Today’s Irish Times carries an extensive essay by John McHale on the Irish banks: you can read it here.
Author: Philip Lane
The Economist website is currently featuring a debate among a number of well-known economists on the future of the euro – you can find it here.
OUTSIDERS
David McWilliams
Directed by Conall Morrison.
The Peacock Theatre
16 June-3 July
Previews 9-15 June
OUTSIDERS is a characteristically vivid, humorous and uncompromising account of what is going on in Ireland. In a unique theatre piece, McWilliams offers a narrative of the recent collusion between the insiders of the Irish political system and the financial sector.
McWilliams believes Ireland’s political and social divide is not so much about rich and poor, young and old, urban and rural, but about Insiders and Outsiders. The Insiders – found in every village, town and city – are those with a stake in our country who believe that today’s status quo must be preserved at all costs. The Outsiders – who might live next door – are those who realise that the status quo is part of the problem.
In Ireland every time there is a crisis, the Insiders get stronger, not weaker. Far from losing power and paying for the chaos they caused, they tighten their grip on the country. In contrast, the Outsiders are excluded and left to fend for themselves. That is what happened in the 1950s and the 1980s and it is happening again now. But there is an alternative. OUTSIDERS is about the alternative.
While the others cheered the boom, only one economist accurately predicted the collapse and mess we find ourselves in. He told you the truth then; he’s telling you the truth now.
Tickets: €14 – €22; 8pm, Saturday matinee 2.30pm
For more information please call the Abbey Box Office 01 87 87 2222
Abbey Theatre
www.abbeytheatre.ie
Morgan Kelly’s recent Irish Times article covers a lot of ground; this post is just about a single dimension of his contribution.
One point he makes is to look at the US TARP:
We can gain a sobering perspective on the impossible disproportion between the bailout and our economic resources by looking at the US. The government there set aside $700 billion (€557 billion) to buy troubled bank assets, and the final cost to the American taxpayer is about $150 billion. These sound like, and are, astronomical numbers.
The estimated cost of TARP has fluctuated quite a bit over time (the US Treasury helpfully releases valuation updates four times a year). The most recent release is from last Friday, with the current estimated cost at $105.4 billion. It is especially noteworthy that the TARP components related to the banking sector per se are projected to make a profit, while the main losses relate to AIG, assistance to homeowners and assistance to the US automobile industry.
The release is here (see also the links there to the underlying calculations).
Of course, the realised fiscal cost of TARP does not provide sufficient information to judge the overall effectiveness of TARP, since it is important to take into account the impact of early repayment of TARP funds on the behaviour of US banks, plus other broader factors.
Finally, the main point remains – the size of the Irish banking intervention (relative to the size of the economy) is much larger than the TARP, reflecting the much more generalised banking crisis here.
The IMF has released a new Staff Position Note that addresses the challenges in establishing a financial supervisory system that is capable of saying ‘No’. You can download it here.