Noel Whelan on the 46/Thoughts on Economists and the Law

Writing in today’s Irish Times, former Fianna Fail candidate Noel Whelan writes about the article signed this week by 46 academic economists.

Whelan criticises:

the limited and broad-brush nature of their contribution. One might have thought that such a group giving the public the benefit of its expertise could have done so in a more substantial manner than merely affixing their names to what is in effect a lengthy letter.

At this time of national economic crisis one might have wished that these 46 academics had applied their trained minds to jointly publishing an agreed and comprehensive treatise on the state of our banking system, the prognosis for our property sector and/or our general economic circumstances.

At a minimum they could have given us a detailed commentary on the legislation as published with proposals for specific amendments to enhance its workings rather than. If they were not prepared to engage at all with the Nama proposal then perhaps they could have given us an agreed, worked out and detailed alternative proposal. They could also have assisted the debate by giving us a full assessment of the Labour Party’s nationalisation proposal as against Fine Gael “good bank” option.

Whelan labels the article “curious”. Equally, however, I find it curious that someone who writes a weekly op-ed column—and hence knows that these articles need to be about 1000 words—would then criticise such a piece for not being a detailed commentary on a long piece of legislation, knowing that such a commentary simply could not be fitted into that particular format.

Furthermore, Whelan’s criticism that the 46 did not get together to publish an “agreed treatise” on life, the universe and everything is also quite strange. Pretty clearly, the 46 did not get together in a room to write this document. Rather, they agreed to add their name to a circulated letter. To get any kind of broad support, petitions of this sort need to be short and to the point, which I’m pretty sure Mr. Whelan understands.

But, look, this is standard tit-for-tat stuff, the kind you expect from political partisans writing for weekend newspapers, and that’s not why I’m writing this post.  I think there’s a broader point worth discussing here.

Mr. Whelan is a barrister and I think it is perhaps understandable that someone from a legal background may think that the way to comment on a proposed policy is to put forward “proposals for specific amendments to enhance its workings”. Indeed, this isn’t the first time I’ve heard this idea, as it has also been put forward a number of times on this site by commenter Veronica.

Since this appears to be a source of contention, perhaps I might try to be constructive here and explain, from the point of view of an economist, how I see our role in commenting on public policy.

Let’s start with an obvious statement: Economists are not lawyers. This matters greatly when thinking about policy process because the process usually works something like this. Economists may put forward a policy proposal. If the government likes the proposal, then the legal people go to work constructing a bill that implements it and this process is often a long and complicated one.

To give a concrete example, an economist may review a particular industry, conclude that it is uncompetitive and recommend the establishment of a regulator to control prices. The economist’s proposal may take the form of a short report, outlining roughly what is to be regulated and explaining the perceived costs and benefits of the proposed approach. However, after the delivery of this short report, the legislation to implement such a proposal would most likely be highly complex, connecting the new legislation with existing law, dealing with various issues involved in establishing the statutory basis for new bodies, the legal limits to their powers, their relationship to existing arms of government, and so on.

Continuing with the example, when other economists would come to debate this policy proposal they would focus on the economics of the policy, not the legalities. So they would debate the competitive structure of this industry and the particular form of the regulation proposed. Debating whether Section 24, sub-clause (c) suggests a loophole of some sort is not what we would call our comparative advantage.

Which brings us to the draft NAMA legislation. Yes, the draft bill runs to 136 pages, so in that sense it is indeed a complex piece of legislation. However, the economics of the bill can be summarised in one sentence: The bill proposes to use bonds issued by the Irish government to purchase a large amount of assets, mainly loans backed by property, from the Irish banks, paying a price determined by what it calls “long-term economic value”.

From this economist’s perspective, the crucial aspects of the NAMA bill are (a) Sections 58 and 59, which define long-term economic value in a highly unsatisfactory ambiguous fashion and (b) The complete absence of any clause protecting the taxpayer from losses that may be incurred from purchasing these assets.  These aspects render the bill extremely unsatisfactory and have attracted most of the attention from economists.

There are other aspects of the draft legislation that are unsatisfactory but the crucial economic questions are how much we will pay for these assets and what mechanisms are in place to protect the taxpayer. The 46 economists piece gets to the heart of these crucial issues and, as such, provides an important contribution to the public debate.

To suggest, as Mr. Whelan does, that the only acceptable way for economists to “engage with the NAMA proposal” is through the provision of a section-by-section discussion of legislation—proposing “amendments to enhance its workings”—is to misunderstand what economists do, and what they don’t do.

Whelan also criticises the piece for not giving “an agreed, worked out and detailed proposal.” Again, if he is expecting lengthy draft legislation, he is looking for it from the wrong people. But the 46 economist piece does make it clear that a large number of alternative proposals have been put forward and, in my opinion, it does a good job of distilling the common elements of these proposals.

And rather than focus narrowly on the question of tranferring bad assets, these proposals, for instance plans such as the one I offered here, have generally focused on resolving our banking problems in a systematic fashion rather than piecemeal approach offered by the NAMA bill.

As a final thought, I genuinely wonder which statements in the 46 economist piece Mr. Whelan considers to be “repetition of vague political charges.” I have looked through the piece again and can’t find anything in it that would correspond to that characterisation, nor would I have been willing to sign it if that was the case.

73 replies on “Noel Whelan on the 46/Thoughts on Economists and the Law”

@Karl Whelan

I take it that you are not related to Noel?

More seriously, and as discussed by Garrett Fitzgerald today, one of the three issues brought up by the “gang” of 46 lecturers is the supposed lack of transparency surrounding NAMA. After having a quick look through the draft, I count at least 30 sections that address the transparency question (I do have legal training, I must admit). Where exactly does the Bill up come short on that issue, in your opinion?

Noel Whelan is a partisan commentator who invariably writes in support of FF policies – nothing new there.

It seems to me that Whelan’s article is all spin. If he checked blogs like this, and many others, he would see that a plethora of alternative proposals, and potential amendments to the existing bill, have been suggested by economists.

I think in comparing the NAMA debate to Lisbon 1, Whelan is implicitly suggesting that those on the “anti-Nama” side of the debate are succeeding in swaying public opinion and informing public debate on the issue.

Speaking at the Fleadh Cheol last week, the Taoiseach said the government published the draft NAMA bill as it wanted to encourage debate but the contribution to that debate, from the government’s own members, has been negligible.

If Mr Cowen and his cabinet feel so strongly about the benefits of NAMA, why are they so slow to come out and defend it publicly?

At the beginning of his article, Whelan says: “The debate is made all the more difficult because, like the situation prevailing during the first Lisbon debate, basic information about the Nama proposal has not been laid out.”

This is the fault of the government.

I wonder do Karl, Brian Lucey, etc, regret getting involved in this political issue? They seem to have gotten, as my mother would say, nothing but grief for it.

Noel Whelan’s article is unfair in the way that it defines narrowly what is acceptable (to him) debate – either produce amendments or produce your own bill. In other words, if you’re playing the game you have to play it his way.

I’m pretty sure I have seen a suggested alteration to NAMA, as well as alternative proposals, on this blog. So to imply that the economists are only giving negative criticism without coming up with suggestions of their own is misleading.

Regretfully, given the strong defence of NAMA that has been rolled out in the press over the last week or so, I’m pretty sure the govt is not for turning on it.

Garrett Fitzgerald’s article on the same page in the IT on Lisbon, NAMA,46 signatories and Fine Gael is also very interesting and a very frank and honest assessment of the current situation where everyone seems to be playing politics with our economy. When I was in University the subject of economics was known as “Political Economy” and that seems to be where it is at now.

As a barrister and an economist (sort-of, anyway), I can tell you that Noel Whelan’s stance is not excused by his legal training ! However, while he is, like all of us, influenced by his background, I think that it is unfair to suggest that his views can be “explained-away” as purely partisan witterings. Sometimes, they do approach that; but not always by any means.

Returning to the question of transparency, it has come to my attention that Karl Whelan is the moderator of this web site. This came to my attention because Mr. Whelan deleted part of my previous post that he did not like. In my opinion, this runs contrary to nemo debet esse iudex in propria causa.

I find this very disturbing. It puts this web site in a completely new light.

Do any of the 46 lecturers who signed Brian Lucey’s letter use the codename “bodyofevidence”?

“If you have the facts on your side, pound the facts. If you have the law on your side, pound the law. If you have neither on your side, pound the table.”

Noel Whelan is pounding the table in the Irish Times today

“While academics have the luxury of always questioning, debating and redebating, ultimately the decisions about Nama must be made in the political realm.”

And we all know that Fianna Fail TD’s and Jackie Healy-Rae are “always questioning, debating and redebating” all areas of government policy and vote as well informed representatives of the citizens of Ireland. Even when that are whipped through the lobbies to pass Bills using the guillotine.

Sally Anne seems to be doing a little bit of pounding the table as well.


“When I was in University the subject of economics was known as “Political Economy” and that seems to be where it is at now.”

That’s as it should be. Throw in a little bit of history, ethics, sociology, psychology, etc and we might understand how economies function and have a real debate as Michael D Higgins wrote recently “on the forms of economy that might serve a genuine citizenship, with intergenerational justice and an inclusive society.”

In the interest of fairness, I have usually enjoyed and been impressed with Noel Whelan’s contributions to political TV, especially election coverage. Also, the Minister for Finance has been defending NAMA on TV and in the press. I just don’t think their arguments stand up.

@Sally Anne

I am not “the moderator” of this blog. Each comment thread is moderated by the person who wrote the original posting. As such, each of the contributors here can choose their own philosophy as regards moderation. As even a cursory look at the blog will reveal, the philosophy here has been to allow a full and free debate. And I have been particularly in favour of this approach. In particular, despite the implication of your comments, I have never deleted anything simply because it disagreed with my position.

However, consistent with the rules adopted by every moderated blog that I know of, I am not happy with people posting comments that are essentially innuendo about individual academics. It is for this reason that I deleted the relevant part of your post and informed you personally about this. You know that I did not do this because you had posted something that disagreed with me.

You have now posted a reformulated version of your question which I have allowed to stand, so others can judge the merits of the issue that vexes you.

And by the way, I really don’t have time for this kind of nonsense.

@Sally Anne
How exactly is your question relevant? As far as I can see there are plenty of people “spinning” on both sides and hiding behind codenames or first name anonymity.
You’re doing it yourself. Haven’t a clue who you are or where you’re coming from.
This site is allowing arguments from both sides which I appreciate. I agree that unnecessary insults and innuendo should be removed.
People should stick to arguing the facts, when they start attacking those making the arguments I get suspicious.

Careful too not to libel anyone which is again why sites are moderated. People should realise that anonymity does not prevent legal discovery by others of their real identity. It’s important too where people chose anonymity they do not use it to have a go at others nor question who others may be.

@ Karl
I could have been clearer!
I thought that the article in the IT sought to disparage economists.
Will post later on that


Very fair points made re Sally Anne, but am interested to know your answer to her question ontransparency. Don’t think this is close to the biggest NAMA issue but given it has been raised what is your view?

@Aidan C

Well said.

Maybe Noel Whelan thinks that as most of the 216 members of the Oireachtas having nothing to say on such an important issue as NAMA, is normal.

These are the low expectations we have.

Whelan has written for a non-web audience as if what is discussed online is irrelevant.

@John Cowan
Do I regret getting involved? No. Better to light one candle than to rail against the dark. That said, its instructive to see the vitriol that can be poured against one when one takes up the expressed offer of debate.

As to alternatives, indeed, Noel Whelan would learn a lot of alternatives from browing this blog, or Constantin’s . Only on Friday Constantin had a piece in the Indo ( . Think what one does of his analysis its worked out and backed up with more detail on his blog and notes.

Indeed. Political economy this is as Garret says. But we must make sure it doesn’t become politicised economy. On a point he made, the lack of prominent names. One shouldn’t take silence (in signing terms) as approval or disapproval of NAMA or anything else.

@Sally Anne
Whats that latin about? Don’t judge in your own cause? Im not a moderator but I would trust KW to do whatever he does on a professional manner unless proven otherwise. Might an email to him be better than a public debate? Just a thought….

As to the question, why not email me directly and ask? Its not that I am hard to find these or any other days. Not mind you that the question or any answer has any relevance that I can see to the forum we are now in. As Stuart B has said…..

Note for instance that post there refers to upcoming debates between Karl Deeter and Ruari Quinn.. Is the poster supposed to be either of them?

@Noel Whelan
A few other issues from the article that need clarifying I think.

“In many ways the article published on Tuesday was akin to the joint letter signed by several lawyers last month following the publication of the “gangland” legislation with the distinction that the former was signed by legal practitioners rather than legal academics and actually concerned itself with the content of the legislation at issue.” To me this seems a bit of a pop, akin to what Karl D (yes Karl, haven’t forgotten  ) had at me on Newtalk ; perhaps Noel Whelan thinks that (as KW has noted) economists and finance academics should not comment on issues of value, or perhaps he would rather that we got “stockbroker analysts for NAMA” to join in? In any case im getting rather tired of this, to my mind, false dichotomy that academic economists are somehow not competent or capable of making informed, or at least independent, judgements on issues whereas those that work “in the field” are so.

Noel also seems, as has been noted, to think that there is something politicised in what we are saying. Let me state that I am not a member of any political party. Accusations of political bias seem to come when independent analysis gives rise to policy prescriptions which ones own party rejects.

“it difficult to believe that all 46 had the opportunity to give it detailed consideration in the two weeks between its publication and the circulation of the draft article”…..and yet, I at least and I suspect most others that signed did so, evaluating the bill and surrounding documentation in enough detail to comment. As Karl has said, its really a few sections that are germane, and they merely confirmed in legalese what had already been flagged – the desire to overpay.

Mr Whelan 2.0 suggests that the group of 46 should develop a draft(s) amendment(s) to the legislation.

Nothwithstanding the criticisms of this approach above, would it not be possible for some of the possible alternatives to NAMA, such as NAMA 2.0, to be incorporated into the existing legislation by way of amendment?

Is there anybody who contributes to this website who could draft such an amendment? Perhaps a fromer member of the Office of the Parlimentary Counsel?

Maybe the best way to respond to the criticism, even if the criticism is unreasoanble, is to accept it and deal with it, and then move on rather then let the criticism derail or sidetrack the main issue.

I don’t know what “transparency” means in the Irish context, especially when it gets used as synonym for accountability. Ministers were transparently schmoozing with property developers in the famous “tint” but that knowledge didn’t have much effect on public policy. More concretely, the government has the power to disclose whatever it wants but still ram everything through the Dail once it comes to a vote. NAMA is a lot of power to hand to the Minister of Finance and the NTMA quango when the average TD gets more worked up about writing letters to county councils on behalf of constituents than commitments of billions of euro.

@Karl Whelan

This means that you are the moderator for almost every thread on the topic of NAMA, since hardly anyone posts orginal postings on this topic. Nama is on trial, and you are a strident advocate on one side. Now we discover that you are also the Judge on these threads. It is a basic principle of jurisprudence that you can’t judge your own case. I would ask you then to change the rules of moderation so that you are no longer permitted to delete comments about Nama with which you don’t agree.

@Stuart Blythman

The letter by 46 lecturers complained about the lack of transparency surrounding Nama. I am asking for transparency and natural justice on all sides.

@Pa Bandit

My concerns re transparency relate to the fact that, as far as I can see from teh legislation, we may never know what was paid for what loans. Now, with taxpayers money, thats not good enough. The argument against is “commercial sensitivity”, to which my answer is “dont go bust…”.

There is also a very significant amount of control given to the minister in the draft legislation which IMHO should be given to something analogous to a supervisory board, which should incorporate taxpayers, as well as academics, practitioners and so on NONE of whom should be intimate with the irish scene (apart from the taxpayers…). For instance, and to pick a name at not quite at random, Simon Stevenson at Cass Business School is Professor of Real Estate Economics, he knows Ireland well, he is probably the leading researcher worldwide on RE Econ etc. He would be a great guy to play a part as he is “clean” . Ditto for a property developer, a banker etc. Find the best internationally and have them oversee NAMA.

NAMA should be examined by the Oireachtas every quarter at least, with full forensic disclosure of its actions, profits, losses and derivative positions.

Remove issues such as “thou shall not do a Somers” and “the minister can override the valuation board” etc.

@Sally Ann
KW isnt a “strident advocate on one side” no more than am I or indeed no more than “NAMA is on trial”.
This isnt a politica debate we are having here, less again a politicisied debate. KW and I and I hope others are talking and thinking and acting to see what is the best way (perhaps within NAMA perhaps without) to clean the banking system, not stiff the taxpayer, mitigate moral hazard, keep lines of credit flowing nationally and internationally etc.
I am open to persuasion that NAMA as currently trailed can work to best advantage on these headings, as I am sure is KW. So far, my mind has been changed on the feasibility (jury internally still out on desirability) of getting senior bondholders to cough up something, and if cogent well argued cases are makable for other issues with which I and others disagree I am sure we will change our minds, or at least hold alternatives.

@Brian Lucey

“I am open to persuasion”. Oh, please. You have long since passed the point of no return on this issue. I did not come down in the last shower. Nor, evidently, did Noel Whelan.

@Sally Anne
Thats wrong, unfair and perhaps close to calling me unprofessional. So id rather that you didnt say same.

The life blood of an academic is to debate and that implies willingness to change ones mind in the face of evidence or argument. As I have said look chronologically at my posts and you will, if you can be bothered, note a change in my attitude towards senior bond holders. Thats a black swan to your hypothesis.

As to persuasion – try me. Give me a good reason, that hasnt been debated to death, why paying a multiple of the current market value for the loans is a good idea.

@ Sally Anne
Can you please plead your case as an individual?
When you say ‘we’, let me state clearly that I do not wish to be included!
I could ask you to identify who you mean by ‘we’ but I dont want to waste your time…
Like your trying to waste Karls…


Can we (includign me, sally anne and al..) get back on topic now and start analysing Noel W’s article again?

@ Noel Whelan

The 5 step solution!
Lets break this down:

1 Identify problem group, welcome their efforts:

“Their decision to contribute to the debate is of itself welcome.”

2 Characterise their efforts as misguided:

“What is surprising, however, is the limited and broad-brush nature of their contribution.”

“one might have wished that these 46 academics had applied their trained minds to jointly publishing an agreed and comprehensive treatise on the state of our banking system, the prognosis for our property sector and/or our general economic circumstances.”

“Mary Robinson in a wider context last weekend seem apt when she said “just as it is a truism to say that the law is too important to be left to the lawyers, so the problems facing Ireland are too important to be left to the economists”.

3 Create impression that they let us down:

“At a minimum they could have given us a detailed commentary on the legislation as published with proposals for specific amendments to enhance its workings rather than. If they were not prepared to engage at all with the Nama proposal then perhaps they could have given us an agreed, worked out and detailed alternative proposal.”

4 Identify them with some other failed cause:

“In many ways the article published on Tuesday was akin to the joint letter signed by several lawyers last month following the publication of the “gangland” legislation with the distinction that the former was signed by legal practitioners rather than legal academics and actually concerned itself with the content of the legislation at issue.”

5 Identify them as failed:

“The Nama legislation on which the 46 chose to comment is of course lengthier and more complex, which makes it difficult to believe that all 46 had the opportunity to give it detailed consideration in the two weeks between its publication and the circulation of the draft article. That may be why much of the article instead of being a detailed economic analysis was merely a repetition of the vague political charges which have become the staple output of its original author.”

Did I get it wrong?
Might take up this writing thing meself!
Is the money good?


@Sally Anne

This is the last time that I will respond to you. And to maintain the reputation that this blog has as a forum for reasonable discussion as opposed to spear throwing, any contributions that attack my integrity or that of anyone else associated with the blog will be deleted. You won’t like it but trolls everywhere don’t like being moderated.

To summarise the situation:

1. You would like that I be “no longer permitted to delete comments about Nama with which you don’t agree.” As I think everyone reading now knows, your comment was not “about NAMA”. And I cannot recall deleting a single comment that was “about NAMA”. I only delete comments that engage in unnecessary personal insult or innuendo.

2. I do not set the rule for how comments on this blog are moderated. The blog was set up by Philip Lane and it uses software that is set up that way. Nothing to do with me. Take it up with Philip Lane if you want and see how much interest he has in it.

3. I am not the only person that has blogged here on NAMA. The absence of pro-NAMA bloggers on this site has got nothing to do with me. I suspect it has more to do with the merits of the policy proposals.

To be honest, if I have to spend any more of my time on this kind of rubbish, I will just quit this site and set up my own comment-free blog. I repeat, I simply don’t have time for this.

So, you won’t be hearing from me again. Find someone else to insult.

On the issue of moderation perhaps I can lend some perspective. When you write a blog, its the equivalent of opening the front door of your house and saying “Come on in – we’re having a chat!” The blogger is the host and the people who come into talk have to obey house rules. The blogger sets the rules and if anyone breaks the rules she/he can ask them to leave. If you don’t like the rules, then don’t come in. There are no sacred rules inherent to all blogs. Karl, or any other writers of any other posts, have the right to moderate those posts any way they see fit. Usually, the rules are pretty loose but if anyone crosses a line in terms of hostility, rudeness, sly implication or outright libel, then the blogger can delete or edit as appropriate.

In other words, ‘Sally Anne” [the nerve of a pseudonymous poster creating a conspiracy theory about another pseudonymous poster!] can stick it.

I learned a lot through making big mistakes on my own blog where comments got out of hand – my advice to Karl and anyone else now – delete at will. Err on the side of caution. If anyone gets out of line – delete and don’t apologise. Civilised conversation only here.

@Sally Anne

As Stuart Blythman has pointed out, this web-site is a forum for debate and discussion in which the identity of those who initiate threads are clear. It is not a court in which legally binding decisions are made – by anyone. IMO, those who set up this site are relying on common courtesies being observed by the rest of us – not jurisprudence or even court quality-evidence.

If KW let you know that he was deleting something from your post, it seems to me that he observed common courtesy – something that newspapers staffs do not do when editing letters to the editor.

IMO, there should be a lot of debate about NAMA – not because it is being introduced by a FF-led government. Such debate is needed because of the causes which have given rise to the issues that NAMA is to deal with and also because of the implications of the proposed legislation – I mean the implications for all those who wish to live and work in this Republic, regardless of political belief or voting tendency or party membership or wehther we are economists, lawyers, nurses, teachers, refuse disposal people etc.

Thus the proposed NAMA legislation needs to be thoroughly discussed. Such debate is a form of stress testing the NAMA bill – something I would have expected lawyers to be familiar with, judging by how cross-examinations take place in courts and tribunals.

Had stress testing been done on the banks earlier by the powers-that-be, would NAMA be needed now?

Let the debate and analysis on NAMA continue, because we need as much clarity, on the options we face, as possible. Even the Minister seems to be open to considering changes.

As Brad DeLong says, a blog’s comments should be patterned on “a seminar, not a food fight”. I completely agree with Sarah’s idea for deletion of inappropriate commenters. In fairness though, it’s not that big an issue here. One or two trolls on a blog getting 2,000 visits or more a day isn’t bad going at all.

Regarding transparency, this was one of the main reasons I signed the “46” letter. It is my understanding that, in the NAMA process, each individual loan would be valued, and a price decided upon for that individual loan. That individual price may never be known, and the individual process by which that price is arrived at won’t be disclosed, apparently for reasons of ‘commercial sensitivity’, see here: (, relevant section is 88(4), pg. 71-72, I believe.

While the commercial sensitivity argument is pressing, given the scale of the problem, personally I don’t feel commercial sensitivity is a good enough reason to keep the *actual* process a secret.

It might seem a little much, but I’m sure Colm McCarthy wouldn’t mind us buying a webcam and sticking it on the wall of the room these loan valuations are decided in!

I agree with Sarah Carey. It does not happen very often, but there you are ! (Normal service soon to be resumed, Sarah: watch your e-mail & I do not promise to wait until after THE match !)

For a blog like this, especially, it seems to me that there is a lot to be said for requiring commenters to discard anonymity. Liam Delaney, please note.

As for Sally Anne’s point on nemo iudex in causa sua: you bring the sacred cause of preserving the hugely beneficial (IMHO) usage of such Latinisms into disrepute by the mis-use of the term in this context you have perpetrated. If you want to rant at will, there are plenty of fora available; the owners of this one owe you no duty of hospitality any more, if at all.

Finally, on reflection, I was too fair to Noel Whelan: his piece is the most arrant nonsense – or is that the vin rouge talking ? 🙂

To perhaps, if I dare, return to the original posting. The point that Karl Whelan raises in relation to the Noel Whelan article regarding how and what economists in academia can contribute is a vital one.

Not to inflate any ego here….I am stating what we know to be true based on output…but one thing that continues to amaze me is how you can have in Ireland (and as it happens on the payroll of the taxpayer) a set of economists whose academic careers have been very successfully devoted to studying the core issues that underpin the banking problems (or indeed any other problem faced by policymakers), but effectively choose to ignore them when developing policy.

I am confident that in many other countries such expertise in the University sector is directly engaged in the framing of policy responses to NAMAesque issues. My experience is that during the ‘Green Paper’ period of a bill it is routine, except in Ireland, to haul in folks who know the topic so the policymakers can grill the bejaysus out of them to get the maximum input for minimal cost. And that process would not be limited to locals – you would get, I am sure, positive responses if as Minister for Finance here you picked up the phone and called Professor X in, say, Harvard and said ‘any chance you could help here, we have a big problem and we need the smartest solution possible to get out of it’.

Of course, policymakers have to then go and make the policy, and write the bills, but if the expertise available was involved nobody could complain that the decision was not based on the best available evidence (of course, policymakers can ignore the expertise, but should also be reasonably required to say why they ignore it).

We are doing nothing like this here and are ‘politicising’ what is not a political issue, i.e. the views of the academic sector. I am really uncomfortable how the Government Ministers are now starting to spit out “academic economists” as a dirty phrase. There is a sense now that by not having this dialogue, and by having to use other mechanisms (this blog, the ’46’ op-ed etc) to give voice to their views, the academic economists end up pitted against, rather than engaged with, the process.

Noel Whelan also uses the old chestnut of asking why we suddenly are interested in commenting, why now? Well, for a start this is not a minor issue so if we are going to start, this seems a pretty good place! But more importantly, he is just plain wrong – there are many examples of commentary during the boom periods that was critical of the decisions being made, and many examples of work by academic economists being routinely ignored in favour of political decisions (Colm McCarthy was not the first to coin this policy-based evidence instead of evidence-based policy!). There is a lot of research output – academic and applied – which questioned directly the policy directions being taken. A personal example – Bacon Report Three had an econometric analysis of the market which I co-wrote, which explicitly said we were in the land of the unexplainable when it came to prices, and how the potential was that we would overshoot on the way down in the same way that we overshot on the way up. That was ignored, as indeed was a lot of what the Bacon Report actually said to do (such as dealing with tax incentives, not stoking them).

Sometimes policymakers hear what they want to hear – and when something as stark as the ’46’ letter hits the debate the hedgehog just rolls up and shows his spines. That letter, this blog – the supply side of academic economists is showing that they want to be involved. And they do so not for advocacy – all of the commentary is rooted in linking the best available academic evidence to what is known about the Irish situation. They could perhaps do more to translate their thinking and their own research fields for the policy community (and this blog, in its original inception, was a move in that direction of enormous importance as a translation of a public good – research in economics). But equally the demand side – policy, media – needs to start to engage with that expertise and do so at the right part of the policy formation cycle.

In the debate also playing out on this blog about research funding, the analogous output to patents for economics might be viewed as policy. The ’46’ piece ended by respectfully asking that this process be cracked open again – I am sure I am not wrong in saying that nobody from the academic community prefers to be talking about this stuff on the pages of the Irish Times instead of inside the Department of Finance.

A final note – the personal stuff about contributors is really nauseating. The time and effort, and depth of analysis, of the key contributors to this blog is not matched anywhere else that I have seen. Anybody who thinks that there is some conspiracy behind the motivations of the key folks is really only demonstrating that we may never learn from the recent experiences when it comes to the formation of economic policy in the future.

@Sally Ann
To go back off-topic again.

I am a moderator on thepropertypin that you seem to read so avidly. Perhaps you would care to tell me the username you post under?

Or perhaps not. As you probably know from reading the posting guidelines on thepropertypin, we don’t generally allow people to identify themselves or promote themselves through their anonymous postings. Some exceptions are made, but only after long debate amongst the moderators. It is ever thus on a discussion forum. This, however, is not a discussion forum. It is a blog that, rather graciously in my opinion, permits comments. Even more graciously, the authors on the blog respond to comments, not just on their own creations, but on other’s.

As for anonymity on thepropertypin, some people make themselves easy to identify, others do not. We respect their choices.

@Sally Anne
PS sorry for dropping your E in the previous post. As zhou says, a horse for the first developer to provide a time-limited edit function.

I don’t think economists on this site should be too upset by a former Fianna Fail candidate who is coming out, or has been sent out, to bat for FF.

One of the patterns emerging, going into September is that, rather than dispute or debate the cogent arguments that have been made about NAMA the government have decided instead to embark on a campaign of disinformation and political mud slinging as evidenced by the recent attacks on the FG shadow finance spokesperson. In the case of the ’46’ they have used the tactic of trying to discredit people rather than engaging in debate. Ordinary people can see this tactic a mile off.

Overall, it appears the government is becoming quite desperate and disorientated. Remember, this is not just politicians versus economists. FF and the Greens are fighting, not just for NAMA but rather for their political lives.

I urge, all the economists on this site, not be deflected at this critical juncture, by people like Mr. Noel Whelan or anybody else from pressing on with their detailed analysis, if not autopsy of the bullet riddled NAMA corpse.

Noel Whelan’s article was a laugh. I wonder how many take him seriously as a pundit. Even a prole like me can see through the tosh that he spouts. I often wonder why the Irish Times don’t let the readers know that this guy was a former Fianna Fail election candidate and party worker.

If that article is all the support that proponents of NaMa can muster, it seems to be a dead duck.

But the issue is too important to be left to wither of its own accord.

If you go only to the newspapers on any issue of national importance, the main effect of your intervention is to stoke up public and political controversy. In the blink of an eye, the point of your intervention and the merits of your core argument may get lost.

In the media, the issue is immediately personalised, and transformed into a ‘Clash of the Titans’ (Please note, Karl, I’m staying away from any schoolboy analogies, for fear of causing offence, which was never intended anyway in any of my previous posts!) and the debate proceeds on this level. It ends up, as with several of the comments made on this thread, in labelling and namecalling and people misunderstanding one another, which really doesn’t advance the substance of any issue very far.

It’s practically unprecedented for any government in this country to publish a Bill and put it out for public consultation. But once that happened with the Nama draft Bill – and to this extent only am I on the same page as Noel Whelan, since our policy stances on most issues would be diametrically opposed – there was an expectation at government level that opposition to or comments on the proposed policy would, in the first instance, take the form of statements and submissions that suggest amendment or clarification of particular sections. Or put forward an argument as to why the entire Bill should be scrapped in favour of an alternative policy. Once that has been done, it’s fair enough for any group or individual to promote the core points of their submission in op-eds in every outlet that will take them. For example, if I recall correctly, in Richard Bruton’s article on FG’s ‘good bank’ proposal in last week’s Irish Times, he mentioned that FG have made a submission to government on their preferred solution?

Let’s put ourselves in the shoes of the Minister for a moment : advice was sought from an economist on a technical solution to the banks’ toxic assets; a proposal was made, accepted by the government, and a policy based on that proposal was developed, published and put out for public consultation, in the form of draft legislation, with a commitment to take on board ideas and suggestions that will make the thing work.

The expectation clearly is that experts and others with appropriate expertise would respond to the public consultation and make their views known through that process. The ultimate decision on the policy to be pursued is the Minister’s responsibility – that’s his job after all – but the very fact of putting the legislation out for public consultation obliges him to evaluate any responses that are received through that process.

Unfortunately, the same does not apply to concerns aired primarily through newspaper columns. And since, like the rest of us, the Minister is only human, irritation and dismissal of those concerns, however well-founded the concerns themselves may be, is the most likely reaction of someone who feels their offer of consultation through formal channels has been spurned. That’s my charitable interpreation anyway – groupthink is the curse of every government and political organisation!

Nama is not a popular solution as it’s too easily represented as a bailout for banks and developers at the expense of the taxpayer. As Matt Cooper has persuasively argued in his Sunday Times column today, nationalisation of the banks is a far more attractive option from FF’s political perspective. No politician in his right mind would touch Nama with a bargepole if he felt there was a more workable alternative available. In fairness, the Minister has never ruled out nationalisation of the main banks either; but for a number of reasons, many of which have been also aired by other posters on this site, has taken the view that nationalisation should be a last option.

That is why, once the legislation was published in the way that it was, I advocated that amendments and policy alternatives should be put forward in a formal response to the draft Bill with the op-ed as a follow up, not leading the charge; a twin track strategy if you like. I know, Karl , that you don’t agree with me that this is the best strategy for you and your colleagues to advance your argument in the public domain and that’s fair enough. But I do think that there would have been less opportunity out there for anyone to question the motives or credibility of the arguments advanced in Professor Lucey’s letter if the cart hadn’t been put before the horse. And less scope for personalisation of what are, after all, largely technical issues about how the banks toxic assets can best be managed in the interests of the economy, society and minimising the costs to taxpayers.

My professional advice to anyone seeking it would be to make a submission to the Department of Finance on the legislation as published, setting out objections to the concept and preferred alternatives, and perhaps also to copy this to the Oireachtas Committee on Finance, in a letter addressed to the Chairman and copied to all members. After that, go at it hammer and tongs in the mainstream media, if that’s likely to advance acceptance of an alternative view.

The Finance Committee are meeting with the Minister next week and the better informed its members are of all the arguments and options, the more fruitful the exchange is likely to be. Further, the Committee might be persuaded to broaden their hearings to include other expert opinion before the Bill comes before the Oireachtas, which would be all to the greater good, in my opinion.

I make these points with the best of itnentions, no criticism should be inferred and, I hope, no offence taken.


This discussion on process is a waste of time.

The Minister and most of the Cabinet, went on holidays for about a month after the publication of the Bill.

In the interval, before this week’s letter, Karl Whelan and Patrick Honohan made proposals on the key issue of the controversy i.e the concept of long term value and protection of taxpayers’ interest.

It’s important to raise the issues in the media as it’s the main channel to getting policy makers to change their minds.

There is nothing stopping anyone from writing to the Dept or TDs.

On a general point, it’s interesting that people who are critical of using the media, can also assume because an individual who did not publicise views via the media, on the reckless mismanagement during the boom, was a cheerleader of it!


Legislators, or rather civil servants, draft legislation. Most commentators are not jurists. By asking for people to suggest amendments, you are asking for people to make juristic change suggestion. Does that mean that only jurists should comment?

The points of debate of the NAMA bill are, to my mind:
– is it a good idea in toto?
– are particular sections of it good ideas? (for example, to absolve NAMA officers from legal obligations relating to fraud)
– if there is a price to be paid for the loans, how much should be paid?
– is it transparent enough? Do we want to give the minister of finance and the DoF (of any party) such unfettered power with no oversight?
– what alternatives are there in principle?
– should there be a clawback and what mechanism should it take? (clawback or profit share).

Few of these questions are amenable to legislative amendment. They are all worthy subjects of debate. It is no exaggeration to say that NAMA is the single most important piece of financial legislation the state will enact. As currently proposed, it will increase the national debt by 33% of GDP. It is the equivalent of 30 years of budget increases (assuming a sustainable 3% growth in government income in a 2% inflation environment). I think we all have the right to add our tuppence.


No offense taken this time but, like Michael, I’m not sure we’re getting anywhere here.

You started your comments with “If you go only to the newspapers …”

Well, I can’t speak for the rest of the 46, but you know that I don’t “go only to the newspapers”. I have backed up my position on NAMA in a detailed fashion time and again on this blog. I have appeared on radio and TV to explain the issues as clearly as I can. I have also spoken with many politicians about the issue, including members who will be at the Oireachtas meeting on Monday. I have given a formal presentation to the Green Party and have agreed to do so again. And I appeared before that Commitee in March. Newspaper articles have only been a relatively small part of the effort that I have put in (and this last one a very small part, since all I did was add my name.)

Your position that the government would only have expected criticism to “take the form of statements and submissions that suggest amendment or clarification of particular sections” is, frankly, hilarious. You really think that the government was not expecting op-ed columns, blog posts, or discussions on radio and TV?

As for the idea that an article critical of NAMA would not have been criticised if it had been accompanied by a draft bill, my opinion is that the dogs of war would have been set on the economists no matter what.

Ultimately, I have a more positive view of media debates than you do. Yes there is disagreement, spin, and name-calling but that happens on all sorts of important issues and the public is used to it. In my opinion, the media debate has convinced many people that the government’s current approach, as represented by this draft bill, is flawed. And, to my mind, this is a good thing.


Very good contribution and it is the way I would favour . We have moved to the NAMA stage of this exercise to clean up the Banks and therefore specific amendments are the order of the day not a general critique which leaves the Public thinking well maybe we do not need to sort out the Banks and this will save us a taxpayers from anymore pain and all of the other rubbish about bailing out the devolopers and the Banks because they are allied to FF. The Government needs to sort out the Banks to save the livelihood of everyone on this Island.

A further point in relation to Nationalisation of the Banks is that I recall that a letter was sent in april 2009 to the Irish Times signed by 20 Academics who said they favoured Nationalisation of the Banks and a number of those Academics are also on the list of 46 signatories in the IT last week. So really which policy on the Banks is being supported by some of the 46 signatories. For me as a person in business I need to have certainty as to what is being promoted just as I would when I make decisions about my business.

The slowness of the Government in dealing with this issue of the Banks solvency which has been around since late 2007 is clearly unacceptable and I do wish Academics would point this out more and more and also the urgency to implement the Mc Carthy Report recommendations to save this economy from potential ruin. Our National Debt stands today at more than 69 Billion euro – see Finance Magazine Debt Clock.

@Sally Anne… on transparency

If NAMA was to be operated transparently, it should

* Have a whistle blowers charter
* Publish audited accounts
* Publish valuations
* Publish transactions at as granular a level as possible, if necessary to an independent organization charged with protecting taxpayers interests.

Instead NAMA as currently drafted

* Indemnifies its officials and agents. Forbids its executives from commenting on policy when answering to the Dail.
* Does not pay VAT, taxes or even produce audited accounts.
* Has not published any valuations except it is directed to buy using the higher price of current value or some long term makey uppy BS value. And not directed on selling…. This 2 prices is a receipt for fraud.
* Will not provide any transaction details even to other state organizations or independent regulation to guard against fraud.

There is another question; that of basic competence…

1/ NAMA legislation does not address how to enforce what it is allegedly set up to do… restore credit….
2/ Or how to get its money back when the banks sell them loans with incomplete documentation, incomplete or not as described…. e.g. security changed, access lands now in wifes name and so on…. or other legal wheezes…

NAMA as a basic principle may have some merit; but as it is set up, the legislation needs to be rewritten, not amended.

As is, It is a bailout for corrupt developers and banksters.

Noel Whelan is an unapologetic supporter of Fianna Fáil. Whenever they are in trouble he pulls out all the stops to garner public support. As an ‘indpendent commentator’ he has never been partisan. His stance on NAMA is no different. The Irish Times should know better than to keep giving this soldier of destiny a weekly platform to defend and advocate FF policy.


“Thoughts on economists and the law”

On reading this thread, thank f*ck I didn’t study law.

The phrase “clean up the banks balance sheets” is used quite often by both sides.

I suppose clean up can mean anything from:
-calling in the loans and for those who can’t pay it means that underlying securities are seized, for some it might lead to liqiudation and the lender will not be paid back the loan in full.
-it can mean that the loans are not called in, the interest is rolled up and the borrower is allowed time for the investment to become profitable hopefully leading to the loan being paid back in full with interest.

The decision of how to deal with the impaired loans is currently being taken by the banks as they own the loans. NAMA or nationalisation will result in the government owning the loans through either NAMA or the owned banks.

The governments approach is to trust an economic model consisting of 300 factors to calculate long term value. The models accuracy will depend on the accuracy of the estimations of at least the same (300) amount of coeffiecients. I believe that it is very unlikely that the model will give correct valuations.

There is no transparency regarding how the government will deal with the impaired loans.

The business idea of developers is to sell the developed property. The expected profit were probably based on prices that are now unlikely to happen anytime soon. The developers are saying that the reason for the inactivity in the property sector is due to the banks. Others are saying that the lack of activity is due to oversupply in the Irish market and the corresponding price correction has not yet happened.

I believe oversupply is the reason for lack of activity and that the prices will fall further. Therefore I believe a large number of property developers and investors will not be able to pay back their loans in full with interest.

NAMA is as it stands not in compliance with EU rules as there is no clawback mechanism included in the current legislation for the event that overpayments might be made.

The slowness in the governments tackling of the banking crisis is correct. Yet, NAMA will not resolve any uncertainty as nobody outside of NAMA will have any chance of knowing what they will do to clean up the impaired loans. True with NAMA the banks will get money for nothing (I can’t see payment of more than market price any other way) and will have stronger balance sheets. Maybe they’ll put some of that free money into the Irish economy, maybe they’ll buy NAMA bonds. The only certainty is that the banks will use the free money where they can get the best profits.

Getting liquidity into the market is important. So is the price paid to achieve it. Nationalisation is cheaper than NAMA. If cost is one of the decisionmaking criteria, then nationalise. Modify NAMA to be nationalisation.


Q. “Your position that the government would only have expected criticism to “take the form of statements and submissions that suggest amendment or clarification of particular sections” is, frankly, hilarious. You really think that the government was not expecting op-ed columns, blog posts, or discussions on radio and TV? ”

A. No, I don’t; as is obvious from the sentences immediately preceding and following the one which you selected to try to make me look stupid.

In thirty years experience of professionally working on a wide variety of public affairs and political campaigns – including campaigns that involved a public consultation process, both here and in the UK – this is the first time I have ever come across a group that passed up the opportunity to formally respond to a public consultation invitation as part of their campaign armoury. Greenpeace, whose lobbying genius I greatly admired and respected, even when they were on the opposite side of an issue, never let such an opportunity pass and frequently mobilised the public to engage as individuals in the public consultation process. The reason is simple: media campaigns may exercise the public, and cause them to put pressure on governments; but at the end of the day it’s governments that make the decisions. So what campaigners are advised to do is to cover all their bases and never leave themselves open to the charge that they’re not prepared to directly engage with the decision makers on the issues and are simply engaged in media rabble-rousing or whatever.

My post, and previous related posts, were written in the spirit of being helpful, but one lives and learns, I suppose!


Look, maybe you’re right, who knows?

But I am not “a group” and I’m not running “a campaign”. I am an academic offering my personal opinion on a matter of great public importance. I’m not a lawyer nor are my objections to the bill of a sort that are well captured by the type of legalistic approach that you and Noel Whelan seem to think is appropriate. Moreover, DoF is well aware of my opinions on these matters, so a formal submission will simply consist of me repeating views they already know I hold.

And since I’m not a campaign — I’m not Greenpeace — I don’t have a personal legal department. So I won’t be spending the next few weeks drafting alternative detailed legislation, particularly as the academic term starts again and I have, you know, other stuff to do. If you want to use this to criticise me, then off you go.

I suspect the 46 will be waiting a long time (as we have) for the DoF to seek our input.
They have their minds made up, it seems


The usual response to public consultation documents consists of plain language, discussing the ideas behind proposals and suggesting an alternative approach to same, not setting out detailed alternative drafts of sections. More like what happens at the second state of a parliamentary debate on a Bill than the committee stage, if that helps?

Incidentally, I don’t agree with Noel Whelan’s specific comments in his article. The only ground that we would share, I imagine, is some knowledge of how the political system here works and the political media nexus and therefore a common approach to handling issues.

Sally Anne -> Aunt Sally ?

A lot of new commentators have popped up around the Irish blogosphere in the last few weeks, all spinning pro-government lines and using classic troll tactics to tempt opponents into discrediting themselves.

It’s no surprise that this is happening: any half-awake PR firm or media advisor would suggest it, but caution is required in response.

@Veronica and Karl W
You both have different views on how to influence public opinion and/or decision-makers. Isn’t that the essence of debate/discussion in societies where the freedom of expression is valued and protected – if not always welcomed by the powers-that-be?

I am still wryly amused that a FF Taoiseach (Bertie Ahern) set up a Taskforce and Office on Active Citizenship group when there was a strong sense of Una Duce, Una Voce in that party not many years previously. For the record, the McCarthy group proposed that any further public expenditure on this be discontinued, as “activity levels are low” (Vol 2. p.205)

Being active citizens is exactly what the founders of this and other blogs are, as well as those who draft petitions/letters for signature.

re. Draft legislation.
A Government appointed Commission on Bankruptcy reported in 1972 and drew up a full text of a new Bill to lay before the Oireachtas, as part of the final report. It took at least 10 years for that bill to reach the floor of the Dáil.

To ask for a draft of legislation, in whole or in part, in order to be taken seriously is a step too far. Some people will have time, skill and appetite for this – even if they lack experience. It may work, but that should not be the only criteria used to assess comments on public matters.

Others prefer to spend their spare time doing things in which they feel competent/skilled by virtue of their education, training and experience eg. analyses of economic activity, publishing the results and arguing their case publicly in whatever fora are available.

IMO, it is enough for people to analyse NAMA is in terms of the substantial issues, teasing out the implications of of the legislation, developing options, in whole or in part and presenting these results in fora accessible to the public – which includes the decision-makers and their advisers. The legal formulation can follow.

@Sally Anne

Hey sally why dont you set up your own pro NAMA blog. Link to it from here so everyone can learn the truth about this wonderful Fianna Fail proposal. We can also see how balanced you are from all the nasty comments about NAMA you will publish and rebut.

You could even write the blog in Latin, I’m sure that wouldn’t diminish it’s appeal 🙂

very good site & interesting debate & contributions.

On the subject of economic policy & its lack of engagement with academia from the politcal sphere;

would it be an idea that a forum or independent think tank type of group of economists get together and produce a report (annual or otherwise)on how they see the economy developing. Have this forum open to all political parties for independent advice.

Also perhaps a major public lecture or debate could be organised on NAMA? This site appears to have very high level followers and contributers perhaps it could sponsor such a debate. I am sure one of the TV or radio companies could be persuaded to broadcast such a lecture or debate. It would make a difference from reporting the latest PR report from whichever party verbatum.

As someone who emigrated a few years ago when i saw rediculious prices and cost of living relative to where i now live, I have a sence of sadness & outrage that political incompetence has possibly put an end to my returning home for the short to medium term at least.
I feel such a contribution to policymaking from academia might help make Ireland compeditive again. After all we have seen what a mess the politicians make of it…

I’m in Brisbane on a Rolls Royce pension of under 30,000 euro pa. Where did you end up?
The good news is that you will be facing an easier property market when you do return, if ever. The NaMa in particular is designed to maintain general land values but will have the opposite effect as it is too large, even if it breaks even, the fairest possible option. It will slow down the deleveraging necessary in a depression. It will slow building can you imagine bureucrats in charge of a bank and a real estate agency? All responsible to ministers who may change a few times in the course of a government! If it weren’t so serious it would be hilarious! And the leaks! Schadenfraude will never go out of fashion if this pigeon lays its egg.

As frequently said, NAMA is the biggest decision that will be made in the public sphere in our livetime.

I love the expression that NAMA is too important to be left to the economists. It gives the impression that policy for the last 12 years has driven be economists (would that it were true) and now that it is time for them to move over and stop hogging the levers of power.

The supporters of NAMA enagage in classic tactics.

Firstly, they try to suck us into the premise that There Is No Alternative so all we are allowed to discuss is NAMA and possible amendments that will keep the GP party sweet.

Secondly, any substantive criticism of NAMA is deflected by saying that it is only draft legislation and hinting that they will incorporate.

Thirdly, opponents are berated for not costing their alteratives while the NAMA acolytes present no costs themselves.

Fourthly, when people use the market available information and statements of the Minister to infer both true value and the intended payment, they are told that they dont have access to the detail, detail that under the guise of commercial sensitivity will never ever see the light of day.

Fifthly, while suggesting s degree of approval of NAMA by the IMF/ECB/EU Commission that bears no relationship with reality, proponents of NAMA castigate opponents for not having these agencies already signed up behind their proposal.

The key thread in all of this is that there is no real engagement on the issues.

We have a lady here with legal training, Sally Anne, claiming that 30 sections in the draft legislation deal with the transparency issues. I am sure she believes what she is saying, and she does have legal training, but no one with even a modicum of common sense would believe that we will ever know anything of value about the operations of NAMA. Commercial sensitivity and client confidentiality will rule and she and her colleagues will be the first to ensure that we are kept in the dark.

So to one and all on this forum.
Even if your viewpoint does not prevail, you are participating in the deabte for the most important decisiion in our lifetime.
I don’t think anyone should feel that constructive time spent here is wasted as I believe that this website has become preferred reading for present and future key decision makers.

Keep up the good work.

I know I may have brought a few fellow politicised people with me.
But they I always believed in playing a leadership role.
It would be a shame though if the quality of debate here were diluted.

PS Your absence on has been remarked upon.

I would like to comment on several aspects on the debate arising from this post about Noel Whelan’s article plus the subsequent comments from Garret Fitzgerald. The 46 economist’s letter is presented to us as some form of objective expert witness statement from a group of well qualified individuals. Their positions in named departments in named institutions are included, presumably to add credibility to their views. I have a number of reservations about the letter and its form.

Firstly, the letter is written in overtly political terms rather than in dispassionate objective language. It appeared under the banner headline “Nama set to shift wealth to lenders and developers”. The inclusion of developers is dishonest in the extreme. There are two other statements whose inclusion are extremely questionable in a letter which purports to be a balanced offering in a very contentious debate – (1) thus, by overpaying, the State will wind up transferring to private individuals a sum close to the entire tax take across all tax heads; and (2) so the Government is in a strong position, if it chooses, to negotiate with bondholders to engage in some debt for equity swaps. The choice of language is highly emotive and political.

Secondly, the suggestions in the letter that we are heading for a Government deficit of 30 billion euro and that the “true value” of the loans which Nama will acquire is close to 30 billion euro have been addressed in detail elsewhere. The use of both amounts would appear to be very sloppy and their inclusion would hardly be justified in an expert statement.

Thirdly, in this age of information overload one of the first things you must do is check the credibility and reliability of your sources. I looked the profiles of the UCD signatories plus a number of others. I looked up their areas of expertise, their research interests and their publication records. I realise that this is very subjective but some, at least, would have great difficulty establishing a claim to be expert witnesses on the relevant issues. I may be accused of unfairly playing the man rather than the ball here but politics is a rough business and if you cannot stand the heat you should not go into the kitchen.

As a retired academic I believe it was wrong for a number of those who signed the letter to do so, especially as members of named departments in named universities. I realise that this is a rather grey area with very few guidelines. However, when you invoke the name of your department and institution “in support” of any statement you should only do so when you have real expertise in the area under discussion. This is especially important when the topic is controversial or political. If you are engaging in political activity it should be done as a private individual, under your private address. I would point out that when such noted economists as Paul Krugman or Joseph Stiglitz write op-ed pieces they usually do so without citing of their titles or their institutions. In the current discussion I noted that Richard Tol, one of you regular contributors, explained that he refused to sign the letter because of his lack of expertise on the topic. I suggest that the universities and relevant schools/departments should address this issue and develop guidelines for their staff. I noted that one of the signatories, Colm Harmon, decried the fact that the expertise of academic economists is seldom called on by government departments. I broadly agree with him but if academics wish to be taken seriously they need to be careful about the when they invoke their expertise in areas of political controversy.

“It will slow down the deleveraging necessary in a depression. It will slow building can you imagine bureucrats in charge of a bank and a real estate agency?”

I agree with you. Do the economists here have some thoughts on this?

Ireland has decided no firesale. Therefore the overhang in property will take longer to clear. In fact with Nama presumably no sales until the market turns up again.

How does the market turn back up when supply far outstrips demand and no one will sell till market prices get back to “normal”?

Won’t this leave construction in the doldrums as who in their right mind will start building again when this overhand exists?

Surely recessions must result in firesales before recovery can begin?

Perhaps someone has studied this.

@Myles Rath
So, let me get this right – your not in favour of academic freedom? As in there should be “guidelines” on when and how and where and to whom under what circumstances one should speak?
Strange, in 43 years as an academic did you not benefit from it?
Or is it ok in science but not in humanities/social sciences?
You seem to come from a perspective that we are acting politically – I presume you dont actually think this and its a rhetorical device?

Finally, the title heading was NOT chosen by us but by some subeditor in the Times.

@ Brian Lucey
We could trade clichés and try to distort each other’s positions but there is not much merit in that. However allow me to use one cliche which gets to the heart of my position. With freedom comes responsibility. As far as I am concerned you or any other of your signatories can say whatever they want as long as it is not incitement to hatred, or blatantly racist, or subverts the state, or —-. You simply should not drag in your department or university to lend credence to whatever you are saying when it is outside your area of academic competence. You clearly seem to have some expertise in the issues surrounding Nama, but some/many of the other signatories would not appear to have much – but some of them probably could plead age or inexperience in their defence.

“Guidelines” would be valuable to most people – except obviously to those who know it all –and I do mean guidelines only. I am impressed by the 43 years bit but you may not know that I do not hold the “authorities” of most institutions in very high regard. “The emperor has no clothes” is one of my favourite metaphors. However, I found that it seems to be equally true when applied horizontally as well as vertically – but we probably should modify it to state that the emperor has a very limited wardrobe.

I do not suggest you are motivated by party politics. Personally, I have long held that the Ahern/McCreevy/Harney nexus was a disaster from a socio-economic perspective – I suspect that Cowen was somewhat inert for most of it. But what you are engaged in is highly political and you cannot ignore its impact or how it is used or abused. Incidentally did I miss any high profile disclaimer about how the 46 signatories repudiated the headline about wealth transfer to developers.

@Myles Rath

Karl Whelan was at pains to dissociate himself and the other economists from the headline when he referenced the article on this website.

I think your point that the issue is highly political is valid.

As a matter of interest, did you first seek the signatures of those economists with relevant expertise?

Maybe you could clarify how many economists with relevant expertise
were offered the opportunity to endorse the article and how many of those with relevant expertise signed?

I know this may sound petty but it is clear that the article has traction because of the fact it was endorsed by 46 signatories and it seems clear (without wanting to put words in your mouth) that such was your intention.


Thanks for your comments.

1. The Headline: Misleading, yes, though I personally noted this on the day of the publication. Brian and I have discussed gettting a clarification published in the IT. I think perhaps Brian has requested one.

2. You wrote about “two other statements whose inclusion are extremely questionable in a letter which purports to be a balanced offering in a very contentious debate.” I’ve written here about the issue of “balance” quite often. It is often used against people when they put forward a particular opinion. The piece is critical of the government’s current approach. In that sense, it is not a “balanced offering.”

As for the statements themselves:
a. thus, by overpaying, the State will wind up transferring to private individuals a sum close to the entire tax take across all tax heads;

b. so the Government is in a strong position, if it chooses, to negotiate with bondholders to engage in some debt for equity swaps.

I genuinely don’t see what is “emotive” about these statements.

3. You have decided that the two 30bn figures are “sloppy.” Well, perhaps you might read this
and decide if you still think the deficit figure is sloppy. On valuations, I can tell you that Anglo Irish bank have stated that Irish property development loans are down 70% from peak. The Liam Carroll case has also given an insight into the terrible financial state of developers. Based on (admittedly imperfect) sources of information like this, the 30bn valuation number doesn’t look so far off to me.

4. You raise an important point with — “looked the profiles of the UCD signatories plus a number of others. I looked up their areas of expertise, their research interests and their publication records. I realise that this is very subjective but some, at least, would have great difficulty establishing a claim to be expert witnesses on the relevant issues.”

A couple of points on this. First, UCD research profiles are pretty limited at telling you what people know about issues like this. Look at mine and you’ll see that my research is not in banking. But I worked for the Federal Reserve and the Central Bank here for a combined 11 years, so I actually know quite a lot about banking.

Still, it is definitely the case that many of those who didn’t sign choose not to because it was outside their area of expertise. The widely cited implication that those who didn’t sign must be experts who support NAMA is misleading.

That said, many of the points made in the article are ones that economists of many stripes can understand and I know many studied the issue carefully before putting their names on this. A number approached me with questions about various issues before deciding to sign or not. I think for Brian to have turned down a smart university academic who wanted to sign on the grounds that their research is in, say, labour economics, would have been a mistake.

And by the way, Richard Tol did not “refuse to sign” the petition as he was not asked because Brian did not ask ESRI economists.

5. As for your concerns that the whole exercise is political, I can assure you that the people who signed come from all over the political spectrum. It is only political in the sense that it criticises the government’s draft proposals. But Myles, if economists refrained from discussing government economic proposals because to do so would be “political”, then we really would be the crowd of useless ivory tower fools that we are often portrayed as.

“A lot of new commentators have popped up around the Irish blogosphere in the last few weeks, all spinning pro-government lines and using classic troll tactics to tempt opponents into discrediting themselves.

It’s no surprise that this is happening: any half-awake PR firm or media advisor would suggest it, but caution is required in response.”

I have only recently started posting on any sites but I am a long time reader and I completely agree with the above. There are responsible pro-Government Nama posters but the percentage of more recent pro-Government Nama people who are trolls is astounding. The best solution is to ignore them when possible and be brief with them when necessary. Do not let them get under your skin and please don’t let them stop you from giving the public your views.


I would be grateful if you would delete my last post (August 31st, 2009 at 5:11 pm). Having slept on it, I am not happy to get into a discussion as to whether or not economists should have put their name to an article. I am not an academic and I use a pseudonym on this website. Given that this issue is serious for the people involved, I don’t think my input is appropriate on issues of academic ethics.

You might just replace the comment with “deleted at user’s request”.


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