their conservative minds to bear.

    We are SCREWED.

  4. graham

    The problems in the Irish financial system are not solely the fault of the banking sector here. They are not blameless, but the current crisis is a result of a series of conspiring circumstances.

    The situation here could probably have continued as it was. The banks were already getting a little more cautious in their lending habits (though only a little). When the supply of cheap money began to dry up they suddenly had a big problem on their hands. To say that the global financial crisis has nothing to do with it is just ridiculous.

    We may be on an island but our banks certainly are not. And note that it is not only Irish banks that are in trouble. I still don’t think we should put money into them, it is there mess afterall but our way of life is very much tied into the system, so if you want to let the banks fail on a grand scale be prepared to give up your way of life as it is now.

  5. Fergus O'Rourke

    I agree with Graham, except that I see the banks being a *lot* more cautious.

    What’s going to be interesting is to see whether “we” can cope with the caution. Very few people have got it straight in their heads whether the need is for it to be easier or more difficult to get bank finance.

  6. Andrew Lawlor

    One of the main reasons for this current crisis is undoubtedly the global financial meltdown. I fail to see how people can say that it is entirely the fault of Fianna Fáil when just up the road, so to speak, an entire country of 300,000 people has gone into receivership.

    However, the profligate policies of successive Fianna Fáil administrations has made the situation in Ireland far, far worse than it needs to be. The banks messed up big time by their wholly irrisponsible lending practices, both to private homeowners and developers. The banks however will always do this in a time of growth idf they are not regulated by government. Anyone with half abrain knew that the over reliance on housing generated taxesm could not continue. Many,many economists have warned for years that there was going to be a hangover of moumental proportions whenit all ended, but the government ignoreed this and chose to believe those who were delivering the four most dangerous words in business. I first heard these in Soth East England in the late eighties – ‘This time it’s different’ For some reason the irish boom was going to be different to every other property bubble the world has ever seen. Even as the house-price crash was beginning those with a vested interest in keeping the train on the tracks as long as possible, estate agents, mortgage lenders etc. were on radio and TV telling us what a soft landing we would have and how disatrous it would be if we all stopped buying houses.

    Where was the goverment in all of this? The exchequer was pulling in up to €8bn a year from property sales and so Fianna Fál kept feeding the monster with massive tax breaks for the building industry. Meanwhile they treated the national coffers as their own personal election war-chest. The oner 70s medical cards before the 2002 election has been cited in recent days as a massive vote buying exercise, but the SSIA scheme was the mother of all electoral bribes. For ten years Fianna Fáil ministers simply threw money at any problem until it went away. E-Voting and P-Pars are perfect examples of this spendthrift culture which infected the top echelons of government.

    Now the party is over and the headache is worse than anyone ever remembersthat headaches could be and when we look for a couple of Solphadiene we find them locked away in something called the Pension Reserve Fund for headaches of the future. The only piece of forward thinking this Fianna Fáil led government has done has been to make the taxpayers of today contribute to the pensions of the taxpayers of tomorrow. To do this while not levying anything like enough taxation to pay for the public services and the pensons of today’s taxpayer is utter madness.

    Not once has a senior minister admitted that the government is in any way culpable for the current crisis. As far as they are concerned they were doing a fantastic job managing the economy when we were suddenly hit by a financial hurricane, and as you know, even Fianna Fáil cannot control the weather.

  7. Pete

    I’m surprised that these commentators have resisted the temptation to write articles simply entitled ” I Told You So! “.

    The international crisis was caused by bad banking practices, which the Irish banks did participate in, so we can’t completely wash our hands of responsibility there, although we are a drop in the financial ocean.

    But the Irish fiscal crisis is totally homegrow, and was 100% predictable. Making long-term public spending commitments and tax cuts based on what any 1st year economics student (or anyone with common sense) knew was a temporary revenue stream was childishly stupid and irresponsible. The one-off windfall should have been used for one-off expenses, like building infrastructure or paying off debt.

  8. Gerry

    i watched McWilliams programme when he went on about Deckland etc. name escapes.

    His analysis at the time was that the irish credit boom was the result of German savings. He even filmed ‘typical’ Germans being fiscally prudent at home. This was the core tenet of his analysis. He was ignorant of, or misunderstood the obvious junk borrowing markets that were based on complex derivative tools and were an effective house of cards. The Irish credit boom had no grounding in German prudence. None.

    his prediction for the collapse of this was if some day the Germans moved from a saving market to a lending one. This was utterly wrong.

    As a commentator, economist and whatever other hat he wears he has basically zero credibility.. It’s OK to guess wrong. It is not Ok to misunderstand the ground you cover and then expect to be taken seriously again.

    There is a lack of seriousness in Irish commentators. They are punters with a pen most of the time with no specific knowledge or insight. Mc Williams, some time ago , had a proper job and now we are supposed to give credence to his analysis. Why?

  9. Electron


    The Irish Credit Boom was fuelled through easy access to German Savings by our Banks – they simply borrowed and borrowed to lend to the property market and didn’t rely on their deposit base as was the norm. in times gone bye. Their exposure to such risky debt has only compounded their problems in the current global crisis and consequently, they’ve been severely punished by the markets. Dodgy derivatives doesn’t appear to be responsible for their woes – it’s just their stupid lending practices encouraged by the government for short term revenue gains , but wait for it – long term public sector expansion – two brain cells couldn’t possibly come up with such an imbalance – Mac did call it right from the beginning and now all that the government can come up with is patriotism.

  10. jane nuts

    It was their investment to lending ratio that persecuted the Irish banks,
    Thats what risk taking is all about , and banks are after all in the business of risk taking – albeit if they are supposed to do it more prudently.
    Its also what the entrepreneurial spirit is about, and surely that is what drove the economy along at such a hectic pace.

    But yes I do agree we should put shoulder to wheel on this one .
    Many of us have had the opportunity to invest in property abroad on foot of generous interest rates.
    That was also a result of our entrepreneurship ; And I regret it not one whit. It was OUR money.

    If there is begrudgery because some of us did reasonably well from the good years – well that’s just typically Irish;
    Let us all share the burdon together now,; Thats what Brian Lenihan means when he calls us to National Duty.

  11. Pete

    McWilliams grasp of economics and markets is actually very good, and this was reflected in his writing up to a few years ago. But when he changed career tack from serious economic journalist to celebrity it all went horribly wrong. The dumbing-down and simplifications were outrageous, and the TV programs in particular were unwatchable (based on the 15 mins I forced myself to watch). I think he was aiming for Eddie Hobb’s target market. Very sad. Still, I expect he made lots of money out of it.

    Saying “the irish credit boom was the result of German savings” was one of those gross simplifications. The Irish credit boom was certainly based on our banks borrowing money on the worldwide wholesale markets, and this money did ultimately come from people who had saved it. Some of these savers were no doubt German, but others came from all over the world. The geographical location of the savers didn’t matter. What mattered was that market conditions changed and the wholesale markets stopped lending to us. End of boom.
    The fact that market conditions would eventually change was predictable. McWilliams guess about what would cause markets conditions to change was wrong, but his core point was correct: we cannot keep getting further and futher into debt forever. If we don’t stop ourselves, the markets will do it for us.

  12. Electron

    Jane, entrepreneurship is about real risk and not about buying houses – remember the term “ as safe as houses”. That’s the problem with the Irish, they don’t know the difference and FF always homes in on this ignorance and offers this illusion time and time again, but it’s risk taking with a cushion. The property business is all about value appreciation and unless it’s on a fault line, it’ll rarely loose value over a long period – that’s not real risk, that’s a risk adverse man’s approach to making money and then, when every fool gets in on the act, the massive accumulation of money for nothing wipes out all real value in the economy and the whole house of cards comes tumbling down – it only goes to prove, once again, that there is no such thing as a free lunch.
    The problem that most of us real entrepreneurs have with Brian and his scheme, is that we’re being asked to foot the bill for these reckless idiot’s cushions.
    Using tax payers money to enable first time buyers to purchase or build new houses is only propping up an inflated market in order to give the banks a floor for their capital base – it also, lets the builders of the hook. So FF and their risk adverse friends are simply pulling a fast one.

  13. Gerry


    Teh topic is commentators, not went wrong. McWilliams purports to tell us that he is an expert on matters fiscal. Yet simplified or not, the credit boom was based on reckless borrowing on a global market based on multiples of base assets. Only was it very remotely related to German savings.

    But more pertinently he was the seeds of destruction only in the Germans changing habits and borrowing themselves. This had nothing to do with the collapse either and was never likely to.

    so I am not really going to listen to what happens next from him.

  14. Blondie

    I switched off McWilliams long ago when I heard him compare the Irish middle class to a push-up bra.. or something equally crass and stupid.

  15. Electron

    Gerry, I don’t know where they’ve borrowed from, but it would appear sensible to borrow from within the euro zone and it’s ,therefore, more than likely that it was from the Germans as they are/were the main savers in Europe, with their country having both a trade and budget surplus, all the others have been living the life for some time now. If they’ve borrowed dollars from any source in recent times, then they really screwed. So Mac is obviously giving them some credit, when he says that its German funds.

  16. b

    @jane nuts.

    If it was your own money why are the properties mortgaged and therefore appear on the balance sheet of the banks not your own. If it is OUR money why did you have to borrow?

    If it is an asset you can stop paying for it and nobody can reposess it.

    Building a business is different to “investing” in overseas property. One is being an entrepreneur and the other is following a trend and even the thick people can do that.

  17. jane nuts

    If my husband and I choose to have borrowed and had the good fortune to have bought properties at the right price , surely that is our just reward for our entrepreneurship.
    Its not necessaraly a business – but it could easliy become one.
    The property were ‘ high end’ value ans thus the risk was insignificant .
    We may choose to sell one or more of these properties ; call it an investment or whatever you wish.
    We may equally rent these and minimize mortgage interest.
    We had a choice ; we had some money ; there was an opportunity and we took it .
    Its called the free market..

  18. jane nuts

    I have had to look up the meaning of ‘troll’
    – ”a Scandinavian giant of dwarf”- Collins English.
    Is there some other pejorative meaning to the term in your lexicon ?

    I simply believe that a free market is co-terminus with liberty and democracy
    an open economy where people with the gusto to advance themselves is not only consistent with the very essence of democracy . it is the very expression of democracy,
    And Yes! Mr. b. – I do employ people !
    We engage a Polish gander and two very efficienct girls to do the house work . whom we pay above the minimum wage !!
    They seem quite happy to be working for a troll!!
    How dare you !

  19. Paul Hunter

    I agree with Pete when he says that David McWilliams has dumbed down his commentary of recent times. His most recent offering is high on theatricality and sadly lacking in his usual insightful commentary. I used to be a big fan of his but I won’t be for much longer if he carried on with this “Economics For Dummies” style of approach

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