Stiglitz with More On NAMA!

October 15, 2009

I recommend David Mc Williams series ‘Addicted to Money’ RTE series as a victory of substance over style:) Beneath the distracting pseudo enhancements of the narrative presentation e.g. speaking economic theory from an operating theatre busy with a heart operation, though a staged setup, how distracting is that? KISS is the operative word, keep it simple stupid. The substance of McWilliams documentary style investigation into the global economic crisis is well worth any minor distractions. Catch it if you can!

To his blog on the above series I’ve added this comment:

I agree with ‘Irish Pancake’ above,
I’ve a minor concerned citizen blog at and point out: ‘You think spending is out of control now, wait till NAMA gets going and the real blood letting of the Irish tax payer begins.

Hank Poulson, US Treasury Secretary, 2006 – 2009, on 14th October, 2008 announced that the US to restore confidence in their financial system, would ‘purchase equity stakes in a wide variety of banks and thrifts’ using diverted money previously earmarked for the purchase of toxic assets.

 This followed the example alongside the bank guarantee scheme set by Gordon Browne,UK Prime Minister and Alistair Darling, Chancellor, in their response to the financial crisis.

These models have averted financial melt down and we should follow them even if it means in certain cases equity stakes that will lead to nationalisation of some banks.

For both UK and US tax payers there is some hope at the end of the tunnel their investment will be rewarded.

This is a successful model that has restored confidence that has avoided meltdown. It will also allow these governments to proactively regulate the banking system to avoid the mistakes of the past.

 Both the US and the UK have corrected the mistakes embodied in the previous TARP approach, NAMA sets out to repeat them! .”

Americans and UK ditched TARP in favour of a better UK model of equity in return for investment .

Its a minor consolation to know Lenihan’s career will be levied with NAMA (Not Another Mess Again) failure!

NAMA turns Ireland INC into a Banana Republic transferring taxpayers’ funds, the new poor, into the coffers of the rich, bankers, developers. This is criminal!

Maybe Lenihan and Cowan should call Poulson to get a new briefing. Poulson:
“Brian C and Brian L, forgot to tell you guys, we actually don’t follow a NAMA TARP model anymore, NAMA TARP will sink you! Goodbye”

This is a stange week for NAMA. We have the latest Government update, about which more in next post, plus the visit by Professor Stiglitz whose comments on NAMA covered in post previous to this one, have had a mixed response. Stiglitz has been condemned by Lenihan and Cowen, see above, but Richard Bruton of Fine Gael has claimed Stiglitz as one of Fine Gael’s own:

“Fine Gael spokesman for finance Richard Bruton TD welcomed Stiglitz’s comments.

“Together with George Soros, Professor Stiglitz is one of the prominent advocates of Fine Gael’s ‘good bank’ solution to fixing the banks,” Bruton said. “He joins financier Dermot Desmond, commentator David McWilliams, and Michael O’Sullivan of Credit Suisse Private Bank, among others.

“Professor Stiglitz has rubbished the scaremongering by the Government and its banking friends that Fine Gael’s tough policy on the banks will scare off private investors in Ireland and make it difficult for the Government to borrow money.

“On the contrary, Professor Stiglitz has confirmed our view that protecting the taxpayer from banking losses is the best route to restoring Ireland’s economic reputation and creditworthiness. Nobody wants to lend to or invest in a country that caves in so easily to powerful financial interests,”  Bruton said.

While Richard Bruton TD spokesperson spoke brilliantly this morning on Morning Ireland against the valuations in the current Government information( next post on NAMA  Draft Business Plan ) on NAMA, it would appear from previous post on Stiglitz that Stiglitz is more in favour of Labour’s investment for equity approach, that a bank such as Anglo Irish should be let fail, that AIB and BOI should receive investment from the tax payer up to the level of nationalisation, that other banks be helped in return for equity, the Alistair Darling(UK Chancellor) and Gordon Browne and current US approach!

We don’t need NAMA! With the above approach, the banks should be able to sort out their own mess with our Bank Regulator overseeing our equity stake with the help of the NTMA national treasury management agency. This approach could succeed in returning our economy to health in the short to medium term, the NAMA approach threatens to sink us!

next post, NAMA Risky Borrowings!


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