FG TD's Wife Goes Indy?

Anne Breen, the wife of Clare TD Pat Breen, is reportedly running in the local elections as an independent. Check out the front page of the Clare Champion (hint: it's in the middle of the puff piece headlined 'hospital campaigner joins election race). 

Strange stuff: a domestic squabble, a selection convention dispute, or something slightly stranger? You'll know when I do.

Update: it seems a simple case of over-represenation: the would-be Cllr. Anne Breen seemingly found little room on a ticket with sitting cllr. Oliver Garry and former party big beast Madeleine Taylor-Quinn. Embarking on a political solo run, however, may not be the best thing for Pat Breen - unless, of course she wins. In that case, all will be forgiven.

Update 2: A poster on politics.ie claims that Anne and Pat Breen are in fact estranged - which makes the situation even more delicate...

RTE.ie Joins the Cheerleaders?

Anyone check out the homepage of news on the economy from RTE today? Aside from the fact that there's not much news since Thursday, they've made Apache Pizza's expansion plans their top story. I can see why they'd want to report something positive, but some stories just aren't top-of-the-page news. A pizza chain creating 100 jobs is one of them. Other stories bear a remarkable similarity to the press releases over at the Department of Enterprise Trade and Employment.

Another item, which shows how consumer sentiment is continuing to tank, is headlined 'survey shows consumers still cautious' - as if that's a strange thing! Has RTE.ie suspended its critical judgement to become a cheerleader?

No Neat Trick

The Indo today has the unsurprising news that plenty of developers are simply not paying up on development levies and other charges to local authorities. Add to that people who can't afford to pay waste charges, plus businesses struggling to pay water charges and you have a €271m black hole. One builder in Monaghan owes the local authority€813,000 in unpaid development levies.

Development levies were one of the neatest tricks during the boomtime: rather than setting aside a fifth of a development as social and affordable housing (nominally a legal requirement) a builder could instead make a cash payment to the local authority. Hey presto - the developer can market their complex to snobs who don't like 'social and affordable' types and keep the price up, the local authority gets a fat wad of cash to spend on anything infrastructure-related, and the people who need social and affordable housing may get a hand. By 2006, it emerged that the one-off development levies accounted for 13.6 per cent of local authority budgets. 

In other words, local authorities across the country were spending money that just isn't there anymore. Now, it's revealed, not all of the money was actually stumped up. The Indo reports that debt collection agencies have been engaged to chase up the builders but, chances are, a good chunk of those fellahs are not insolvent. This mess is the next public sector finance time bomb.

Open Season on Biffo

The Irish Times has gone all web2.0 and allowed site visitors to comment on Brian Cowen's hectoring op-ed in this morning's edition. It's a once-in-a-lifetime opportunity to fire back your bile against the man who led us into this mess.

I suspect it won't be pretty.....

A Bad Bank is a Bad Idea

I've shied away from bitching about the budget - at least here. That was before Brian Lenihan's appearance on Prime Time last night to discuss the 'bad bank' proposal. Never mind the fact that the Government have committed to buying assets without making any effort to ascertain their value - their 'bad bank' plan as proposed is doomed to failure if history and common sense are any guides.

Charles Wallace and Swedish Economist Stefan Karlsson go in-depth elsewhere,but the reasons are simple. In the two recent examples of successful 'bad bank' proposals - the American response to the 1989 Savings-and-Loan scandal and the (oft-cited) Swedish response to the 1990s banking crisis - the institutions being rescued were nationalised. Government officials objectively set the value of bad assets that the banks couldn't offload, and the state purchased them. When the banks had traded for a bit and found their feet, off they went again into the Private Sector, and normality was restored. 

In Japan, they took a different approach between 1999 and 2005, with the Resolution and Collection Group: the barely-solvent or insolvent banks continued as independent entities, and tried to negotiate the sale price of the  with the RCC. Predictably, they thought their assets - many of them ludicrously overvalued Zombie companies - were worth more than the State was prepared to pay. The result? The RCC only purchased 858 loans, with a nominal value of $38 billion, and Japan's economic stagnation continued right up to the present crisis.

The Government's plan (and, whisper it, Obama's) is doomed to failure for the very reasons that hobbled the Japanese approach. With bankers trying to extract maximum value for their worthless assets and Government officials trying not to get shafted, the result will be a "stalemate" - that's the analysis of William Seidman, who headed up the American response and advised the Japanese on theirs. 

Moral outrage over the proposal is a blind alley - there are no good choices in the current crisis. However, if we're going to bail out bankers, the bailout strategy should at least work. This plan, quite simply, won't.

UPDATE: Lenihan on RTE Radio has said that the Government may 'part nationalise' banks if the bad debts are big enough. Are they making it up as they go along?

How Did He Do It?

An interesting piece in the Indo today reveals that Michael Martin's brother, Cllr Sean Martin, sent out a few press releases on local issues from a Department of Foreign Affairs email address. Cllr Martin has no connection to the Department, but somehow had access to its email system.

Opposition politicians have kicked up demanding a full investigation, and rightly so. If the Minister for Foreign Affairs is in the business of letting relatives and friends use his Department's email system, then the security of this (highly sensitive) area of the Government is compromised. It's not the breathtaking arrogance of this that ticks me off - it's the fact that they've played fast and loose with the integrity of our foreign policy.

Set George Free!

I've just stumbled across a very interesting interview with George Lee on RTE. Here's the clip:

From my reading of it, he appears to be either insinuating pressure not to criticise the government, or that he can't really tell the full story about what's happened (ie: FF F**ked up) while still remaining politically neutral.

The former would be sinister - though not surprising given the Cowen picture debacle - and the latter makes a joke of public service broadcasting's primary goal: telling the truth about what's happening. Lee is an economist of the highest integrity and ability, and should be able to give his professional opinion on the current financial crisis. If he objectively decides that the government messed up, but the opposition's plans to resolve the crisis are errant nonsense, that's his analysis - not him banging a particular political drum.

RTE bosses should do the right thing - set George Lee free on our airwaves to tell us just what happened to get the country in this state, and what will happen now.