There are a zillion things one could say about Nama. Here's an alternative take.
Nama proves that, deep down, Irish people don't believe in a culture of entrepreneurship.
If we invest in something and it makes money (such as property, banks shares or the like), that's great. If it bombs, we want the taxpayer to bail us out.
How else can we explain the number of people who are either in favour of, or staying silent on, the creation of Nama?
It's not just people who work for banks, financial institutions and the construction sector. It's not just real estate agents, conveyancy solicitors and architects. It's not just brickies and their families.
It's everyone with shares in Bank of Ireland or AIB. Ask them how they feel about Nama and they'll demur. The reason is that they've done a quick calculation: creating Nama will bail out their share price.
Therefore, cut the hospital beds and school services. Cut poverty programs. Raise taxes.
Just so long as my bank shares, investment property or architect consultancy doesn't suffer financially.
And when this is wrapped up by the end of the year and the banks trade again, will my friend have learnt that making investments is a risky business? Will he accept that banks are private enterprises that can fail?
No he won't. Because of what we're doing now, he will reasonably assume that bad investments in Ireland need not cost him. That the taxpayer will jump in to save him.
He's very lucky he doesn't live in a real market/entrepreneurial country.
Nama proves that, deep down, Irish people don't believe in a culture of entrepreneurship.
If we invest in something and it makes money (such as property, banks shares or the like), that's great. If it bombs, we want the taxpayer to bail us out.
How else can we explain the number of people who are either in favour of, or staying silent on, the creation of Nama?
A friend of mine sums up the position perfectly. He has considerable cash savings and several investments. He works in a property-related enterprise. For him, all would be jeopardised if the normal market were allowed to follow its course (ie bad debts and investments go wallop).
His answer -- and it's not an unreasonable one, given his exposure -- is that it's better that Nama go ahead. Because given the choice between the taxpayer assuming €90 billion of debt and his investments going sour, he chooses €90 billion of debt taken on by the whole country. And why wouldn't he? Why should he have to suffer the consequences of a risky private enterprise venture not working out? What do we think this is? A market economy?
This position is reflected a lot more widely than is being represented by the media.It's not just people who work for banks, financial institutions and the construction sector. It's not just real estate agents, conveyancy solicitors and architects. It's not just brickies and their families.
It's everyone with shares in Bank of Ireland or AIB. Ask them how they feel about Nama and they'll demur. The reason is that they've done a quick calculation: creating Nama will bail out their share price.
Therefore, cut the hospital beds and school services. Cut poverty programs. Raise taxes.
Just so long as my bank shares, investment property or architect consultancy doesn't suffer financially.
And when this is wrapped up by the end of the year and the banks trade again, will my friend have learnt that making investments is a risky business? Will he accept that banks are private enterprises that can fail?
No he won't. Because of what we're doing now, he will reasonably assume that bad investments in Ireland need not cost him. That the taxpayer will jump in to save him.
He's very lucky he doesn't live in a real market/entrepreneurial country.
The country contains many high quality entrepreneurs as we know, however entrepreneurs will not take office. Solution?
Posted by: Joseph | August 29, 2009 at 03:57 PM
I am not one of them, but there are intelligent people who believe NAMA is desirable, and yet own no bank shares or property.
Garret FitzGerald supports NAMA, for example, and I doubt that he is his son Mark's puppet, especially as I suspect his other son John leans against NAMA. (It may be incorrect to assume that Mark, as a property man, favours NAMA).
That said, the noisier voices in support of NAMA probably do have "skin in the game", as the Americans say.
In their case, it's metaphorical. For the rest of us, it is likely to be more real.
Posted by: Fergus O'Rourke | August 30, 2009 at 04:48 PM
Very incisive analysis.
All I can conclude is: this is Ireland.
Nama, Lisbon, TDs expenses, unemployment, budget cuts....I'd say there's a hell of a lot of anger brewing out there.
How long it will go on, how much people will stomach before they say enough's enough is anybody's guess.
Posted by: john | September 01, 2009 at 01:21 AM