Cowen on NAMA Getting Credit Flowing

In a year-end interview with Jody Corcoran in the Sunday Independent, the Taoiseach answered questions about NAMA. The relevant passage is below the fold.

JC: “A lot of people are still confused about Nama. The bottom line, from the beginning, was that it would get credit flowing again. When will credit start to flow, that’s what people want to know?”

BC: “Credit flows again when we take the distressed assets off the books of the banks so that they concentrate on the loan book that is viable and is productive. That will bring more international confidence, the banks being able to do the job, and that’ll bring more capital into the system.

“So we also have in our various acts and legislation passed to ensure that viable business propositions are supported. That’s a case-by-case basis. But the important point is this: if we didn’t legislate for Nama, and we don’t implement what has to be done, the availability of credit to the system will continue to decrease because the banks wouldn’t have the capacity to lend. So you’re asking for the black-and-white answer to that question: until you put in the new structures, and you take the problem out of the system, you’re not in a position to resolve the problem.”

JC: “When will it be? Will it be March, April, February?”

BC: “Well the answer is that Nama will be operationalised in the new year. The transfer of assets begins then. During the course of the six months you’re going to see the main part of that process implemented and arising out of that then you have the prospect of increased credit available . . . so during the course of 2010 we expect to see an improvement in the situation.”

JC: “So it’ll be the latter half of 2010 that credit begins to flow?”

BC: “Well, during the course of 2010, and in the meantime we have a system in place that seeks to ensure that banks are supporting viable business propositions.”

I think it is interesting that despite the point-blank refusal of the bank executives to agree with these claims (see here and here) Mr. Cowen is still maintaining that NAMA will get credit flowing, though not any time soon.

I suspect now that I’ll get the usual set of comments that I shouldn’t expect an undercapitalised banking system to supply large amounts of new credit to an economy undergoing a severe recession or that it’s too much to expect any strategy to deal with our banking problems to be judged on that basis. These points are correct and I have made them myself, for instance here.

The reason this stuff is worth noting is that it shows that the government has not yet moved on from a political strategy aimed at promoting NAMA by claiming that it’s going to do stuff that it won’t actually do. The government is being supported in this by those opinion writers who continue to write (some of them every week) that the passage of the NAMA bill involved the government “winning the argument” about NAMA being the best way to “fix the banks.”

This strikes me as a very backward-looking political strategy, focused on justifying past decisions rather than dealing with what’s to come. A public that has been lead to believe that NAMA was the final solution may not be in any mood to support future plans, no matter how necessary they may be.

25 replies on “Cowen on NAMA Getting Credit Flowing”

how about a proof by contradiction: how would any other alternative get credit flowing? short of increasing mandatory reserves mixed with a negative interest rate – there is no method for ‘forcing credit out’, if you had the controls in your hand what would you do?

I wrote

“I suspect now that I’ll get the usual set of comments that I shouldn’t expect an undercapitalised banking system to supply large amounts of new credit to an economy undergoing a severe recession or that it’s too much to expect any strategy to deal with our banking problems to be judged on that basis. These points are correct and I have made them myself, for instance here.”

I’ve noticed before that even when I specifically say “I am not saying X so please don’t comment that I’m saying X” it never actually manages to prevent exactly these comments.

@Karl Whelan
I posted this comment on another thread about the appearance of the AIB and BOI heads at the Oireachtas recently but I will post it again as I think is relevant. I am now starting to believe that their suspiciously coordinated declarations may have been part of a negotiating strategy to extort more money from the government. I had thought that they were trying to be honest and were motivated to declare that NAMA would result in no extra lending because they did not want to be associated with the government’s misrepresentations. On reflection this doesn’t make sense because Irish bankers are motivated solely by their own greed and self-interest. The more likely explanation is that they were putting the government’s testicles in a vice grip i.e. if you don’t overpay enormously enough for the property assets to keep significant private shareholdings in our banks we won’t lend.

As Constantin Gurdgiev wrote:
“The Irish taxpayers are now facing a bill of tens of billions of Euros, as well as the decade-long prospect of zombie banking, development and property markets and construction sectors – courtesy of Nama.”

With Lisbon and the budget out of the way it is now imperative that this utterly flawed NAMA plan is stopped. Our opposition, media and civil society generally should be raising hell – not quietly complaining while our establishment mafia carve up the spoils in public.

This is an excellent sentence:

“The government is being supported in this by those opinion writers who continue to write (some of them every week) that the passage of the NAMA bill involved the government “winning the argument” about NAMA being the best way to “fix the banks.”

I could not have put it any better myself.

I do still have one major criticism of the commentary on the subject of credit here at the Irish Economy. I don’t know if many people understand what ‘credit’ is. Other than as a theoretical concept.

If I pay some ‘bloke’ in the morning to change a light bulb, that guy has to take on credit in some form, to pay for the yellow pages ad, the apprentice he sends out to do the work and the insurance payments for the health and well being of his employee etc. There is a whole string of things too, which I don’t even know about, which are specific to this guys world. All of which he requires credit to pay for.

The point is simple though. Because I may come home to find that his apprentice has not managed to change my light bulb. Rather, I find he was a thick, awkward sort of chap and has managed to pull the whole flex out of the ceiling. I am obviously not impressed with the work.

I withhold the payment until the matter is fixed up. Out of this engagement the buy I phoned from the golden pages has learned a lot of things about his business model. He has fired his apprentice also.

The fact is, if the above arrangement had not been fuelled by credit flows, then I would have paid up front. The flex would be pulled out of the ceiling. I would have to pay for several trades myself to fix the problem and do organisation of the whole mess. In total a job which should have cost ‘X’ now has ended up costing ‘X multiplied by 10’.

In total the economy of Ireland has suffered, because it has effectively shrunk by ‘X multiplied by 10’. This is what a good credit system allows us to do. Run the economy efficiently with certain ‘learning feedback loops’ which work as checks and balances. The economy can grow by a huge factor compared to one which has a broken credit system. These are the real implications of credit systems when you break it down to nuts and bolts.

A useful discussion about ‘credit’ would do well to base itself on fundamental concepts. Credit is not the magic bullet to create jobs, or sustain businesses, or even fix the economy. It only has a single function to play in the entire engine – it is like a turbo booster. Just because we fix that part doesn’t mean the rest of the engine will hum into live again.

@Karl Whelan
After the inexplicable bank guarantee that almost brought down the country, the government told the assembled masses of the Irish Bankers Federation National Conference on the 22nd Oct 2008 of the onus on them to now lend:
“The onus is now on the boards and senior executives of the banks to meet the legitimate expectation that now exists that they will see as their first priority the goal of ensuring that the flow of finance is channelled appropriately to support and underpin sustainable economic activities on the necessary prudent, responsible basis that is clearly in the interest of both the bank, the borrower and the wider economy.”

On the 13th Nov 2008 the government reminded them of the onus on them to lend:
“Ladies and Gentleman, I am pleased to address your Annual Dinner this evening and want to extend my thanks to your President, Mr. Richie Boucher, for his invitation on behalf of the Institute…
The availability of finance is of course a critical element of our overall competitiveness and a key part of our national economic infrastructure. Because we have given the guarantee, covered institutions in Ireland have access to the liquidity and funding necessary for this purpose. I want to see the banks meeting the legitimate financial needs of consumers and business. The onus is now on the boards and senior executives of the banks to meet this legitimate expectation that now exists.”

In Sept 2008 the entire country was put up as security to save our banks and would have been destroyed without German support. But in spite of mortgaging our country to keep them afloat the banks gave no extra lending. Instead 2009 was to be an Onus Horribilis for businesses desperate for credit (although for developers state owned Anglo was always able to supply funds).

Now, one year and three months after our banks collapsed we are told that it will be another year until NAMA will (not) get credit flowing again. Then there will be another long delay where the government first fibs that credit is flowing, then attacks the banks who fib that it is flowing, before finally admitting that NAMA has failed (due to international factors, overpaying of non-senior public sector workers and the greed of the poor).

So, perhaps three years after the guarantee, long after every other country in the western world, and after an immensely costly transfer of wealth to the Establishment/Mega property developers/Bank investors, we will finally be discussing how to get a functioning banking system.

There is really only one proportionate response to greed and irresponsibility on this scale. The next government after NAMA should pass legislation to surcharge all elected representatives of the current government for ALL NAMA losses.
They do it in Britain so let’s do it here.

Credit will not flow. 2010 will see the demise of the American economy precipitated by a dollar collapse. US Treasury issuance for 2010 will need to be in the order of $2.2trillion. Who will buy? Foreigners? Not likely as a rush to an alternate reserve currency gathers pace. Most foreign countries have there own issuance problems and cant afford to bail out the US. Will the American public make up the difference? No chance, as John Doe is tapped out and buried in debt. At present a slight of hand whereby the Treasury issues bonds that pass through the “Households” channel before being finally purchased back by the Fed (with phony money) is funding Government debt. This ruse together with ever greater difficulty for the Treasury in attracting foreign T-Bill purchases leave the US Government finances in a parlous and ever worsening state. There is a consensus now developing that an imminent US currency crisis is unavoidable.

We have all anticipated a disaster at one time or another which when it eventually happens still proves to be a dreadful shock. Say a young relative you know to be ill dies suddenly. You feared it might happen, but when it does you are devastated. So sudden and so final. Recriminations are futile. The die is cast. This is where we are with the US economy. When it happens it will be sudden and shocking and will have huge ripple effects around the world. For the US people think Weimar hyperinflation.

Wither Ireland in this scenario? Our debts will skyrocket as the ECB is forced to abruptly raise interest rates. A three percent rise in the ECB base rate would destroy the Irish economy. NAMA would prove to be moot as our banks would require a whole new bailout to get them off the rocks. The Government would see the cost of servicing our existing debt double and we will still need billions more to keep the lights on in the country.. Will the ECB bail us out? I think not. I believe there are contingency plans which will see the Euro zone reduced to a hard core group in the event of a dollar collapse and Ireland will be out together with the Greeks, Spanish and other bubble generating miscreants.

In one respect it is difficult for the average person to even envision the worst. Our press and Economics profession (apart from one or two voices raised in this forum and elsewhere) have failed the public by understating the dangers that lie ahead. Patting ourselves on the back because of some favorable FT commentary about our pluckiness and determination to sort ourselves out will sound very hollow when the future we face is generations of debt peonage and abject poverty.

We face a bleak and uncertain future. The demise of the US will gravely affect us in Ireland. Yet our Government dithers. We need to act fast and don’t look back. The situation is akin to a race to the exits as smoke billows around us.

If our Government continues to slavishly abide by Trichets dictum we are sunk. Future borrowings should go to purchase and take delivery of Gold bullion. We must slash Public Expenditure by half. Quangos must die. We must leave the Euro before we are pushed and find something to sell that is essential to the rest of Europe such as energy, food, services etc.

Happy New Year.

BC “operationalised”

The lack of plain english is an indicator of frame of mind. This man does not know. What the talks about. He memorizes his brief and spits it out. It is probable that he does not believe it, as he has intellect. His job is to steer the ship. Displaying confidence even though he realizes that the ship has been in an ice field for a while now and is still taking on water. There are plenty of lifeboats for the first class passengers so he and his are all right.

The lack of new thinking shows the state of panic. They have done what they were told would be best in their interests and borrowed at 10,000 Euro for every man woman and child. They may have to borrow more just to tide them over until the fiscal deficit is balanced. Say another 5,000 per capita. Migration is already lessening payouts, but when the credit magic (Brian O’ Hanlon what you described is called a multiplier in the form of velocity of money, credit is a form of money) comes back, they will return again and resume paying off their debts, contracted in their name by him.

There are no new ideas. The ECB will forbid the issue of new money for public works as it is a bureacracy and no is shorter than yes, although nien is longer than ja!

So the economy will contract, helped by the government, until it stops contracting. And then the magic will return.

In the mean time, the bank multiplier is less than one. We get no bang for all the bucks poured into thebanks. Social welfare payments are declining, dragging down the private economy. Bet “illegal” drugs are getting cheaper though. Cutting into excise on booze and baccy. Anyone know the street prices? These are statistics that the state cannot manipulate.

I agree with you and those commentators that we read on the net.

Hence the likelihood of a war for the USA. Technically, as Congress did not declare, there are no wars at the moment. Destruction of manufacturing capacity means jobs for survivors, more than making up for lesser demand. And we get another baby boom!

The Irish government has no sovreignty and we are in the hands of those who control the ECB and the EU commission. The New World Order will function in much the same way. Local interest rate needs will be neglected. The policy makers have no way of modelling the rearrangements so steady as she goes! Slower and slower. Leaking all the way, with those who say we are taking on water been asked to suicide or jump ship!

Ireland will still be able to steal more crumbs from the big table via money laundering at the IFSC and through the FDI attracted by 12.5% CT rate and a double tax regime that is cast iron. Until it isn’t! I do not see much happening to dismantle the system as it favours those who invest wisely ie those who own TPTB. Our decline will be slower than the rest because of it but I fully expect somewhat “South American” income gaps to open up.

The good thing about the USA collapse for Ireland is that it will slow down taking on of NAMA debt. I hope! Totally toxic!

Karl: you seem to be arguing that recapitalization is _the_ issue. It is one the the two problems, the other being dealing with “challenging to price” assets. Nama has done that (rightly or wrongly) and yes now partial/total nationalisation is a likely next step. You are right that the government isn’t selling this… as they will try everything to avoid it.

Also the notion of ECB funding drying up is interesting… we well know this funding (ultimately) aided the banks buying our sovereign debt. Also a rates rise by the ECB is likely. Ireland is out of synch with the Eurozone… and I think we’ve a good case to make for a two track monetary policy. Something like continued ECB liquidity funding, at low rates… and for them not to be sniffy about collateral offered ( e.g. 🙂 ). Without that… well things will get pretty crazy regards pre-existing loans (esp mortgages) let alone new ones.

Overall the government hasn’t been presenting a joined-up economic policy… some of that is down to uncertainty (that they simply don’t have an exact one)… but I wonder…. do they actually have one, but just don’t want to mention some of it ? Is PR, for both the Irish people & say the Germans (or Greeks !) the over riding consideration ? Did they knowingly cart-before-horse some things for that reason ?

For Pat: the first ecstasy I ever bought was twenty pounds; the last, three euros. Howzat for deflation.

“I suspect now that I’ll get the usual set of comments that I shouldn’t expect an undercapitalised banking system to supply large amounts of new credit to an economy undergoing a severe recession or that it’s too much to expect any strategy to deal with our banking problems to be judged on that basis. These points are correct and I have made them myself, for instance here.”

I’ve noticed before that even when I specifically say “I am not saying X so please don’t comment that I’m saying X” it never actually manages to prevent exactly these comments.

….erm… asking what you would do if you had the controls in your hand isn’t saying that you have said X or Y, merely it is asking for what you believe to be the solution, if you are able to critique anything it is generally on the basis that you have a better alternative? So what is it?

@ Andrew S

I’m familiar with the Hemline Indicator;

This theory suggests that the direction of the economy can be predicted based upon the average length of hems in that year’s new fashion lines. If skirts are short, markets are on the rise. Conversely, if skirts are long, markets are heading down.
The rationale is that longer skirts are worn when general consumer confidence is low, demonstrating fear and lacked spending. When skirts are short, consumer optimism and confidence is high, indicating a bullish market.

Though not a generally accepted indicator, major shows such as NYC’s fashion week do offer a unique perspective into the global psyche; where designers from around the world, working independently, come together to unveil that year’s designs. These designs are at least in part influenced by the culture and economy surrounding the designers.
In early 2008, from London to New York to Milan, reports suggesting the drop in hemline length were abundant… and so were the references to the stock market. Looking back to reports from 2007 and 2008, the headlines are eerily prophetic.

But his is the first time I’ve come across the Ecstasy Indicator.
I suppose, as the cowboy on the horse says in the TV ad “We’re living in modern times friend.”

Erm Karl d
I don’t think the purpose of this post was to critique NAMA but to illustrate the lies being used to sell it to the people. Lies and misrepresentations can be critiqued without providing the obvious alternative which is honesty.

Delighted to see an acknowledgment here that Nama is more a political vehicle than an economic one. This is an important fact that has often been overlooked by economists (and others, to be sure) in assessing the plan (not out of ignorance, I presume, but out of a desire to analyse the thing according to the claims being advanced on its behalf). So there is winning the argument economically, which Nama hasn’t, and politically, which it has, I’m afraid. Only the victory didn’t come with the vote in the Dail, it came when the opposition did nothing to force a general election. A new government, if it did nothing else, at least would not be invested in justifying/covering up its past failures.

On the question of ‘getting credit flowing’: the Government can have it both ways. When, inevitably, credit continues to shrink, the Government will insist on the narrowest reading of its claims for Nama – namely, as the Taoiseach says in that interview, “we have a system in place that seeks to ensure that banks are supporting [b]viable[/b] business propositions”. When the credit famine continues, it won’t be the fault of Government policy, you see, but the fault of all those unviable businesses. And it won’t be an objectively untrue conclusion, either, just inconsistent with what we were led to believe.

@ Mokabaybob: Thanks for turning up the ‘lights’. Now all we need is for the legislators (all of them) to remove their Gitmo goggles and ear-muff sets.

B Peter–ryan-1992420.html

Eamon Ryan on NAMA:
“The minister said the big issue with NAMA is how it works in developing assets. He said the bad planning of the past cannot be repeated.

“The really difficult thing is how it manages assets and developments,” he said.”

It is now fair to say that the Greens never cared about how ginormous the NAMA losses were. This never interested them. I believe this is the second time Ryan has said this. I wonder will FF blame them for all the NAMA losses?

“The minister has also defended the junior coalition party’s stance on NAMA after new Central Bank governor Prof Patrick Honohon said a greater level of risk could have been taken on by banks.

“The exact measures were different to what was proposed. The State gets paid first. Before any bank gets paid, the State has to get its money back,” Mr Ryan said.”

It is hard to be sure but I think Ryan managed to completely evade the question by being very convoluted. In response to the question why is there less risk-sharing than Honohan proposed he responded earnestly “but there is risk sharing”, but managed to say it in such a gassy king of way that it’s hard to pick him up on it. They’re slippery.

As for prosecutions in 2010 believe it when you see it. This government won’t give anyone a long sentence – they might sing. We need a bank inquiry now. 2009 will go down as the year of the cover up. Let’s hope 2010 goes down as the year of truth and justice.

Again, the point of Karl’s (Whelan) post was to illustrate the “mis-selling” of NAMA. You’re not generally allowed to mis-sell a financial product.

On Karl Deeter’s point, here’s a random idea on an alternative way of getting credit flowing. Govt issues €100k to each Irish citizen, resident in Ireland on Jun1 2009, who was not in debt on that date. Money to be deposited into a solvent bank.

Repeat as required.

Sounds daft, doesn’t it. But you immediately create deposits, liquidity, confidence, good deposit starts for asset buyers, etc. You don’t create the same kind of moral hazard.

Heck… it might even work, and a good spin doctor could certainly put together some good sound bites for it.

Mr. Corcoran also wrote in 2009;

……….WITH a grim inevitability, the wheel is coming around. This time next week, it will have turned full circle. The Taoiseach is finished. Within months, maybe weeks, there will be a new leader of Fianna Fail, bringing to an end perhaps the most ignominious era in the history of the party.
………… Cowen is a goner. It will be a sad end for a decent man, but an inevitable outcome for a politician who was never up to the job, who has failed at what he was elected to do, which is to lead — the most essential requirement.
………….. He has only himself to blame. From the outset, Cowen ruled the old way — by fear and diktat, rather than by consensus and charm. In the process, he alienated half of the Cabinet, and it is this half which will eventually do him down, to be replaced by one among them………
…………It is an indication of just how behind the curve Cowen was that he chose Brian Lenihan on the brink of the greatest economic crisis of our time, the handling of which, generally — indeed specifically — has been so ignominious as to perhaps have tarnished for all time FF’s reputation as the party of government.
………..Yes there is a worldwide recession, but in Ireland we have, on top of that, a recession of our own making — the result of policies followed by FF for 12 years, a crucial four years of which Brian Cowen controlled the nation’s purse strings. It is for that, more than his belated efforts to try to retrieve the situation, that the Taoiseach is now being humiliated.
………..The Taoiseach is finished. How Brian Cowen reacts will tell us a lot about him. I expect further arrogance, more hubris; if that is how he reacts, the retribution will be fatal, and it will come from within. The Taoiseach who never got a mandate to lead will be forced to accept the mandate thrown at his feet on Friday.
You would wonder if Mr. Corcoran has personally changed his views so drastically on Mr. Cowen, or if Mr. Cowen has made another late night visit to the resident of No. 2 Fitzwilliam Square?
‘Cowen Backs Bertie, says End Tribunals.’
Personally, I think Mr. Corcoran is simply a journalist who writes what his editor Mr. Fanning asks him to.
Reminds me of a story I once heard about the actor Robert Mitchum, who made more than 150 movies in his time, many of poor quality. When asked “why did you make so many bad films,” he replied “because I’m the biggest hoor in town.”
Speaking of Mr. Fanning, editor of the Sunday Independent, here is an interview he conducted with Denis Brosnan – former CEO and founder of Kerry Group – I think it is an excellent piece of journalism covering what happened, what are our options and what lies ahead (naturally when you get two Kerrymen talking you are bound to come up with superior wisdom).
They say you can buy brains (accountants, lawyers, economists, doctors etc.) but common-sense is something which is part of you. You either have or you don’t and Mr. Brosnan has it in abundance, as Mr. Fanning illustrates here.

@Cearbhall O’Dalaigh
About half of the commentators and almost all the business journalists in The Sunday Independent have been very good. I’ll leave it at that. The Irish Independent is now leading the charge for a bank inquiry and I have seen some very good articles in The Evening Herald about the banks.

Unfortunately The Irish Times continues to languish under the yoke of Geraldine Kennedy. The tragedy is that if NAMA was ditched and sane policies pursued we would have more houses sold and more property advertising. Prosperity and falling prices will generate demand. Putting a giant floor under the housing market, as our finance minister desires, will leave prices artificially high (but only in the short-term) and will act to reduce house sales and therefore property advertising. Simple economics: if you keep the price of a good artificially high less of it is sold. In addition, by keeping rents artifially high both before and after it began NAMA has destroyed thousands of jobs and will destroy thousands more. Finally, by keeping house prices high we are keeping the cost of living high when we desperately need to lower it.

In the long-run you can’t buck the market. NAMA may prop up house prices in the short-run, but it will be at devastating cost. It will never prop them up in the long-run. In the long-run price will be determined by supply and demand.

In the long-run you can’t buck the market – but the powerful can rig it. We could well see further massive state intervention at additional gigantic cost, perhaps through a huge programme of house demolition. That is the plan with the oversupply of hotels – why not do the same with houses? Our ruling classes would probably prefer to knock down houses to keep us renting from them then allow us to buy our own cheaply. Existing home owners will see the value of their acquisitions preserved, so they will be in favour.

I have a hunch that the Green Party see NAMA as a mechanism to knock down houses in rural areas and focus development in urban centres. Higher density, less commuting, more public transport, lower carbon emissions etc etc. Green crony capitalism – it would be ingenious!

The Greens have proved astoundingly useful to FF. Without all the Green foliage they would never have made 2009 the year of the cover up. My belief is that the Greens will prove even more useful in the years to come.

But this will all be at truly staggering cost. This is the economic costs part of my title and it could potentially be as large as the €65 Billion NAMA is forecast by Morgan Kelly to cost directly.

What a pity that The Irish Times went missing just when it was really needed. I am afraid that Geraldine Kennedy is likely to be immortalised for posterity as myhome.editor.

Even if credit were to flow, will it make up for the withdrawal of capital from Ireland to pay interest and repay capital borrowed for NAMA?

This will be 100,000,000,000 Euro rounded up, over twenty years or so. To balance that, of course, we have all the unfinished developments and those that could not get tenants, when the economy WAS BOOMING, which will be snapped up for cents on the euro. Nowhere near enough to off set the capital leaving the country.

Some of the geeks reading this might fill in the long dark nights to come by playing with figures on this?

Japan seems to be doing well? NOT! It decided to bail out the banks by leaving the poisonous assets alone. At least it did not borrow its GNP to play hide the toxic crap with them, and spend 4,000,000,000 in middle class welfare payments making paper while it did so. But that is the Japanese, they aren’t as smart as the Irish … ?

Sorry, omitted link for Fanning Brosnan interview.

Aengus Fanning: “The mood is very down. In previous recessions, people had come from a knowledge of hardship and now there’s a generation who don’t know what to make of it at all.”

Denis Brosnan: They say ‘I’ll do a three-month course in Fas and then we’ll be fine’, and you’ve got to say ‘but hold on, there will be no job for you for the next few years, let’s hope we can do something whereby you can work again’. That will take leadership, but maybe more than leadership. It will take a seriously thought-out long-term plan. There will be no instant solutions.”

AF: “Someone said ‘we need leadership first and then the patriotism will follow’. In Ireland, people are very much following their own self-interests. There doesn’t seem to be much patriotism about in the sense of any kind of feeling of give and take.”

DB: “Nobody knows where the figure will finish but there’s certainly going to be a very high number of unemployed, so you’re back to the system where there is only so much work to go around in Ireland. Is patriotism where everybody should be on a three- or four-day week to give those who are out of work an opportunity? Traditionally in the capitalist economy you have those who work all the hours and you have those who are unemployed, but as you move onto the levels of one in five or one in six unemployed, you have major difficulties. It’s grand to tell them they may be patriotic but they’ve to get up every morning and realise there’s nothing to do.”


Do you honestly think that informed commentators and business people believe NAMA is going to get credit flowing on tap, just like in the good old days of reckless lending, or that they think the banks aren’t going to screw them for the next 10 years? I think that if you parse the official statements the Govt stays within the lines that NAMA is a prerequisite and part of the solution rather than a magic wand in itself.

However, even one takes their statements as you do, do you really think that the Govt spin machine has fooled the nation into thinking that NAMA is a magic bullet to provide credit? I haven’t met any of these duped people.

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