Economics 26/08/09: Nama debate gone dirty

I have missed today's debate between Alan Ahearne and Brian Lucey, although as far as I understand Dr Ahearne failed to actually face Brian in this debate.

Having heard the 'debate' afterward and having obtained a letter from one of the Green Party parliamentary party members to a senior ranking disillusioned member of the party in which a venerable Green legislator claims, as Alan did today, that academics commenting on Nama with a critical perspective are not fully appreciative of complexities of Nama and are not offering any solutions to the porblems Nama is supposed to tackle, I can say the following:

I stand by my original estimates of losses expected from Nama. Alan Ahearne's quoted figures are based on thin air, as Dr Ahearne has failed to produce any evidence to support his assumptions or estimations, while my (and Brian Lucey's) balancesheet for Nama has been in public domain and under public scrutiny for over two months now,

Points raised by myself, Brian Lucey and Karl Whelan (and some others as well) about the lack of safe guards, stop0loss rules, transparency, accountability and ownership of Nama and its assets are not academic, they are as real as Dr Ahearne's salary in the employment of the Minister. Nay, they are actually more real, because families who will be paying for Nama deserve to be the rightful owners of Nama assets and deserve to have full access to Nama operations,

As far as I know, neither Dr Ahearne, nor his masters have offered any, I repeat, any clarifications as to the amendments they plan to propose for Nama legislation. In contrast, everyone can read my proposal for Nama3.0, Karl Whelan's proposals for changing Nama legislation, Patrick Honohan's ideas on how Nama can be fixed and altered, and so on. None of us have been paid for doing so, unlike Dr Ahearne who, having not failed to accuse us all of being 'academic' has (a) called us 'colleagues' (surely this makes his musings on the subject also 'academic', and (b) has managed to produce no new ideas on Nama beyond what his masters produced in the proposed legislation.

I am having a very hard time understanding how myself and other independent observers of Nama can be labelled 'academic' when the questions we raised about Nama are both immediately relevant to the issue of Nama operations and are countered from the opposing side by the nonsense of unsubstantiated numbers quoting and references to us 'not appreciating the complexities'?

Here are couple of questions sent to me by one senior policy person in Ireland with my quick replies to them:

Q: Apparently, in one of the debates, a pro-Nama person suggested that Banks nationalisation cannot occur before Nama is paid for because, while the ECB will do the swap for Irish government bonds as a reasonable discount, they will not give the same deal for a nationalised bank. Or if they do help us, they will insist on their pound of flesh i.e.they will do an IMF on us and we will lose all economic sovereignty. My questions about that are... a) is that really true...

A: It is true in so far as the ECB lending window is for private banks that are solvent. However, it is a technicality, since the ECB will have to offer lending facility to the governments as well. It simply has not been confronted with such a prospect before, but hey, there is always a first one.

b) if Irish government put their shares in Trust for taxpayers as per Nama3.0 - hey presto no link to government - does that get over ECBproblem?

A: Yes, it does, further, recall that I have argued that (steps 3 and 4) the Government can provide for private ownership diluting its own share holding in the banks, so the banks will be owned by a trust (Nama), plus two large groups of private investors, with the Government nowhere to be seen. We can even go further and include as shareholders in Nama some developers/investors by offering them shares in Nama in return for equity in their development projects written against the loans.

Economics 24/08/2009: Alan ''Please read me!!!' Ahearne

The hilarity of a personal Ministerial Adviser sending an article defending his masters' views to a Sunday newspaper was not enough for Alan Ahearne [see that story cover here]. Never mind his article addressed not a single point of criticism levied against NAMA. Alan actually had to send out an e-alert [well, of some 979 words that is] to a list of his "colleagues". The email implored them not to sign up to an article critical of NAMA until they read his own article published in the Sunday B-Post. Given the fact that the said article had no useful information content regarding any potential or alleged NAMA problems, it is hard to imagine why Alan would actually publicise his own "efforts" with Irish academics. Then again, he might be simply keen on publicising his own efforts full stop.

Alan clearly forgot three major things in that email:

1. He failed to include in the email recipients list the names of anyone actually critical of NAMA - surely a majour omission if his intent was to convince us to take another look at NAMA in light of his, then, forthcoming major contribution to the debate;
2. He failed to notice that since he became an employee of the Minister for Finance, he is no longer an academic, so sending an email to academics and saying "Dear colleagues" should really be slightly offensive to the academics, assuming they are really valuing their independence from the political interference (which is, of course, now fully embodied by Alan's position);
3. He failed to provide any real substantive arguments disproving NAMA critics' main positions.

So here we go - two pieces of work by Alan Ahearne, some 1900 words wasted between the two, and not a single coherent point of defense again NAMA critics... Gotta be a record for someone paid to do this kind of work, don't ya think?

Economics 16/08/2009: Alan Ahearne on NAMA - not an ounce of sense

Alan Ahearne has decided to produce a definitive defense of NAMA in today's Sunday Business Post (here). And I would have to respond. As usual - Italics are mine.

The first half of Alan's article is saying absolutely nothing - nothing as in nada, zilch, nul, nil. He simply outlines in a tedious and lecturing fashion a litany of trivial observations as to why a banks crisis resolution is necessary. He does not show that NAMA is either a necessary or a sufficient condition for crisis resolution.

"Nama is also designed to ensure that the resolution to the problem of legacy loans is orderly. Nama can achieve this outcome because it will be patient in disposing of property assets which it has seized from delinquent borrowers." This is an unproven statement that can be argued to be untrue as NAMA can and is being shown to be likely to produce a prolonged period of highly uncertain property markets with buyers and investors holding back in anticipation of future NAMA disposals of property. The longer NAMA holds these properties, the longer it will delay new investment in property in this country. The longer it will keep banks uncertain about future NAMA losses (which - as we were told - will be clawed back from the banks), the longer the mortgage holders will remain in negative equity, withholding from consumption and investment and so on.

"Outside of Nama, a liquidator appointed to wind up a property company has a duty to sell off seized properties quickly. During an economic crisis, when markets are under severe stress and banks are not functioning properly, these properties may have to be sold at a discount to their underlying economic value." Again, Alan presents a dishonest 'extreme' alternative to NAMA as we know it. Outside of NAMA, there can be better mechanisms designed for systemic and orderly adjustment of the property bubble legacy. My own NAMA 3.0 is one. Karl Whelan proposed a similar scheme as well.

"Economists refer to the discount that the liquidator must pay for a quick sale as ‘the price of immediacy’. By design, Nama will not have to pay this discount because it will sell the properties at its own pace. It is important to note that the outcome for delinquent borrowers is identical, whether liquidation occurs inside or outside of Nama. Property companies are wound up and collateral is seized. The difference is in the speed at which the seized assets are re-sold to the market." Again, this is simply not true. NAMA will keep certain projects (and thus certain property developers) in business and will even aim to complete some of the projects. If this is not a rescue clause, I am not sure what is. And as far as NAMA not paying the discount due to long term nature of the undertaking to dispose of the properties, well, this does have a price -
the longer NAMA holds these properties on its books:

• the heavier will be taxpayers' losses on bond financing (interest);
• the longer will the property markets take to adjust;
• the longer will be the period of banks uncertainty as to their costs of NAMA;
• the longer will be the period of stock markets uncertainty about the banks profitability;
• the longer will be the period of subdued investment and consumption in Ireland.

There is no such thing as a free lunch, Alan. And NAMA is not getting close to one either.

"It would be impossible to dispose of ten of billions of euro worth of distressed properties in a short time under current conditions -and extremely destructive to even try." Again - no one I know of - neither Karl Whelan, nor Brian Lucey, nor myself have said there should be a fire sale of assets. Why is Alan Ahearne allowed to deflect public attention from the real issues that are being raised against NAMA? Has he morphed into a spin doctor for DofF?

"No wonder, then, that the IMF, in its recent report on Ireland, describes Nama as ‘‘pivotal to the orderly restructuring of the financial sector and limiting long-term damage to the economy’’." Well, IMF has not endorsed NAMA and was actually critical of its provisions. Alan knowingly distorts IMF analysis by selectively quoting its report.

"A key question relates to the value at which the loans will be transferred from the banks to Nama. Some commentators have mistakenly talked about the price which Nama will pay for land and development properties. Nama is not buying properties, but rather buying loans that are secured on properties and other assets -there is a fundamental distinction." Again, Alan uses this article to deflect the real criticism - not a single serious commentator said that NAMA will be buying actual properties. But in buying the loans, NAMA will acquire titles to underlying collateral. So - a play of words for Alan is a fertile opportunity to reduce public focus on the real issues.

"The transfer value will be in accordance with EU Commission guidelines on the treatment of impaired assets. The commission is very clear on this issue: the loans are to be transferred at values based on their so-called ‘real’ -or long-term - economic value. These are the terms used by the commission. Paragraph 41 of the commission’s communication published in February states that “ . . .the transfer value for asset purchase or asset insurance measures should be based on their real economic value’’. Annex IV of the communication states that ‘‘the objective of the pricing must be based on a transfer value as close to the identified real economic value as possible’’. Well, actually, a 'real economic value' is not the same as the 'long-term economic value'. Plus, as several of us have pointed out before (Karl Whelan, Brian Lucey, many others and myself) - 'long-term' economic value can mean anything. Absolutely anything. So what Alan is saying above, just as his masters did earlier is that 'the EU Commission allows us to buy these assets at whatever price we want to pay for them'. This might be good for the Commission. But it is not good enough for us, as taxpayers who will ultimately pay this price.

"Some commentators have claimed that Nama should instead transfer the loans at what they refer to as ‘current market clearing prices’. It is hard to see how this makes sense. The reality is that there is no price at which the market for land and development can clear under current conditions. This is not to say that land has no value, but rather that the market for these assets is not functioning." In the current markets we do have real valuations of land and development assets. There are sales, there are some investments, there are transactions. Furthermore, today's price can be taken as a short-term valuation based on standard hedonic valuations. The only problem - for the banks, developers and their guardians in the Leinster House - is that these valuations are too low. So they use an academic economist to argue nonsense about 'markets are not there, man, me doesn't know much about what value things might have'.

"There seems to be a misapprehension among some commentators that, for Nama to break even, property prices need to revert to the peak levels seen in 2006-07. This is not the case."
Well, do the maths, apply discount of a% on a property loan of X bought, assuming the loan yields y% annually. Hold it for T years. Assume that the underlying collateral appreciates at k percent per annum. The present value of this loan T years from today if the prevailing rate of interest is R is
(1-a)X{Sum([1+y+k]/[1+R]^i} where i=1,...,T
The cost of financing this loan is at R+g where g is the risk premium, taken over T years and discounted back to today:
(1-a)X{Sum([1+R+g]/[1+R]^i}
The break even on this deal requires that the first identity is equal to the second one. This in turn implies that to break even, NAMA will have to either

• enjoy property yields + appreciation on the capital in excess of the cost of bonds financing and the cost of running NAMA itself - which really means a property boom (in yields terms) will be required well in excess of the 2004-2007 one, or
• enjoy property price appreciation that will cover the cost of bond financing, plus the cost of running NAMA, plus inflation, less the discount a.

This is soo excessively optimistic, that actually it makes me believe that in making his statement, Alan reveals not having done even a basic estimation of NAMA likely costs and losses.

Now, it is also telling that Alan fails to even mention the problems of protecting taxpayers' interests, ensuring transparency of NAMA operations, or any other major issues for which NAMA has been criticised by many commentators, including myself.

I also find it extremely arrogant and outright rude that this public servant has managed to escape any scrutiny as to:

• why as the economic adviser to the Minister for Finance has he not produced any economic assessments of NAMA?
• why has he failed to consider the economic costs of NAMA (he does attempt something of an analysis - albeit extremely simplistic - of what would happen if NAMA was not enacted)?
• why is he allowed to simply claim - with no evidence or arguments to support such a assertion - that NAMA will restore functional banking system in Ireland?
• why is he allowed, unchallenged, to claim that all external analysts are supporting NAMA, while we know of several Nobel Prize winning economists, numerous other respected international academics, not to mention all internal independent analysts working in Ireland who unequivocally identified NAMA as being a bad idea?

In short, Alan's article is a waste of space - pure and simple, providing not a single fact, not a single logical argument, not a single ounce of economic reasoning to support his thesis.

Read my alternative to NAMA here.

Daily Economics 25/04/09: John McGuinness & Alan Ahearne

For my comment on John McGuinness' story, scroll to the bottom.

Alan Ahearne, the newly minted adviser to the Government, has gone into an overdrive mode, tackling the 20 dissenters (including myself) who dared to challenge NAMA as a taxpayers' nightmare waiting to happen (in the Irish Times: here) and striking at criticism against his masters in the Leinster House (Irish Independent report today: here).

Per Ahearne's musings in the Times
It is indeed sad to read an article that so flatly denies itself a chance at having an argument, as Alan's treaties on What's wrong with nationalization. Alan spent some time studying our earlier Times piece (see more on this here), but it is also obvious that he had hard time coming up with arguments against its main points.

Let us start from the top.

"The recommendation that nationalisation of the entire Irish banking system is the only way we can extricate the banks and the economy from the serious difficulties we are experiencing risks diverting the debate away from issues that are much more central to the success of the ...Nama proposal." Alan follows up with a list of such 'central issues' from which our article was allegedly diverting the debate. Alas, all are actually covered in our article. As an aside, we never argued for nationalization of "the entire banking system", but of the systemically important banks alone.

"As in other advanced economies, bank nationalisation is seen very much as a last resort." Our article states that: "We do not make this recommendation from any ideological position. In normal circumstances, none of us would recommend a nationalised banking system. However, these are far from normal times..." We clearly were not advocating nationalization as some sort of a good-fun measure.

"It is important to recall that there is an overwhelming international consensus that the so-called good-bank/bad-bank model on which Nama is strongly based presents the opportunity for achieving an enduring long-term solution to the banking crisis." Actually, there is no such 'consensus'. And even if there was one, just because many other Governments have been working with this specific model does not mean that (a) the model actually works, (b) Ireland should follow in their footsteps and (c) this is the best option for resolving the crisis. The model does not work, as in the US, for example it has managed to absorb vast resources (which Ireland does not possess) and had come under heavy criticism as not delivering.

The fact that Ireland should not blindly follow in others footsteps is apparent. But it is also rather amusing, for the Indo (see below) reports today Alan's own insistence that we should not follow the US in stimulating our economy. No tax breaks to the suffering workers, says Alan, because we are different from the US in fiscal policies. NAMA and no nationalization, says Alan, because we want to follow the US lead in financial markets policies. Same Alan, two divergent points of view...

"One of the main issues identified in the article is the need to restore bank lending. This is a central objective of the Nama initiative. Nationalisation, on the other hand, creates a significant risk of undermining the capacity of the banks to raise funds internationally for domestic lending." Two things worth mentioning.

1. Alan clearly contradicts here his own statement that our article risks 'diverting' national attention from the core issues relating to NAMA. Obviously it did not: restoring bank lending is "a central objective of the NAMA" (per Alan) and it was identified in our original article as "one of the main issues".
   
2. The argument that nationalization undermines banks capacity to borrow internationally is a pure speculation. Firstly, our banks have little capacity to borrow internationally as is. Secondly, when they regain such capacity their ability to do so will be underpinned by public guarantees. Third, why a state-owned (and thus a fully state-insured) bank wouldn't be able to borrow from other banks and the markets? What would prevent, say London- based investors buying BofI bonds when these bonds carry a much stronger default protection under state guarantees than the one afforded to them by the half-competent current management?

"Investors would surely give the Irish market a wide berth in the future – not just in the banking sector – if the State undertook such an extreme step." No they won't, Alan. Banks and public finance in Ireland are in a mess. Investors have already priced these factors in. The markets understand the difference between a healthy, albeit not necessarily extremely profitable company like Elan or CRH and the nationalization-bound banks or economically illiterate Exchequer policies. Such are the basics of investment markets.

Nationalizing banks with clear privatization time line and disbursing privatization vouchers to the taxpayers will send strong signals to the markets that Ireland is:

• serious about the banking crisis;
• ready to support household balance sheets in crisis;
• can creatively stimulate its economy without destroying it fiscal position;
• will not waste privatization revenue in a gratuitous public spending boost, thus supporting long term fiscal health; and
• will have a transparent and fixed downside on its banking rescue commitments (i.e no repeated rounds of post-NAMA recapitalizations).

Which one of these points contributes to the international investors shying away from Irish stocks?

"It is difficult to see a credible exit strategy from wholesale bank nationalisation." Read our article on the topic in Business & Finance magazine, Alan. Also, the original Times article, stated in plain English: "...nationalisation offers an opportunity, should the Government see such a need, to share directly with the taxpayers the upside in restoring banking sector health. Such an opportunity could involve a voucher-style reprivatisation of the banks and could be used to provide economic stimulus at a time of scarce resources, at no new cost to the exchequer." So no real mystery as to how a credible exit strategy can be devised, Alan.

But NAMA without nationalization offers no exit strategy at all (credible or not). In fact, it offers no strategy for ending the rounds of repeated bailouts of the banks either.

"Under the Nama initiative the taxpayer is protected from unforeseen losses through the Government’s commitment to levy the banks for any losses incurred." This is simply wrong! Once NAMA owns the assets, what recourse onto banks will the state have should the quality of the assets bought fail to match the price paid? As far as I can see - none. But under nationalization, the state owns all - good and bad assets, and it can price these assets on the ongoing basis as more information on the quality of loans arrives.

"The State has already, under the recapitalisation programme, potential for benefiting from the upside in terms of the recovery in the share prices of the two main banks. The State has an option to purchase at a very low price 25 per cent of the existing ordinary shares in Bank of Ireland, and will soon have a similar claim on AIB." I am sorry, Alan, the 25% shares in BofI and AIB relate to the €5bn that we, the taxpayers have already paid for these banks recapitalization. These shares are wholly independent from NAMA liability and from the future liabilities we will incur under NAMA-triggered second round of recapitalizations. Whichever way you twist it, Alan, the state will have to spend additional cash buying the shares of the banks after we have paid for NAMA!

About the only statement in the entire article I find myself at least in a partial agreement with is: "Empirical evidence strongly suggests that private banks perform better than nationalised banks. International studies have shown that too much “policy-directed” lending by wholly state-owned banks has retarded economic growth. The simple truth is that nationalisation creates a significant risk of a political rather than a commercial allocation of credit." However, the problem here is three-fold:

1. NAMA is at the same, if not even the greater, risk of becoming politicised;
2. Banks are going to be majority state-owned post-NAMA (if only at double the cost to the taxpayers), so Ahearne's musings do not resolve the problem he posits; and
3. We are not in the normal times when empirical evidence holds...
   

we are in a mess! and Alan's confused rumblings on the topic illustrate the extent of this mess well enough for me.

Per Ahearne's economic policy musings in the Indo
US-styled fiscal "stimulus wouldn't work well anyway in a small, open economy, and, of course, the budget position is such that it just doesn't allow it," Dr Ahearne told Engineers Ireland conference.
Of course he is right on this, but him being right on the technicality does not mean that:

• It is right to raise taxes on ordinary workers and businesses, as the Budget did, amidst the recession;
• It is right not to cut public spending by an appreciably significant amount, as the Budget did;
• It is right to continue awarding public sector wage hikes, as the Government is doing with consultants;
• It is right to rely on senile plans for Irish-styled 'stimulus' that will waste money on unproven projects, as the Government did;
• It is right to continue resisting reforms of the public sector, as the Government is doing.
  

Ahearne further said that 'if the US and the global economy improves next year and Ireland continues to get its public finances in order, then Ireland would be in a position to make a "strong recovery"'. Really, Alan? How so? Through a miraculous return of Dell jobs, Google engineers jobs? Waterford jobs? Tralee jobs? By reversing our losses in exports competitiveness? By scaling down the atrociously high cost of doing business here? Dr Ahearne is so far removed from reality of economic environment that he believes the entire economy can be rescued by the IDA efforts alone?

"Ireland is regaining its competitiveness "very quickly" because of rapidly falling wages, he said", as the Indo reports. "Of course, those declines are painful but they will price a lot of people back into the labour market and, therefore,they are setting the foundations for the recovery." This amazingly callous statement comes from a person who is secure in his own public sector job with high salary. It also comes from an official of this Government.

Wage declines have been borne out by the private sector alone, Alan. Unemployment increases have been borne by the private sector alone, Alan. And most of the real income loss to those still in the jobs has come courtesy of your masters policies - the Budget. How is this restoring any sort of competitiveness vis-a-vis other economies where the Governments are putting in place tax cuts?

Here is a lesson that Dr Ahearne failed to learn in all his years of studying economics:

• Higher tax rates amidst the most generous welfare system in Europe mean that marginalized workers will not have an incentive to return to the labour market.
  
• Higher taxes in a restricted labour market (with high costs of hiring and firing workers and high minimum wage rate) hamper jobs creation.
  
• Higher taxes on already debt-loaded households mean that more and more families are facing the ruin and precautionary savings are rising, reducing our internal economy growth potential.
  
• But most importantly, higher taxes on human capital mean that productivity growth is going to be constrained for years to come.
  

It is that simple, Alan, any recovery will require productivity growth in this economy outpacing the cost of living rises and the cost of doing business growth. Your policies have just hiked the latter by some 10% - courtesy of taxes and levies increases in the Budget, while restricting productivity growth by failing to provide any real support for businesses or incentives for workers to get off the dole. You are travelling in exactly the opposite direction to the one that has to be taken if we are to get productivity-driven recovery.

John McGuinness' appearance on the Late Late Show tonight was a logical conclusion of months of pinned up rage that this country is feeling toward the Cabinet - and primarily to Mr Cowen, Mr Lenihan and Mrs Coughlan - towards the public sector at large and towards the scores of mostly nameless, faceless (but sometimes publicly visible) 'advisers' who have systemically destroyed the prosperity of this country and its chances of coming out of the recession as a competitive and growth-focused economy.

McGuinness avoided offering direct examples of gross incompetence and outright insubordination that are so often exemplified by some of our public sector departments and quangoes. This was his choice, but the country needs to know of these acts and it needs to know the names of those who carry on their duties in such a manner. He also avoided placing the blame for the mess we are in where it really belongs, at the feet of:

• the participants in the Social Partnership that managed to squander billions of our money to finance wasteful 'investment' and social cohesion programmes and to set this economy into the rigid infrastructure of inflexible labour laws, senile minimum wage restrictions, mad political correctness and corrupt local governance. Some of the Social Partnership members were the reluctant parties to this outrage - brought in under the threat of union violence against businesses and entrepreneurs. Others made it their life-long ambition to get their organizations to the feeding trough. Roles of all should now be questioned and the entire Partnership model must be scrapped;
• the Government that has for the last 6 years chosen to take no serious policy action to reign in its own employees and their unions and that has retained inefficient and often markets-retarding monopolies. The Government that simply bought its way through the elections, policy conflicts and minor reforms;
  
• the political culture that promotes mediocrity and punishes statesmanship. Our academic and policy debate systems that promote complacency, competition for public funding, anti-entrepreneurial ethos, social welfarism and provide philosophical and ethical foundations for systematic moral and financial debasing of the taxpayers, wealth creators, jobs providers and consumers, promoting instead the unquestioning support for NGOs, quangoes and public sector;
  
• some business elites that, in exchange for state contracts handouts looked the other way as the political and social elites of this country carved our wages and earnings to their own benefits. It is a telling sign of the depreciation of the entrepreneurial spirit in this country that faced with a wholesale destruction at the hands of incompetent (and often outright malicious) policymakers, our business leaders remain largely silent, uncritical of the Government.
  

This should not be held against the person who has now become the first man from inside the FF tent to voice his honest and informed opinion. Instead, there should be firm focus on completing the task he started - the task of recognizing the fact that we are currently being ruled by the three 'leaders' who have shown over the last year complete inability to run the country in crisis. It is time for us not to ask them to go, but to tell them that they must go.

Blunders of Mary: I would encourage the readers of this blog to submit any publicly documented evidence of Mary Coughlan's incompetence at the helm of DETE or indeed of her incompetence at the previous ministerial appointments.

Here is the first one: on April 2 Mary Coughlan has publicly displayed the lack of knowledge as to the existence (let alone the details) of the new Social Welfare Bill put forward by her own Government and already scheduled for a full debate in the Dail in late April. As the bill provides for adjustments in unemployment benefits and conditions, the bill would be at least partially linked directly to Mary Coughlan's ministerial brief. Responding in the Dail to the question concerning this bill, Mary Coughlan said she had no knowledge of any such legislation.

There was, of course, her infamous failure in the Lisbon Treaty debate (here); and an equally spectacular flop during her tenure as Minister for Agriculture, when an ordinary farmer's question exposed her lack of knowledge concerning her ministerial brief.

She earned herself a nickname of 'Sarah Palin of Donegal' after she told radio listeners on April 11th that Irish shoppers go to Northern Ireland only to buy cheap booze (here). This showed such monumental disrespect for ordinary families her Government has squeezed out of savings, pensions and earnings, that she should have been sacked on the spot for such proclamations.

The rumor mill in the public sector if full of accounts - that are yet to be documented - of her undiplomatic behaviour at foreign missions, outrageous antics at the meetings with international business leaders and arrogant statements in addressing top corporate brass. This is far from being a hallmark of an independently-minded politician - it is a direct result of her gross unsuitability for the position of responsibility that she occupies.