The Green Preferendum: Cod or Fish?

The Irish Times has the details of the Green Party preferendum.

1) Nama with strong Green Party policy conditions and only current market values being paid for transferred loans: 23 per cent;

2) The “Swedish solution” with each institution forced to write down its loan book to current market values and the possibility of separate asset management companies for individual banks: 20-21 per cent;

3) A free-market, laissez-faire approach, with banks left to fend for themselves: 14-15 per cent;

4) The Nama legislation in its present form: 13 per cent;

5) Partial nationalisation, with a “good bank” to assist small and medium enterprises: 12-13 per cent;

6) Full nationalisation: 12 per cent.

One can only imagine what subsequent ownership structure was envisaged by the Green Party faithful who voted for (1) and (2).

Rumour has it, the menu for dinner in Athlone was:

1) Chicken

2) Cod

3) Haddock

4) Sea Bass

5) Salmon

6) Fish

Hardly anybody picked option 6.

61 replies on “The Green Preferendum: Cod or Fish?”


So you do have a sense of humour!

More seriously.

The reports indicate only 140-150 members turned up.

If such a small number of individuals can change government policy, for right or wrong, I think it leaves a lot to be desired about our method of proportional representation.

Maybe the other party members were on their bikes in Dublin.

It is a sad reflection on our society that we are looking at a minority party…..96000 first preference votes…….to keep a zealous government in check.

Economics question: What price democracy?

Look at the options….. It appears that very few greens favour paying Long Term Economic Value…. It was explicitly ruled out in the most popular choice, and it can be argued it only appears in the choice for NAMA as is 13%, and is ruled out in the other options.

On Wednesday Lenny has to riddle again on LTEV’s. Except now the banksters are listening looking for their figures. And the Greens are listening knowing their members do not want to overpay….in fact may revolt if LTEV goes ahead

Im sure he will come up with a fine collection of words that mean absolutely nothing;

but it is a difficult issue to fudge, because if NAMA wants to use anything other than established accounting practices/current market value, they have to have the concept embedded in the legislation….. If its still in the legislation, the greens cannot claim to have gotten rid of it to their members.

I think youre missing the point…… nationalise or not is not the only problem….. LTEV and transparency are even more important to the Greens ….

Thats fair enough, as we have seen Anglo are nationalized but still trading up to their old tricks.

Option 1 could include paying MV + risk sharing up to LTEV via subbie bonds. It is not clear whether the preferendum ballot was drawn up based in the initial draft legislation.

How are current market values for houses to be determined?

This is not a trivial point.

There are three sources of data on house prices in Ireland. One is the monthly index published by Permanent TSB/ESRI. Another is the quarterly index published by Daft. The third is the quarterly figures published by the Department of the Environment. The ESRI/Permanent TSB one refers to selling prices. The Daft one refers to asking prices. The Department of the Environment one is based on mortgages.

None of the three are perfect. However, the striking thing about them is that they all show almost identical falls in house prices since the peak in 2007 Q1. Both Permanent TSB/ESRI and Daft show falls of 23 per cent between 2007 Q1 and mid-2009. The Department of the Environment one lags a bit and only goes up to 2009 Q1. But, it shows a fall of 20 per cent between 2007 Q1 and 2009 Q1. One would think that the fact that they all show almost identical falls would result in their figures carrying some weight.

However, other ‘sources’ (and, here, I use the word ‘source’ very loosely), claim that the fall to date is actually much greater. Morgan Kelly puts it at over 50 per cent. DavidMcWilliams likewise. A few media reports recently have put the fall to date at 60 per cent (the media in Ireland would never exaggerate, of course, in the pursulit of sensationalist headlines). And a few ‘experts’ on Property Pin, who also post here, put the fall to date at 80 per cent.

I’d say that, whether its NAMA or one of the alternatives, the primary requirement for it to work is that it uses accurate figures for current house prices. So, which figures will be used? Those produced by semi-authoitative bodies like Permanent TSB/ESRI, Daft and the Department of the Environment, all of whom, whatever the imperfections in their methodology, do make serious attempts to determine current house prices? Or those produced by various media economists and academics, which appear to be largely based on hearsay, pub gossip and wish fulfillment?


Lucky Lenny will probably say that the formula will be determined by a ministerial regulation after the bill is passed.

Was there a sauce option for the salmon.
Dill, hollandaise, bernaise?

Is David McWilliams still wowing everybody with the claim that he was the only person to predict the credit crunch? Not only does he have a vested interest in overstating the extent of the fall, he has plenty of form.


The Irish Times article is simply wrong on the process and the results. There is no precentage outcome from a de borda count. The options presented arose from the debate. I don’t agree with the idea of a preferendum but the Irish Times has reported the details inaccurately.

Those wanting to read about the preferendum should see

Should the moderators of this site not exercise control over the use of obscene language? The last poster, Garry, has used a number of 4-letter words, one of which at least will be very offensive to most people, particularily ladies. This is supposed to be a site for intelligent debate. Its not or the Property Pin. Anyone who wants to use obscene language should head off to one of those sites. If this was a football match, Garry would be taking an early bath now.

“And a few ‘experts’ on Property Pin, who also post here, put the fall to date at 80 per cent.”
thepropertypin keeps its own anecdotal database of price drops based on asking price information as published in various sources. We haven’t seen 80% drops there yet. While I can’t claim to speak for othe posters (it is, after all, a forum), I don’t recall seeing anyone say that prices are currently 80% down. Some put the fall at 40% some higher, some lower, but there’s nothing in this game for two in a bed…

I agree it is going to be difficult to find a current market level. But perhaps we should look at some reasonable valuation methods? Rental yield, for example. Ronan Lyons of has done some work on this. Or perhaps ratio of price to average earnings? Strangely enough, both methods point to a 60-70% fall. Of course both suffer from the fact that their reference points (rents and wages) are declining, so they are shooting at a moving target…

But difficult as it is, it needs to be done if only to establish LTEV which, as we all know, is based on a bounceback from the trough based on selective datasets from some other housing busts. If we don’t know what the trough is, how can we decide what level the bounceback will be to?

We seem to be getting bogged down with the technicalities of how Nama will work.
The size of the haircut, how much will the banks need etc.

These are all valid points, but we seem not to be able to work our way through the process to a logical conclusion.

Forget for a moment the size of the Government stake after Nama, or the haircut.

Consider this:

Anything other than paying market value for property will be a double whammy on the Irish Public.

We will be over-compensating Banks.

We will be putting an artificial floor under house prices.

We all know of completed houses unsold. I can point to one developer here in Roscommon who launched luxury bungalows 30 months ago at Euro295000.

Today they are on the market at 195K and still cant sell. He has several big developments, so I am sure he will be covered by the Nama transfers.

If we pay the banks LTEV on those properties.Then Nama are not going to sell them at 195K.

Like an auction, were a property fails to reach the reserve, they will be withdrawn from the market.

There is every danger that if this is repeated across the country, supply could shrivel and prices will artificially be driven up.

Michael Harvey Says:
September 14th, 2009 at 2:26 pm

“Option 5 should have read: Sustainably farmed salmon”

Also menu items 2, 3 & 4 should have been “line caught”.

Maybe item 6 should have been “Line Caught Taxpayer”, after all that would leave more taxpayers in the ocean of debt to be caught later.



You say:I agree it is going to be difficult to find a current market level.

I would say that is not the case for a lot of the new properties on the market. You see them advertised on the hoardings. 2 bed detached from 220k etc.

I gave an example above not 1 mile from my house.

The valuation process is supposed to be looked at loan by loan. Is it beyond the Nama expert to ask the developers what price they are selling at, and then take it from there. Most of them have already reduced prices.

@John… I apologize…. and will ban myself for a while

Anyways, my post is on the politics of the matter, which is not appropriate for here. this is supposed to be about the economics or technicalities of how NAMA will work… I was a bit frustrated that economists cannot see the implications of the Green Party Conference but I was out of order.

cant resist a final line though… in a funny way the ordinary greens seem to have identified the core issue with NAMA, as well as the economists have…. the problem is the creation of entirely new concepts such as LTEV instead of using proven concepts like market price, profit, loss, payment, etc to solve the problem.

Non-Partisan Economist Says:
September 14th, 2009 at 3:00 pm

“Should TD’s with shares in AIB and BOI be allowed to vote on the Nama legislation?”

My opinion. A definite NO.

Nor should any TD in debt to the banks where that debt is likely to be taken on by NAMA.

Nor should any TD who is holding long puts or other bets on the outcome.

Every TD should be required to disclose all interests in the outcome.

It will never happen of course. When viewing BL on his gentle grilling at Committee most of the TD’s thought that declaring their interest was a laughing matter.

The current price the developers are selling at does indicate something, however if it is the market price why aren’t more sales made?

The low volume of sales are either indicative of low demand at current prices or low supply that is resulting in a higher price and higher profit margin for the seller. Does anyone believe that there is a low supply of properties?

Michael Harvey Says:
September 14th, 2009 at 5:01 pm

“Not part of the thread….
Zoe group going back to supreme court again”

Maybe our Public Interest Director is going to increase his funding offer to complete the Anglo headquarters from €68,000,000 to €168,000,000.

That ought to cover any shortfall the silly judge thought existed.

@John – let’s leave it to the politicians to worry about style over substance. As for “particularly ladies”… ah never mind.

@KW – I presume that’s “Black” Sea Bass, not overfished Chilean?

@Michael Harvey – is it time for some of the State’s forthcoming borrowing so that local authorities can eliminate their housing lists on a bargain, thus taking supply out of the market and making the remaining unsolds sustainable? I would argue though that intervention of that kind should be prioritized (for once) on developments that were zoned properly and constructed decently – and if Social Welfare grows a pair and stops sending rent allowance to tenants of unregistered landlords the rental sector could get a bit volatile too.

@ Greg and Mark Dowling: good points.

I guess we can’t rely on a fair vote. But we can keep the debate going and get the public more engaged.

For example, why should anyone – without shares in AIB/BOI – care one way or the other whether shareholders get wiped out or not? The business model has failed in these banks. Risk turns out badly all the time. I’d love it if the government compensated me for every risk I took that turned out badly. (Milton Friedman would turn in his grave though!)

One can argue that more regulation was needed, but I think the onus lies with the private entitties here, i.e. the banks have to take more responsibility for their actions. The bank executives have to answer to their shareholders. Who may find that they would feel better if they stripped those executives of their pensions…

All of this may boil down to the question: What do shareholders deserve? I’m of the view that depositors and bond-holders derserve protection; but that shareholders were up to their necks in risk. And as I said: risk turns out badly all the time. Imagine if the government compensated you for every risk you took that turned out badly. That’s not a free market… that’s eradicating risk with public money.

A compromise might be to set up a register of former shareholders upon (temporary) nationalisation. When the banks are floated on the private market again (which won’t take forever), former shareholders could be offered a portion of the windfall.

How much? Well maybe that should depend on when the shares were bought, and more importantly, how much hey were worth at the time of purchase. More precisely, how much did they cost to buy? I don’t want public money to be used to compensate people for capital appreciation. But for the cost of their purchase – I could live with that. Hopefully there would be enough funds from the windfall to cover that. Otherwise, I’d be inclined to say: “You took a risk, live with it”.

A final thought is to limit the compensation-scheme (as outlined above) to certain entities. I have no doubt that a lot of professional (risk-averse) investors, e.g. pension fund managers, sold out of the Irish banks months ago. I’d imagine that a lot of people in there now are speculators & hedge funds. They should be ruled out of any compensation-scheme that work along the lines I describe.

There should be no sympathy for speculation!

jc Says:
September 14th, 2009 at 5:55 pm


(estimated) LTEV – (approximate) market value = Quantity of subordinate bonds issued


If you are right the banks must value NAMA’s subordinate bonds at zero, until such time as they can be reasonably valued above zero.

Back to square one. The banks are insolvent.


You assume that the reason for using LTEV is to avoid insolvency/nationalisation rather than to bring the banks along voluntarily.

Except that still leaves the taxpayer exposed to prices falling further than current market value.

I still think the best approach would be to pay a discount to market value and then give the banks share holders a share of the upside.

zhou_enlai Says:
September 14th, 2009 at 6:22 pm

You assume that the reason for using LTEV is to avoid insolvency/nationalisation rather than to bring the banks along voluntarily.”

I don’t assume using LTEV (NAMA current form before any more Greenwashing) is to avoid insolvency/nationalization.

I am firmly convinced that LTEV (NAMA current form) is a cynical exercise in transferring losses from the private to the public.

I don’t understand where the banks would be “voluntarily” brought to. They’re not going to volunteer to go to the slaughter house.

@ original poster,

I was thinking long and hard as I read the newspaper this morning. I was thinking to myself, you know what, at least the Greens are in there trying to do something. I took it as a foregone conclusion, in my mind, what kind of a debate was going to happen amongst ‘grassroots greens’. Some of my best buddies have been grassroots greens for a while now.

But as pathetic and all as the Green debate may now seem, at least there is a debate. Or some sort. Imagine, the level of discussion at a Fianna Fail think-in. Now there is something very scary to contemplate. I’m far too young to know this. Was there ever a FF party this limited in scope?


Yep. The Greens are doing Ok wrestling with a Frankenstein not of their own creating.

@Dreaded_Estate…perhaps, but that’s not going to happen.

@Greg: true that. Not being an expert on bond issues, I would be reluctant to comment further, other than to wager that there must be an accounting trick to circumvent this. Give the bonds a nominal value which depreciates if NAMA tanks…


“…there must be an accounting trick to circumvent this…”

There is no such thing as an accounting trick. Accounting is just glorified bookkeeping.

There are of course people (bookkeepers, accountants, lawyers, politicians, journalists, voodoo merchants, priests, economists, car mechanics, double glazing salesmen, “Can I tar your drive boss”, whatever) who will use any trick of their knowledge to gain advantage.

If I may, I will change what you have said to “There must be an auditing trick to circumvent this”.

Welcome to the promised land jc.

Are there tricks in auditing?

Who Audits the Auditors?
By Arthur Levitt
Published: Thursday, January 17, 2002

“But we were largely unsuccessful in persuading accounting firms to separate their auditing businesses from their consulting businesses and in convincing the auditing profession to do a better job of policing itself. Congress and federal regulators should use this scandal to demand some long overdue changes.”

@ Sarah
Good point
The Greens are good at harmonising the soverign will of its constituents with the political tides of the times that they are in.
Must be the healthy diet and all the cycling.

I don’t understand why the Greens are ridiculed so. They are the only party to have invited economists to speak to their membership (I think) up until Labour lately asked KW to talk to the Labour grandees. Thay also had a preferendum with weighted scoring. Who knows, they might yet be the first party to operate Balinski’s majority judgment voting system!

One may find flaws in the setting of choices but at least it showed a creativity and an effort to stimulate real debate. After all that their primary focus seems to be in the two areas that concern a lot of people – (a) transparency and oversight and (b) valuation and risk. I have to say that their rather public debate is impressive compared to the membership of other parties. Many supporters of other parties who may feel ignored by their own party leadership may be looking on at the tree-huggers with interest.

For ages, the Green Party elite of Gormley, Ryan and Boyle have not been clued into what the party is thinking or feeling. They were decimated in the election in June and the response of the leadership was…. no problem tough on those of you who lost your seats but lets plough on. The fact of the matter is that NAMA in all its guises is anathema to the party.

Now they have been shocked to their core to realise that only 13% of green party activists support NAMA. The grass roots have told the party elite that it is their party and they have reclaimed ownership of the party from Ryan and Gormley. So much, for being “allowed to announce” the meaningless amendments to NAMA. For instance, an 80% windfall tax on rezoning and then in the next breath saying that there was enough building land zoned for the next 70 years and that they might have to rezone backwards.

I think the vegetarians could not find anything on the menu that they liked at all and I doubt they will be able to find anything.

I’d argue that Option 1 is a red herring or trojan horse. If the long term economic value is linked to the subordinated bonds, the Green leadership will try to claim that they’ve satisfied this (might also get a requirement for a couple of shrubs to be planted etc).

Most of the fix will be paying close to face on loans labelled “performing” and current market value methodology.

I have to say, all this ‘Green inluence on NAMA’ certainly looks fishy to me. It smacks of being orchestrated…. a PR veil being drawn over the eyes.

As I was on my second coffee this morning, a thought struck me.

Why is NAMA trying to save ALL the banks?

Why not save just one or two? We’ve already nationalised Anglo so give that to those who reckon they can temporarily nationalise and set up a good bank (if it isn’t too much of a pig’s ear) and then sell it off and make a profit for the taxpayer.

Maybe also do the minimum to save Bank of Ireland but let the rest go to the wall if they can’t stand on their own two feet?

Could work out a lot cheaper and still achieve the same end result? I would have thought if you weren’t spreading your energy across several banks we might even do a good job of it if we focus on a couple?

Just a thought.

…..and having just read the IT website headline while drinking coffee 3, I am even more convinced it is orchestrated.

‘Lenihan is confident Green TD’s will back Nama Bill’


I for one would not ridicule the greens.

What I increasingly find objectionable is the fact that a poltical party with only 4.7% of the vote in the last election, can dictate terms and conditions that every Irish citizen has to live with.

This is not the place for it obviously, but we really need to look at our system of PR

They have a paid membership of just under 2000. Only 140-150 could be bothered to turn up for the preferendum.

Disguise it as percentages or weighted scoring, I for one feel uncomfortable that as little as perhaps 20 political activists can end up making amedments to legislation.

Generally, people do care about the environment, but as wallets get thinner, Green issues will take a back seat.

It is not the Green Party membership that deserves ridicule, but the cynical career politicians in the PP who engineered a preferendum in such a way as to dillute the “No to Nama” vote amongst five different options, and then claim the No and Yes were about on par.

Kudoz to Karl for calling it – and doing so with humour and zest.

Whatever happens, Karl Whelan deserves a lot of respect for sticking his neck out in the interests of sound economic policymaking and fair debate.


Rest assured, I’m very much a woman. Alas, definitely not a ‘Lady’ though, since I lack the social pedigree of some. I have no objection to strong language. Used indiscriminately, it’s the badge of inarticulacy; but occassionally and as a last resort, it can be very effective in certain encounters. I would agree though that it has no place in a general discussion between strangers on a blogging site.

When it comes to decision making on complex issues, a preoccupation with certainty, the ‘you’re either for it or against it’ approach, can make for some pretty horrendous mistakes. The Greens had a moderator at their meeting, as I understand it, who teased out the questions that had arisen from the discussion on the floor and formulated them into a series of propositions on which those present were then asked to indicate a preference. To my mind, that ‘s a far more intelligent way for a small group of people to advise their leadership on a course of action than a crude ‘yes’ or ‘no’ demand.

The Greens make an easy target, I think, because philosophically they’re coming from a different place to most other political parties, which is reflected in the way they go about their political business. But I admire them. At least their commitment to a sustainable environment stands the test of time as a philosphical benchmark. The ‘left’ lost it in 1989 with the collapse of socialism and the current depression doesn’t do much for the market beliefs of the ‘right’ either. In government, the Green Party have shown bottle, not rushing for the exit at the first newspaper headline or difficult decision that arises like some other parties have done in the past. It’s fun to poke fun at them – humour is the saviour of us all – but their pow wows have the virtue of being genuine ‘think-ins’and maybe we’d all be better off if there was a bit more of that about.


We need to move this Green debate to politics ie.

I just do not like being pushed down a cul de sac by a party representing less than 5% of the electorate.

@Michael Harvey,

You can’t really divorce the politics of Nama from the economics of it anymore. I think we passed that post a long while back. Where coalition governments have foundered before is when the larger party makes the fatal mistake of failing to recognise that while in government, all partners are equal. Levels of popular support are one thing, the exercise of power is quite another. As for, that’s the site where anonymous posters shower bad language and insults upon one another with reckless abandon? It has the political credibility of ‘Hello’ magazine, and no lady, correction, anyone with a grain of common sense, would be caught dead trying to seriously debate anything on it.


I get your point.

Nama is the most serious piece of legislation contemplated for perhaps the last 30 years.

The effects could still be with us for the next 20.

Is it right, that as little as 20 activists can decide for the nation?

Michael Harvey says:

“Is it right, that as little as 20 activists can decide for the nation?”

Is it right that one vote should carry the day in a parliament? It sometimes happens. It is called democracy, though some, myself included, would prefer to call it “elected dictatorship.”

Perhaps it is good that 20 activists might do something to dilute the actions of the largest and most powerful political-economic alliance in Irish history from carrying out an unprecentedented fraud on the Irish people. It’s GUBU all over again!

The Green preferendum should have been layed out as follows:

Option 1 Nama in present form with bribe.
Option 2 Nama in present form with bigger bribe.
Option 6 Nama in present form with any bribe you want, name your price.

Whatever will command 2/3 support at the October conference will be chosen. It won’t be option 6 if the leadership have their way. They will be content with much less.

Michael Harvey,
Is it democratic. No. But is it right that a single independent such as Jackie Healy Ray – or Michael Lowry – could possibly sink NAMA or certainly the government? No right, not democratic but that’s the system we have.


They might be cute hoors but they are elected cute hoors.

These are party activists, answerable to no one.

@Graham Stull

“It is not the Green Party membership that deserves ridicule, but the cynical career politicians in the PP who engineered a preferendum in such a way as to dillute the “No to Nama” vote amongst five different options, and then claim the No and Yes were about on par.”

You really haven’t a clue about this process (which I disagree with personally). It is not possible to “engineer” a preferendum. The options were put together by a panal of 3: one election specialist, one senior barrister and one rep of the constituency groups who called for the vote and is against NAMA. There is no way it could have been and was manipulated by the PP.

On the options point, the more options there are in a preferendum relating to one subject, the more likely it is to come out with a high score. By all means criticise but please try reading something about the process before you make wild assertions.

As you actually addressed the Green Party Members last Friday (the day before the preferundum) in relation to NAMA, and in fact had questions thrown at you and the other speakers from all round the room, which by and large were not fully addressed, surely you should be well aware of the concerns that a number of Green Party Members have in relation to NAMA, particularly in relation to the use of Long Term Economic Value rather than Current Market Value.

The preferendum exercise is entirely democratic and solutions focused and sought the views of Members in relation to solutions for the current economic crisis and put these options to the Ballot in order to establish where consenus lies. It was clear that Members want significant amendments to the existing Bill.

Perhaps a number of people were influenced by your talk the previous day!!!

The issue regarding the supposed over-influence of the Green Party grasssroots members on the governmental process needs to be addressed. Personally, I prefer open, grass-roots decision-making to the “top-down” process with decisions made behind closed doors by a small number of individuals, which usually characterises the operations of political parties in this country.

The relevant Constitutional item (allowing a strong grass-roots influence on decision-making) was in the Green Party Constitution before the last election. The text of the Green Party Constitution is, and has been, available to anyone interested. Consequently, it should be assumed that anyone who voted for the Greens, or indeed anyone interested including the media, knew what they stood for in terms of process and structure, or at least was in a position to know if they wanted to.

Furthermore, the September conference was a “testing the water” or “temperature-taking” exercise. Unlike the situation with the coming October Convention, the result was not binding on the Parliamentary Party. It was purely indicative of the feelings of the members, and may provide a useful basis for the formulation of (binding) resolutions in October.

Admittedly, it is extremely unlikely that the Parliamentary Party would go against the expressed wishes of the Green Party members in the October Convention. In the highly unlikely event that they did so, we would all be in uncharted waters, and I imagine that everyone would want to steer clear of such uncharted waters.

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