BaNAMArama

As Ireland struggles to correct the problems with its banking sector, the proposal by the government to establish the National Asset Management Agency (NAMA) has become not just a policy measure but a football being kicked around rather aggressively by the various players, and those who think they are or should be players. Wrapped into this is a feeling of popular anger, sustained occasionally by populist opportunism, at the behaviour of bankers.

For me at least, the intervention of 46 academic economists in the debate didn’t add much. From the article in the Irish Times explaining the background to this intervention, it appears that the key motivation was to provide a platform for economists as a kind of pressure group, which is in my view a doubtful use of academic status, and adds to the impression that the whole discussion has been compromised by the colourful array of vested interests of the participants.

It is hard to have confidence in the quality (as distinct from quantity) of public debate on this issue. But as this may be the biggest decision this country needs to make, that may be serious. It is time to take out of the mix the crescendo of judgement and condemnation and posturing, and to focus on national interest and needs. If we need to feel good about the personal treatment of bankers and property developers, let us find another forum for that. Having a viable banking system is a critical need for the economy.

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18 Comments on “BaNAMArama”

  1. Vincent Says:

    There is a bit in the middle of this that I cannot plum at all.
    What has ‘tome’ to do with anything

  2. Vincent Says:

    In Ireland we have long memories, too long sometimes. But you cannot blame many people for being suspicious when the Tax Collectors have for the last number of years been getting huge amounts from 1980s dodgers. And this with Lord knows how many amnesties.

  3. Cian Says:

    You seem very quick to criticize academic economists on all things. But it seems only sensible that they would give their views on what is seen as an incredibly poor direction, given that in many cases this is an area closely related to where they study. It is no more them acting as a pressure group, than academic lawyer, or practicing lawyers for that matter, are when giving their opinion on new pieces of legislation.

  4. Liam Delaney Says:

    I didn’t sign the petition Ferdinand but I think you are way off on this one and speaking about something you are poorly informed about. The upcoming bill is one of the most important single decisions made since the state was formed. Without particularly Karl Whelan’s interventions, it would have gone through mostly on the nod, as there is no journalist with sufficient experience and knowledge of these systems (and time available) to fully dissect this complicated issue. I am not sure petitions are a useful tool but I am certain that many of the people who signed it have been instrumental in placing some degree of external scrutiny on this process. You should be very careful about lending your weight to the real vested interests at play here who will try to discredit anyone who really scrutinises what is being done to the future of our country and particularly upcoming generations.


    • Thanks, Liam, but you may have misunderstood where I am coming from. I don’t object at all to scrutiny being applied to the proposal, nor am I particularly backing NAMA. However, too much of the commentary has looked like posturing, and has sometimes undermined those making the comments. So for example, I have no problem with Brian Lucey putting forward a critique, and he is well qualified to do so. But once he tries to sign up 200 others to back him, it looks like a vested interest campaign rather than an argument. If his points are good, they get no better because others add their signature. As a result – and because there is in the public mind a certain amount of fog obscuring the connection or otherwise between the Lucey-et-al arguments and those of the Opposition – this has not served to enlighten anyone. That’s my point.

      • Liam Delaney Says:

        I can’t for the life of me figure out what vested interest you think unites the 46 people who signed that document. We are not going to get far with this conversation. You have indicated you don’t think much of the economics contribution to the NAMA debate. As an economist myself who is not an expert on banking, I have to say that Karl in particular has transformed the debate completely and has been doing far more for the average taxpayer than many people who spend a lot of their time claiming to be helping them. Much of the material that comes into the public debate on NAMA via the press is pure drivel, soundbites concocted in backrooms by PR firms reproduced by an uncritical media and public sphere. We have to keep pushing this debate and offer some degree of support for the people who are trying to keep it alive. I would suggest you read some of Karl’s posts on irisheconomy or some of his articles to get what’s at stake here. There is an issue about whether some of the NAMA critics should be more diplomatic when making their arguments but it is a very minor one when compared to the toll that NAMA may exert on, for example, some of the students who will be graduating from DCU and UCD in coming years.

  5. Aoife Citizen Says:

    I hope when all this is over we can quietly shut down our economics departments, or, at the very least, make them live on their share of the MBA income.

    • Liam Delaney Says:

      I can’t for the life of me figure out what vested interest you think unites the 46 people who signed that document. We are not going to get far with this conversation. You have indicated you don’t think much of the economics contribution to the NAMA debate. As an economist myself who is not an expert on banking, I have to say that Karl in particular has transformed the debate completely and has been doing far more for the average taxpayer than many people who spend a lot of their time claiming to be helping them. Much of the material that comes into the public debate on NAMA via the press is pure drivel, soundbites concocted in backrooms by PR firms reproduced by an uncritical media and public sphere. We have to keep pushing this debate and offer some degree of support for the people who are trying to keep it alive. I would suggest you read some of Karl’s posts on irisheconomy or some of his articles to get what’s at stake here. There is an issue about whether some of the NAMA critics should be more diplomatic when making their arguments but it is a very minor one when compared to the toll that NAMA may exert on, for example, some of the students who will be graduating from DCU and UCD in coming years.

    • Liam Delaney Says:

      Aoife- are you really trying to get academic departments closed down because some of their members have taken a controversial public stance against a potentially disastrous public policy?

    • Liam Delaney Says:

      Apologies for accidental double posting.

      • Aoife Citizen Says:

        Well I couldn’t find any evidence that economics as an academic subject repays the investment made in it and while I acknowledge that there is some benefit internationally to economics, we are a small country and can’t afford blah blah blah.

        You see how it feels?

    • Liam Delaney Says:

      Ferdinand, to some extent you bear some responsibility for this silly notion that Economists as a group are attacking research and researchers, something that is echoed now in Aoife’s comments and leading to a situation where intelligent people are trying to attack a group of individuals for speaking out against a banking plan they honestly believe risks transferring tens of billions of euro from the taxpayer to private investors for no good reason. We should certainly have the “what have economists done for us lately” debate, but to raise this in the context of NAMA is deeply wrong in my view. I’m not even sure it belongs in the SSTI debate – I can never remember a single discussion that was helped by these types of debating tricks. It is perfectly legitimate for anyone claiming to be interested in “how scarce resources are put to competing uses” to ask what is the best way of funding research and whether we are achieving this ideal. It is also worth a continuous and detailed public debate about NAMA, and at present a small number of Irish Economists know more about this than any other group outside (and perhaps including) the people devising it. I, for one, am glad that they are weathering the insults to keep at this. The petition has had mixed effects on the debate, keeping the issue alive (which was likely the intended purpose) but leading to an ugly and stupid debate about the nature of the medium itself.

      Its not clear to me Ferdinand whether you object to Brian Lucey, the idea of a petition, the idea of academics vociferously arguing that a government policy is wrong, the fact that the opposition parties seem to be following closely what the critics are saying, or whether you have looked closely at NAMA yourself and have simply concluded that the government is correct in its assessment that we need to do this to get the economy going again.

      In the spirit of outreach and understanding, I will start blogging a little bit on why I think some of the current cynical views of Economics are based on outdated stereotypes and overreliance on banking and media economists when forming impressions on what academic economists actually do. Aoife, it is at least heartening to note that you will wait until the current crisis has past before disbanding the Economics schools. You might ask yourself whether the extra scrutiny that Economists will now get will only apply to ones that have been critical of things you like or whether nicer friendlier economists will be let off the hook.

  6. Donal_C Says:

    As someone living overseas and not well informed of the interests involved on either side, I wont comment about the details of the intervention. However, as for the process, I find the debate generally healthy. Academics are frequently accused of irrelevance or subservience to the authorities (see the Huffington Post article for info on the web of connections between academic economists in the US and the Fed Reserve:
    http://www.huffingtonpost.com/2009/09/07/priceless-how-the-federal_n_278805.html). It’s nice to see that some are taking a stand, and one that is particularly risky given the important role of the government in funding Irish universities. The opportunity to voice measured criticism of those in authority is at least one advantage of the tenure system.

  7. Sarah Says:

    Ferdinand I think you are way off on this.

    A “vested interest” is an interest that can benefit in some way. The academics cannot benefit in anyway from taking a public position on Nama – in fact – personally they are paying a price as the government spin doctors target them individually.

    Liam is right. The economists have to use the papers and the media because the journalists just don’t understand the issues – its so complex. They actually have a duty to explain all this to us – otherwise how would be understand it?

    And numbers DO count. If its just Lucey making the arguments then the spin doctors can dismiss him (as they dismissed David McWilliams, Morgan Kelly and as Bertie Ahern dismissed Alan Ahearne in 2007 – remember the suicide remarks?) They say “ah sure he’s mad”. But if you have 20 or 46 or 200 then its harder for the government to dismiss them ALL.


    • Hi Sarah – and your comments are always interesting! I don’t altogether agree with you here, however. The effect of a list of people writing in this way, at least for me, is not to suggest – ‘Ah, there are 46 of them, this must be 46 times righter than if it were just one’; but rather to make it look like professional bullying. If Brian Lucey (or anyone else) thinks they are vulnerable speaking out alone, then a much more effective way is to get a couple of others to put their own views into the public domain alongside his.

      I spoke about a ‘vested interest’ because I think there has been an attempt here to suggest that our economists have a special insight. With some notable exceptions, however, our economists under-perform. Putting a lot of them together doesn’t make me feel good.

      All of that having been said, however, I don’t really mean to be personally insulting, and as it happens I have a great respect for Brian Lucey.

  8. Liam Delaney Says:

    Some of my language above was a little more heated than it perhaps should have been. As usual, my full respects to the owner of this excellent forum. I would suggest at a later stage a full and open debate about the merits of economics and economists in society, perhaps one spanning lots of different forums (philip lane has already started some threads).

    I stand by the main thrust of my comments, namely that NAMA is deathly serious and that the debate being lead by some of those signatories, particularly on the Irish Economy blog, has been one of the most informed that I have ever seen on any public issue. I think many of us still can’t believe the level and quality of debate that continues to play out on NAMA on that forum. It is now read I believe by anyone with any serious position in Irish economic policy, perhaps not every day but certainly enough to keep up. It gets over 4,000 visits per day. It has been a revelation quite simply and one of the few positives from an otherwise dismal economic situation.


    • Liam, don’t worry, my main objective really is always just to stimulate debate. Being opinionated can prompt that more easily :). I don’t really mean to insult anyone. Nor would I want anyone to think that I have some campaign going against economists. As they say, some of my best friends are economists, including one or two I have criticised here by name. And your own contributions here and elsewhere are really interesting and helpful.

      I suppose what I am concerned about is that there appears to be a trend amongst at least some economists to see themselves as a pressure group – maybe pursuing what they believe is truth and justice, but that doesn’t make it better. I read too many ex-cathedra opinions these days, and that is not conducive to good intellectual debate and analysis.

      But my apologies for writing anything that might seem personally offensive. I can be an annoying git, as some know… 🙂


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