Can I have your opinion please:
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I’ve just been listening to Morning Ireland discuss the NAMA Business Plan published last night.
I’ve been questioning RTE’s objectivity and journalistic integrity for several weeks now, so it was no surprise to hear the first ‘expert’ reaction this morning praise the plan. Why does Prof. Ray Kinsella consider it an impressive plan? I wasn’t convinced but then I wouldn’t be an impartial observer. In the interest of impartiality on the part of our national broadcaster, a second commentator with a more critical view would be the least I could expect. But Business reporter Emma McNamara, insisted we focus on the positive. Indeed, Emma, lets, and disengage our brains completely from reality. To be fair to Prof. Kinsella he did warn of the opportunity cost associated with NAMA and the consequent reduction in public services that will naturally ensue.
The debate between Richard Bruton and Frank Fahey was suitably partisan and not likely to help the general public make an informed decision. With the publication of the NAMA business plan, the unsinkable HMS NAMA gets a significant step closer to completion. And the focus of debate now shifts onto a single number: 20%
Experts will be rolled in, and government rhetoric will hang on, the ‘reasonable’ and ‘prudent’ assumption that only 20% of the 77bn in loans being transferred to NAMA will not be recovered. I humbly suggest, that if one was being prudent, one would look to recent cases such as the Zoe Group and the Dublin Glass Bottling site, the former losing 85% of its value and costing the State €90m in so doing.
77 TDs voted for the NAMA Bill last night, 71 against. To overturn the Bill will require 4 TDs to vote for a General Election, knowing that probably half of their colleagues won’t be coming back. The chance of that is probably the same as NAMA only losing 20% of its loans, practically zero.
Unlike its predecessor, which disappeared into the icy depths of the North Atlantic in just a few short hours, we will have to watch the HMS NAMA slowly, and painfully, sink over the next ten years, bringing much of the real economy in its wake.
God save this ship and all who sail on her.
It’s been a hell of a political baptism, can’t remember the last time I worked so hard. Never in my life have I done a week of all-nighters, surviving on three or four hours of sleep per day. Hence yesterday was a wipe-out and opportunity to be with family and recharge the batteries. And reflect on what just happened.
Yesterday (Sunday Oct 11th), over ninety decendents of William (b.1853 d.1939 ) and Ellen Rourke, formerly of Rushin, Co. Laois, my great grandparents, gathered to remember and honour them. As you might expect, the day kicked off with Sunday mass, and unlike usual, it was almost a religious experience. I couldn’t be described as religious and I’m certainly not a regular mass attender, but I couldn’t help being struck by yesterday’s gospel as the priest read out:
“Good teacher, what must I do to inherit eternal life?”
After Jesus had confirmed that the man had been obeying the ten commandments, he said:
“You are lacking in one thing.
Go, sell what you have, and give to the poor
and you will have treasure in heaven; then come, follow me.”
The man realised his principles only went so far, and Jesus observed:
“Children, how hard it is to enter the kingdom of God!
It is easier for a camel to pass through the eye of a needle
than for one who is rich to enter the kingdom of God.”
The priest in his sermon went on to tell an anecdote about some of his parishoners, a retired couple in their late sixties. They got a call from a bank in 2006 asking them if they wanted to take out a loan for €25k to buy a new car or improve their home. They told the salesperson that they couldn’t take out a loan as, on a State pension, they would never be able to pay it back. The salesperson told them not to worry about it, that they knew they were good for it. The couple sensibly declined and told this priest that if they are getting calls from banks offering them to take out loans for which they could never pay back, then the country was surely ruined.
For fear you might think I’m a religious zealot as well as a green one, I shall quickly explain that I look on the Gospels from an anthropological and sociological perspective. Why would it be that a society would promulgate or attempt to inculcate such a sentiment into its members? While you’re reflecting on that I will continue with the main focus of my post.
I thought it would be useful to reflect on the week that’s been and offer a personal (and therefore incomplete) narrative on how the story unfolded and how we’ve ended up where we are. My involvement in Greens Against NAMA precipitated over a series of meetings and chance encounters. I went along to the NAMA event organised by Arthur Doohan on Sept 11 and came away thinking, if all we lose on NAMA is €7bn then it will be a small price to pay to get our banking system running again. The following week I heard John Gormley debating with George Lee on Radio 1 lunchtime news, that we only need a 10% increase in property values over the next ten years to break even on NAMA, and I was incensed. I was incensed because I had heard him only three months earlier, back in late June, on the final episode of Questions & Answers, tell Eddie Hobbs, and the country, that Peak Oil would end economic growth. If you accept the Peak Oil hypothesis, as I do, then you can’t accept that NAMA will break even. This motivated me to prepare a video clip on YouTube highlighting this contradiction. A post on the Green Economy discussion thread by Pat Fitzpatrick and a chance meeting with Prof Brian Lucey in Newbridge while canvassing with Ireland for Europe motivated me further. Knowing my views on Peak Oil and NAMA, Arthur Doohan asked me to participate in a short video he was making on NAMA. While shooting the interviews I met with Peter Mathews, also being interviewed, and a banking expert. This was a personal turning point. Since that day, the same day the country was going to the polls to decide Lisbon, Peter has generously given me several hours of his time to properly understand our banking crisis, what NAMA is, why it won’t work, and an alternative we should at the very least be considering, although I believe we should be implementing. One of those hours I spent with Peter was with my video camera and I’ve broken down the interview into five short parts that will give others the opportunity to hear what I did. I now had reconciled my head with my gut.
While developing an understanding of our banking crisis, NAMA, and its alternatives, was a satisfying learning experience, watching the politics in the run up to and running of Saturday’s convention, was a learning experience far from satisfying. Not because I didn’t learn, but because of what I learnt. I watched a small, badly organised group, rife with internal divisions, the G5 (the five constituency groups that called for the convention on NAMA) and GAN, go head-to-head with the Green Party machine intent on making sure that NAMA would not be the reason it would be going into a General Election. It was somewhat flattering to read Niamh Connolly in yesterday’s Business Post saying “GAN managed to punch well above its numerical weight.” I think we should have done better, 189 votes to reject NAMA, or 31.3%, while sending a message, needed to be louder to not be dismissed.
The message coming from the membership out of the Athlone preferendum, was that NAMA should not pay more than ‘current market value’ (CMV). The G5 called Saturday’s convention to give the party leadership a mandate on the issue of NAMA. If the results of the preferendum had been borne out, the mandate would have been NAMA at CMV. The only reason to do NAMA is to pay over CMV, so a mandate to do otherwise would have sent the government back to the drawing board. The party leadership, seeing how their hand had strengthened, decided to use the convention to wrangle new concessions out of Fianna Fail, with the threat that they needed the membership to approve by 2/3s to really scare FF. It was a deftly played game of chicken with their partners in government. However, it also required knocking the NAMA challenge from within on its head, as the party leadership has unfortunately bought the Lenihan plan. With the kind of skill I would expect from FF, they scripted and stage managed Saturday’s meeting consummately. Dazzle the audience with the fireworks of the PfG while sneaking NAMA in around the back. Throw in a healthy dose of scaremongering for a General Election, and Enda Kenny as Taoiseach implementing NAMA without a Green agenda (on which more anon), and the NAMA debate was over before it even began. People voting for the PfG were simultaneously voting for NAMA and only about a third of the people stayed to listen to the NAMA debate.
Needless to mention, the opposition parties, and the largest opposition party in particular, has done this country a massive disservice by not putting its considerable resources to better use in coming to a proper understanding of the problem and articulating a credible and convincing alternative. And thereby allowing the ruse that there is no alternative to become embedded in the general publics’ consciousness.
My own experience canvassing the room was that large sections of the party had been bought off in the Programme for Government, again an impressive tactical move on the part of the negotiators to play the membership against FF to negotiate the concessions. Animal welfare supplied over one hundred votes, no university fees bought the Young Greens. I had an interesting, if frustrating experience canvassing the Young Greens. ‘I don’t understand NAMA but I’m voting for it’ would be a reasonable summary. Early in the day I met a man in his late 40’s with a young child in tow, he asked me was I mad to vote against NAMA, and he was quite animated. I later offered him the opportunity to talk to Peter Mathews, he declined saying he’d already made up his mind. I also overheard a small group, saying with strong conviction, that this country needs credit to start flowing again to small businesses and we need NAMA to get that happening. At my family gathering yesterday I met two cousins, both in banking, who confidently assured me that NAMA would in no way get credit flowing again. The banks are bust and NAMA will not fix them, the economy is declining and NAMA will compound the problem massively, possibly irreversibly.
The party leadership had put it to the membership that NAMA was the price to be paid for staying in government. The argument being, ‘Trust us, we know what we’re doing.’ I must admit I too was impressed with the argument. I think Gormley and Ryan are the best guys for their brief right now and I am loathe to give them up. But if they were really smart they would have managed to get their cake and eat it and gone back to FF with a mandate to stay in government but reject NAMA.
As for the protests outside? After the convention we retired across the street for some refreshments and the soccer match was going on in Croke Park. It occurred to me that there was probably 70,000 people at that match while there wasn’t close to 70 outside the RDS to protest at the decisions being made inside. I cynically concluded that maybe the Irish people deserve NAMA. It came to me on the drive home that I was being cynical. We elect people to our parliament and pay our taxes to pay them well (excessively?) and resource them to make informed decisions for the common good. We have a right to be able to trust our politicians. And they have clearly abused that trust. However, with that right comes a duty to ensure that they are trustworthy and hold them to account when they are not. I fear in this case that by the time the public figures out what the politicians have done, it will be too late.
The real tragedy is that if the party had invested the same ingenuity and time it invested into passing the Programme for Government and neutering the NAMA debate, into devising a scenario to go back to Fianna Fail to re-negotiate NAMA, we could truly be celebrating a win-win scenario. It would have required convincing the Green Party parliamentarians of the folly of NAMA, which is work to be done, but with a mandate for the PfG and to reject NAMA, do you really think Fianna Fail would have gone to the electorate?
We are where we are. If John Gormley’s concluding remarks to the membership on Saturday are sincere, that he will continue to work with members of the party opposed to NAMA to improve it then we have an obligation to continue to lobby him. Although the extent to which you can get the wrong tool to be retro-fitted to do a job it’s not designed to do remains to be seen. And I’ve little reason to believe even the strong rhetoric of David McWilliams in yesterday’s Business Post will chasten the vindictive stubbornness of Brian Lenihan. The cynicism with which he rolled out the EU Commissioner on Friday to make sure he had scared the bejaysus out of us into swallowing his time-bomb (to mix my metaphors) is astounding. The ECB is going to make at least 1.5% on the money they’re loaning us, a 0.5% premium over its regular customers, and inevitably, a lot more. Why wouldn’t they want us to hurry up and close the deal. Almunia was simply the salesman showing up to close his deal.
Meanwhile, I’m back at the drawing board wondering how we prepare the nation for energy scarcity with the NAMA monkey on our back. As the Kerryman is known to say, if I wanted to go there I wouldn’t have started from here.
Message about Nama from Emer O’Siochru : Feasta Executive Member
Democracy is a funny thing. A decision that will have far reaching implications has come down to a couple of hundred of concerned environmentalists meeting in a hall tomorrow. Pundits in the media say this is highly undemocratic, ignoring the fact that the alternative is a much smaller room full of politicians making the decision behind closed doors. The Irish people did not know that they were voting for Nama in the last election; – there was not even a banking crisis then!
So what mechanism do we have for people to have a say in really crucial decisions that spring up between elections? Referendums are a good way to do it to be sure, but we have seen the difficulty of understanding and deciding complex issues in the Lisbon vote. We need a way to disentangle the fundamental political issues from the technical and then a way to allow people to input in a more complex way than a simple yes or no vote.
Most any environmentalists amongst you will know that there is such a mechanism, the procedures for assessing the impact of policy on sustainability – the Strategic Environmental Assessment or SEA. Instead of adding to the pressure on hapless Green Party members to decide on Nama, I make a plea that they be permitted to pass that chalice – to an SEA process. That way we can all help to make the right decision. A compromised government and a lazy media is trying to tell us that there is “no other game in town” or that “Nama is a done deal”. This is because responsible Nama opponents stepped into the background to allow for a clean debate of the Lisbon Treaty. For their pains, their patriotic action has been spun as a capitulation by the anti – Nama movement.
To my knowledge, nothing has happened or been said that has changed their minds or mine. The 46 respected economists who signed the original article to the Irish Times still believe Nama is fundamentally flawed and unfair. They have been joined by many others including Nobel prize winner Joseph Stiglitz.
Most Irish environment activists are very concerned about Nama. Eight national environmental NGOs, members of the Irish Environmental Network called for a SEA or Strategic Environmental Assessment of Nama. Except for the veto of one NGO member, the new Environmental Pillar of Social Partnership very likely would have called for the same thing today. The NGO member used the veto, not because they supported Nama but because they were worried about influencing the internal decision-making of a Political Party. But I think most committed environmentalists, and such are Green Party members, would prefer to be fully informed (in the spirit of Aarhus) at this crucial time.
An SEA requires that a number of options for fixing the banking system must be researched – not just one; information must be shared with the social partners and civil society so people can participate fully and the impact of different options fully explored before a decision is made.
The SEA is an internationally developed protocol to make sure that decisions are not rushed – especially critical decisions in a time of emergency. Ignoring the SEA checklist is like a pilot in a jet aircraft ignoring established safety procedures when the engines cut out in mid flight. The fact that that ‘there is a crisis’ or that ‘there is little time’ would not be acceptable as an excuse from the pilot in that situation any more than it is an acceptable excuse by the current government – especially a government with Green Party Ministers.
The complexity of the issues is not a reason to take on trust any particular voice. I can understand how the the Green Party elected members got pulled down a particular path by the apparent confidence of senior civil servants, the experience of banking advisers and the panic of their partners in Fianna Fail. No less a man than President Obama got pulled into agreeing to the Tarp Plan in the US – a similar plan to Nama to purchase toxic assets. But as time passed, better judgement prevailed and a different path was taken in the US. Sadly, Green Ministers lacked the self belief to call a halt in order to fully examine other options before sealing this irrevocable deal.
So it is now down to ordinary Green Party members.
Tomorrow will decide whether €54 billion is paid for assets that can be had for €24 billion- without depriving bondholders of a penny. This is real money and will cost us real money in taxes for a generation. I believe that Nama is a sleight-of-hand gift to bankers and their friends, wrapped up in wishful thinking and sprinkled with threats. For the taxpayer to break even, interest rates must stay low and property values must rise in a truly fairytale fashion. It leaves nothing in the kitty to help with the unbearable debt of ordinary families and many businesses. It postpones the property price drop that the economy needs to restart. It blocks all reform of planning and taxation that might potentially reduce the ‘long term economic value’ of its property portfolio. That includes reforms that would divert investment into productive businesses that would prepare us for an energy scarce and climatically unstable world; reforms that would create jobs for our young people and a secure retirement for our old. The lame risk share and weak levy thrown in at last minute does not change any of this.
But why should anyone take my word for it? Nama is not the only worked-out solution to the banking crisis; all should be assessed under an SEA.
Doubts have been cast that ECB would give us the same deal as for Nama bonds for any of the competing options to Nama developed by non self-interested economists, bankers and businessmen. Why can’t we ask them as part of an SEA?
Fears have been expressed that the bond market will not lend to a government owned bank in the same way it would support the Nama buy out. Why not find out for certain as part of an SEA?
Taxpayers and citizens may be happier to face up to their loss of wealth in property if they were partly compensated by a gain in bank shares. Why not ask them as part of an SEA?
Instead, ordinary Green Party members are in the privileged but unenviable position to decide on a single option, Nama. This is not fair on them or on us. But if any are reading this, please decide so that we get a say too.
We are on the last lap of this great debate. Here is a short reminder of the arguments presented in our videos.