Monday, October 19, 2009

Economics 19/10/2009: A proud member of National Mediocrity

Sunday Sunday Business show on Today FM. Minister Lenihan commenting on the anti-NAMA economists (podcast here):

"What I notice about them is that there’s about forty of them. There is about two hundred economists in the state. Most of the rest of them have approached me privately and said that these gentlemen and ladies are wrong. But of course they are not prepared to say so publicly because in Irish academic class, people don’t criticise other people’s books. That’s part of our national mediocrity. ...If you look at the press in the United Kingdom or the United States, you’ll see robust academic criticism of others works but we’re reluctant to do it."

Karl Whelan has his view on this - read it here.

My view is a simple one. Want to have some criticism - compare publications records of Mnister's advisers to that of, ough, say Karl Whelan or Brian Lucey. Want to have some criticism - compare supporters and critics of Nama:
  • Stockbrokers and Irish Banks' economists - all with a major conflict of interest implied in their positions as their respective organizations will be the intended beneficiaries of Nama. In my books, this does not invalidate their points and analysis, but it does raise a question or two;
  • EU Commissioner who actually negotiated with Minister Lenihan Nama solution;
  • Ghosts of other - possibly independent - economists who have spoken to the Minister in private?..
  • 4 Nobel Prize winners, several senior faculty members from the top 5 Finance Departments in the world, and one former SEC Board Member;
  • 46 academic and practicing economists and finance specialists;
  • 4 authors of comprehensive analysis of Nama proposals (myself, Brian Lucey, Ronan Lyons and Karl Whelan - in alphabetic order) that provided more detailed and more accurate costings of Nama and alternatives than the one supplied by Minister's own staff;
  • 1 former banker - Peter Mathews - who has extensive experience in managing bad loans within a special division for such loans set up by ICC bank in the 1980s;
  • A range of independent economic commentators some with extensive finance experience in the past;
  • A number of top class finance entrepreneurs, including Dermot Desmond;
  • Hundreds of people from finance, international finance and economics who comment on this blog and the Irish Economy blog;
  • One Governor of the Central Bank who proposed significant changes to Nama that were subsequently taken out of context by His Intellectual Excellence's Government colleagues and reshaped into an unrecognizable watered-down versions to suit original Nama.
Not that excellence is measured in numbers (as Gallileo and Copernicus and many others have proven before), but you get the point.

As far as Minister Lenihan has a stomach to talk about mediocrity, I wonder how he feels sitting at the Cabinet table. Or how he feels about the Nama analysis being pushed forward by his staff - analysis that has been time and again proven as:
  • coming after the mediocre Irish economists put forward their figures; and
  • turning out to be wrong and proven to be wrong by the mediocre Irish economists.

One real sign of intelligence and excellence is ability to listen, seek truth and change your views/plans in response to overwhelming evidence that disputes one's original proposition. To date, after months of factual analysis by many of us, this Government has been showing complete lack of ability to do either one of the above.

Let us all be judged, then, alongside Minister Lenihan, as to where the real mediocrity in this country resides.


The Galway Tent said...

Mr Lenihan the lawyer disingenuously states:
"But of course they are not prepared to say so publicly because ...."

In Russia and in Ireland the true economic situation may be:

In what is effectively a one-party autocracy run by an invisible cartel only a non-tenured fool or a very rich fool would say anything publicly.

Paul MacDonnell said...

The notion that pro-NAMA economists are 'not prepared to [support NAMA] publicly because in Irish academic class, people don’t criticise other people’s books.' is the most precisely Orwellian thing I've ever heard in this country. The truth about people being afraid to speak out is exactly the opposite of what the minister suggests.

civic_critic said...

I appreciate your analysis and economic nous as applied to the issue of NAMA but one should hardly be surprised that the minister disregards everything you and other economists say and ploughs on regardless. NAMA is not about economics, it's a criminal heist. Perhaps if yourself and some of the other economists moved on from simply outlining its economic illiteracy and spoke in the kind of terms we hear from Mike Whitney, Mike Shedlock, Max Kaiser et al and described this in withering terms as a criminal endeavour by the local cartel of an international syndicate you might begin to make some headway, or at least some waves. This is politics not economics and so should be met with politics.

MK1 said...

I realise I dont count as I am just a Joe Soap but for the records I'm anti-NAMA ......

and anti- the government endorsed shenanigans that got us into this mess in the first place ..... !!


TrueEconomics said...

MK, welcome to the club - none of us count - Joe Soaps or Professors or whoever we might be. The critics of Nama have shown time and again that:
(a) Nama won't work to deliver what the Government hopes it will (so there is no real positive benefit to the economy);
(b) Nama will be a drag on economy and taxpayers resources for many years to come;
(c) Nama is morally, ethically and socially wrong solution;
(d) there are better alternatives to dealing with the banking crisis than Nama;
(e) the current leadership and its 'experts' and public officials cannot deliver accurate forecasts, estimates and evaluations of the proposed solutions no matter how much we pay them;
(f) Nama and the process of its implementation are affronts to democracy and the principles of proper governance.

And yet none of this counts. Instead of listening and trying to improve legislation, the Government is simply pushing it through, by indirect and direct pressure on electorate and analysts.

None of us count! And yet we have to keep our own dignity intact in all of this, even if this means voicing our disapproval knowing that it won't yield desired results.