What would you have done differently?

PomBear · 11-10-2010 4:13pm #1

Ok so hypothetical situation, you're taoiseach, how would you have taken on the banking crisis?

Firstly I would have let Anglo crumble, it's a private business that made a series of bad investments (in giving loans to people who could not pay them back). I would never consider using tax payers money for the survival of a business so it can cripple people further.

Secondly, to encourage investment and spending within Ireland, I would provide tax relief to businesses that invest into Irish raw materials and other Irish businesses, also tax relief for creating more Irish jobs. Stimulates economy, gets people spending.

Thirdly TD's have a set quota of expenses (not going to save economy, largely symbolic)

and finally, look into green alternatives to energy, this will see us be at the forefront in eco-technology which will be needed in future.

Lenny Lovett · 11-10-2010 5:38pm

PomBear wrote: »

Ok so hypothetical situation, you're taoiseach, how would you have taken on the banking crisis?

Firstly I would have let Anglo crumble, it's a private business that made a series of bad investments (in giving loans to people who could not pay them back). I would never consider using tax payers money for the survival of a business so it can cripple people further.

Agreed. I would have let Anglo sink and let the Anglo investors carry the can for it. I would have put in place a guarantee for deposits in the others as the Government did but would have moved much faster to Nationalise AIB and BoI in a similar fashion to what happened to Northern Rock and Lloyds HBoS in the UK.

PomBear wrote: »

Secondly, to encourage investment and spending within Ireland, I would provide tax relief to businesses that invest into Irish raw materials and other Irish businesses, also tax relief for creating more Irish jobs. Stimulates economy, gets people spending.

They should have set up a Credit Bank for enterprise similar to (was it) IBI a few years back. The EIB would have come on board to provide finance for such a project.

PomBear wrote: »

Thirdly TD's have a set quota of expenses (not going to save economy, largely symbolic)

I believe all their expenses should be withdrawn now and they should operate as a private company would. They would not get any subsistence or travel expenses to get to the Dáil. They get handsomely rewarded as it is and we could save the guts of €250million a year there.

PomBear wrote: »

and finally, look into green alternatives to energy, this will see us be at the forefront in eco-technology which will be needed in future.

They could stride forward in Green energy production if they did away with so much of the red tape and regulation and quangos governing it. If the Greens actually thought about what they were doing they could be very successful. They should have brought in many initiatives that would have cost the ordinary person nothing but would have created a much bigger recycling industry and hence creating many jobs. For example they could have introduced a deposit schem on packaging such as plastic bottles, cans etc whereby we would pay, say 10c deposit on purchase and have it refunded upon return. This means that even if householders didn't participate, kids and unemployed people would. Also they should have taxed packaging this forcing producers to reduce unnecessary packaging. Again it would cost the ordinary Joe nothing, would clean up the environment, encourage recycling and would create employment.
Too simple for the Greens though.

I would also abolish many if not all the current quangos. I would restore much of their responsibilities (that aren't being duplicated) to the local councils.

I would reduce the numbers of TDs to one per hundred thousand per constituency.

I would abolish the Seanad.

I would outsource HR, Admin, Logistics and Cleaning for the HSE, Education and most other Departments.

I would means test child allowance.

And there's loads of other cuts and changes I'd make... too numerous to go into here now.

PeterIanStaker · 11-10-2010 8:37pm

Definitely abolish the Seanad.

Let Anglo disintegrate

1c levy on text messages

Get a lot of the public servants who are 55 - 60 ish to retire early, hire new blood.

Decimate ministers' expenses

Denerick · 11-10-2010 9:01pm

PeterIanStaker wrote: »

Definitely abolish the Seanad.

How would that help the economy?

Let Anglo disintegrate

Its an easy thing to say/claim, but you have to remember that were you the man in power, you would have to deal with the economic ramifications of such an action.

1c levy on text messages

Thats just mean! And would people please stop calling a tax a 'levy'. Its incredibly annoying. The government do it too. From now on, every time the government introduces a new TAX I wish to god they would call it just that.

Get a lot of the public servants who are 55 - 60 ish to retire early, hire new blood.

That seems unproductive, since the state will still be paying generous pensions to early retirees as WELL as the extra labour costs of new public service intakes.

Decimate ministers' expenses

Divide them by ten?

PeterIanStaker · 12-10-2010 11:24am

Denerick wrote: »

How would that help the economy?

Its an easy thing to say/claim, but you have to remember that were you the man in power, you would have to deal with the economic ramifications of such an action.

Thats just mean! And would people please stop calling a tax a 'levy'. Its incredibly annoying. The government do it too. From now on, every time the government introduces a new TAX I wish to god they would call it just that.

That seems unproductive, since the state will still be paying generous pensions to early retirees as WELL as the extra labour costs of new public service intakes.

Divide them by ten?

The text message thing would totally work. We could send each other dirty jokes about Harney, Cowen etc and improve the economy.
I'm not sure how getting rid of the Seanad would affect anything, I just think it (along with the Dail tbh) is a waste of space and a dumping ground for failed politicians and hacks who crawl up Bertie's colon.
Decimate, yeah, cut the expenses to one - tenth of what they're getting now.
Dont know how I'd do the civil servant thing I was only typing out loud

Lenny Lovett · 12-10-2010 4:10pm

Denerick wrote: »

How would that help the economy?

It would save around €48million per annum. It would be one less place for failed/rejected Politicians to be cosseted at our expense.

Denerick wrote: »

Its an easy thing to say/claim, but you have to remember that were you the man in power, you would have to deal with the economic ramifications of such an action.

How would it have affected the credit worthiness of the Country? It was a private enterprise funded by Investors who are well aware that the value of their investments could go down as well as up so I don't buy all the bullsh1t we were fed that it would affect our National reputation. Absolute rubbish!

Denerick wrote: »

Thats just mean! And would people please stop calling a tax a 'levy'. Its incredibly annoying. The government do it too. From now on, every time the government introduces a new TAX I wish to god they would call it just that.

It would be relatively painless unlike many of the Taxes dressed up as Levies by the current clowns.

Denerick wrote: »

That seems unproductive, since the state will still be paying generous pensions to early retirees as WELL as the extra labour costs of new public service intakes.

Divide them by ten?

A. They should not be replaced as The Civil Service is well over staffed as it is.

B. With less staff we would require less office space and associated expense.

C.If they did need to replace them they could take them on on new contracts with less ridiculous pay and conditions and onerous contracts.

hallelujajordan · 12-10-2010 8:28pm

I'm surprised . . . this thread has been alive for more than 24 hours and only 4 responses ? ? ? Surely the great minds of boards.ie/politics who are so hugely critical of the governments response to the banking crisis would use a thread like this as an opportunity to outline how they would have done things differently . . ? Or is it just the Eamonn Gilmore approach of slate everything while sitting firmly perched on the fence ?

Lenny Lovett wrote: »

How would it have affected the credit worthiness of the Country? It was a private enterprise funded by Investors who are well aware that the value of their investments could go down as well as up so I don't buy all the bullsh1t we were fed that it would affect our National reputation. Absolute rubbish!

I'm not an economist, so I find it hard to truly understand what might have happened had we let Anglo fail . .

But here is what David McWilliams (often quoted her in criticism of the government) was saying on the run up to the banking guarantee . .

davidmcwilliams wrote:

The collapse of Lehman has done untold damage to the US, but at least the US has the comfort of being the world’s biggest economy and deepest financial market, as well as being able to print its own currency. We are not in that position. If Ireland lets a bank go under – even a small one – panic will follow.

We will get a run on the banks internally, while externally we will scare foreign investors, who are crucial to our economy. It would take years to restore credibility. Countries like Argentina allow their banks to fail with detrimental consequences; Ireland can’t afford to let this happen.

Therefore, the Lehman model is not on, even though some institutions might deserve to go under.

and here is what he was saying the day after the guarantee. .

davidmcwilliams wrote:

We are not out of the woods by any stretch of the imagination. Indeed, some Irish banks have been so recklessly managed they hardly deserve to be covered by the guarantee.

Finance Minister Brian Lenihan has made a wise choice. By coming up with a unique, Irish plan — guaranteeing all deposits — instead of importing a failed solution from abroad, he has instilled confidence in the Irish financial system.

Most importantly, Irish banks are now safe. This is the single most crucial upshot of yesterday’s move. . .

. . . In time, Brian Lenihan’s move yesterday will be seen as a masterstroke and a practical blueprint for the new financial architecture which will emerge from this global crisis.

So back to the OP's question, and you really have to start on the night of the bank guarantee . . . What would you have done differently ? ?

Lenny Lovett · 12-10-2010 8:37pm

hallelujajordan wrote: »

and here is what he was saying the day after the guarantee. .

And what does David McWilliams say nowadays?

hallelujajordan · 12-10-2010 8:42pm

Lenny Lovett wrote: »

And what does David McWilliams say nowadays?

Read it yourself . . that's not the point . . My point is that we can all have 20:20 vision in hindsight.

If you want to really answer the OP's question you have to take yourself back to the night of the banking guarantee, show how and why you would have done things differently then and try to work forward from there. .

Lenihan was in a position where he had to make a decision and make it quick . . I am merely showing you that had David McWilliams been Finance Minister in September 2008, it seems he would have done pretty much the same as Lenihan did at the time. . .

Liam Byrne · 12-10-2010 8:44pm

I'd have done the following, and it goes back to before the bank guarantee.

1) Kicked out Ahern due to his reduced credibility, dodgy finances and his gib suggestion about suicide
2) Installed a proper financial regulator
3) Put in a proper vouched expenses regime for TDs and public servants
4) Put in rules that if any projects were more than 10% over budget or over due that the Minister involved was fired
5) Installed ministers who actually had some expertise in their intended area
6) Abandoned the party whip system so that all TDs could vote with their conscience (assuming they have one)
7) Legislated that banks who were lending to commercial concerns could not issue domestic mortgages - i.e. they weren't going to face a customer thinking "the developer could go bankrupt so let's make sure he gets paid - we can always go after a personal borrower"
8) Legislated for stupidity; if anyone borrowed more than they could demonstrably afford, then the loan had to be immediately paid back.....check wage slips if necessary
9) Legislated to avoid the recycling of profits......no tax breaks if loans were rolled over

15) Legal ban on the phrase "property ladder"

Then, if we had still managed to have some **** hit the fan some bit in 2008

1) Allow Anglo to swim in its own excrement
2) Tell the banks that they had 24 hours to prove that their figures were accurate; if they were, then they were guaranteed up to a max of €50,000 per person, otherwise forget about it since they had lied or been reckless
3) Avoid NAMA, which is only keeping prices artificially high and deferring the inevitable
4) IMMEDIATELY legislate for the non-transfer of assets to wives and children; you cannot transfer something that you don't own/haven't paid for
5) Claim all assets that seemed dodgy under 11 & 13 for the State as payment for the f**k up

No bailout for ANYONE. If you'd behaved responsibly you didn't get hammered, and if you'd contributed to the demise of the economy you were culpable and responsible to the amount / proportion that you had overstretched.

hallelujajordan · 12-10-2010 8:54pm

Liam Byrne wrote: »

I'd have done the following, and it goes back to before the bank guarantee.

1) Kicked out Ahern due to his reduced credibility, dodgy finances and his gib suggestion about suicide
2) Installed a proper financial regulator
3) Put in a proper vouched expenses regime for TDs and public servants
4) Put in rules that if any projects were more than 10% over budget or over due that the Minister involved was fired
5) Installed ministers who actually had some expertise in their intended area
6) Abandoned the party whip system so that all TDs could vote with their conscience (assuming they have one)
7) Legislated that banks who were lending to commercial concerns could not issue domestic mortgages - i.e. they weren't going to face a customer thinking "the developer could go bankrupt so let's make sure he gets paid - we can always go after a personal borrower"
8) Legislated for stupidity; if anyone borrowed more than they could demonstrably afford, then the loan had to be immediately paid back.....check wage slips if necessary
9) Legislated to avoid the recycling of profits......no tax breaks if loans were rolled over

15) Legal ban on the phrase "property ladder"

C'mon Liam, Its pretty easy to create a list like that from where we stand today. I would have done much of that too . . with hindsight . .

Given that you have been on here since 2006 are you able to quote yourself making any of these recommendations pre-Sep 2008 (particularly the bits about financial regulation and the banks as most of the rest of it has little to do with the banking crisis)?

Liam Byrne wrote:

Then, if we had still managed to have some **** hit the fan some bit in 2008

1) Allow Anglo to swim in its own excrement
2) Tell the banks that they had 24 hours to prove that their figures were accurate; if they were, then they were guaranteed up to a max of €50,000 per person, otherwise forget about it since they had lied or been reckless
3) Avoid NAMA, which is only keeping prices artificially high and deferring the inevitable
4) IMMEDIATELY legislate for the non-transfer of assets to wives and children; you cannot transfer something that you don't own/haven't paid for
5) Claim all assets that seemed dodgy under 11 & 13 for the State as payment for the f**k up

No bailout for ANYONE. If you'd behaved responsibly you didn't get hammered, and if you'd contributed to the demise of the economy you were culpable and responsible to the amount / proportion that you had overstretched.

So, you disagree with David McWilliams comments in 2008 that we could not let the banks fail and his description of Brian Lenihans 'Masterstroke' ? Remember, you criticised Bertie Ahern for not listening to David McWilliams and others. Would you have ignored him in Sep 2008 ?

Liam Byrne · 12-10-2010 9:07pm

hallelujajordan wrote: »

C'mon Liam, Its pretty easy to create a list like that from where we stand today. I would have done much of that too . . with hindsight . .

Given that you have been on here since 2006 are you able to quote yourself making any of these recommendations pre-Sep 2008 (particularly the bits about financial regulation and the banks as most of the rest of it has little to do with the banking crisis)?

Quoting myself might take a while, but I certainly believed all of the above and had discussions with people about most of them. There's no hindsight involved in the fact that I have repeatedly proposed 1, 2, 3, 5, 6 & 7, and spewed out my coffee and said "here comes a disaster" when I read that banks had started offering 100% mortgages. I also left a bank because they used the phrase "property ladder" (I wanted a home, not a rung) and turned down an unsustainable loan despite it being for a pet project that was very close to my heart.

If your scepticism requires actual links to the above, then I will try to go and find a few posts; however you can rest assured that I speak my mind and speak the truth - even when we've had disagreements you've acknowledged that - so hopefully I won't have to spend time searching in order for the above to be credible.

hallelujajordan wrote: »

So, you disagree with David McWilliams comments in 2008 that we could not let the banks fail and his description of Brian Lenihans 'Masterstroke' ? Remember, you criticised Bertie Ahern for not listening to David McWilliams and others. Would you have ignored him in Sep 2008 ?

I criticised Ahern for not listening brainlessly dismissing warnings, not for not listening specifically to "Mr Decking" and "Mrs Second-Home". I don't blindly agree with everything that McWilliams says.

I wouldn't have "ignored him" (or told him to commit suicide) but I would have taken his viewpoint and advice as part of an overall strategy. But I definitely wouldn't have guaranteed Anglo.

cloonton · 12-10-2010 9:16pm

I was amazed at the intelligent and original thought behind the deposit guarantee when it was announced. There's a big difference between guaranteeing the deposits of the citizens and bailing out the banks, and how one turned into the other is not the purpose of this thread, I'd imagine.
Anyway... what I'd do:
raise taxes. Yep, you hate me now, but I'd raise the higher rate by a percentage or two. I'm sorry, but anyone earning over €35400 can afford to pay something extra on their income over that amount, or at least they can afford to contribute a heck of a lot more then people earning less then that amount. Also, I'd take a token tax of, say 2% off all income. You earn money, you need to pay tax, esp in the hard times. tough.
tax child benefit. so ok, some people will slip though the net... that's always going to happen. You'll still collect plenty.
bring in water charges. a) water is a precious resource so don't waste it. b) it costs money to clean it etc, therefore you need to pay for it.
get those on housing lists into NAMA houses. Otherwise it's all just been such a waste!
build and spend. obviously re-training is the way to go for those 'qualified' in construction trades etc, but why not take the opportunity to get our hospitals / schools / roads up to first world standards (cheap, hopefully). get people off the dole and spending their hard earned wages.
I'm sure I'll think of a few more once I hit reply!

pavb2 · 12-10-2010 9:36pm

Sweden had a banking crisis I know they're not in Euro, but still what did they do? are there any lessons we can learn?

They aren't suffering the global downturn as much as other European countries

hallelujajordan · 12-10-2010 9:40pm

Liam Byrne wrote: »

Quoting myself might take a while, but I certainly believed all of the above and had discussions with people about most of them. There's no hindsight involved in the fact that I have repeatedly proposed 1, 2, 3, 5, 6 & 7, and spewed out my coffee and said "here comes a disaster" when I read that banks had started offering 100% mortgages. I also left a bank because they used the phrase "property ladder" (I wanted a home, not a rung) and turned down an unsustainable loan despite it being for a pet project that was very close to my heart.

If your scepticism requires actual links to the above, then I will try to go and find a few posts; however you can rest assured that I speak my mind and speak the truth - even when we've had disagreements you've acknowledged that - so hopefully I won't have to spend time searching in order for the above to be credible.
.

I don't doubt your integrity Liam but if you can quote yourself criticising the bank guarantee in September 2008 then you will have shown greater foresight than even David McWilliams at the time. .

hallelujajordan · 12-10-2010 9:43pm

cloonton wrote: »

I was amazed at the intelligent and original thought behind the deposit guarantee when it was announced. There's a big difference between guaranteeing the deposits of the citizens and bailing out the banks, and how one turned into the other is not the purpose of this thread, I'd imagine.
Anyway... what I'd do:
raise taxes. Yep, you hate me now, but I'd raise the higher rate by a percentage or two. I'm sorry, but anyone earning over €35400 can afford to pay something extra on their income over that amount, or at least they can afford to contribute a heck of a lot more then people earning less then that amount. Also, I'd take a token tax of, say 2% off all income. You earn money, you need to pay tax, esp in the hard times. tough.
tax child benefit. so ok, some people will slip though the net... that's always going to happen. You'll still collect plenty.
bring in water charges. a) water is a precious resource so don't waste it. b) it costs money to clean it etc, therefore you need to pay for it.
get those on housing lists into NAMA houses. Otherwise it's all just been such a waste!
build and spend. obviously re-training is the way to go for those 'qualified' in construction trades etc, but why not take the opportunity to get our hospitals / schools / roads up to first world standards (cheap, hopefully). get people off the dole and spending their hard earned wages.
I'm sure I'll think of a few more once I hit reply!

Your suggestions may do much to address the deficit but none of them speak to the banking crisis. What would you have done differently in relation to how the banking crisis was handled ?

Liam Byrne · 12-10-2010 9:47pm

hallelujajordan wrote: »

I don't doubt your integrity Liam but if you can quote yourself criticising the bank guarantee in September 2008 then you will have shown greater foresight than even David McWilliams at the time. .

I just tried, but boards' search only goes back to "1 year ago"

cloonton · 12-10-2010 10:29pm

hallelujajordan wrote: »

Your suggestions may do much to address the deficit but none of them speak to the banking crisis. What would you have done differently in relation to how the banking crisis was handled ?

I take your point, but the original post isn't only concerned with the banking crisis, despite the first couple of lines.
However, as regards the banks, I believe that those which couldn't survive should have been allowed to fail. I will admit, if I were in politics, I may have modified this if (when?) it became apparent that we were going to be left with maybe one bank. If I had decided to step in, tho, I would have paid top whack to the best man for the job of getting the damn thing back on track and the medja be damned!
Oh if only!;)

hallelujajordan · 12-10-2010 10:55pm

Liam Byrne wrote: »

I just tried, but boards' search only goes back to "1 year ago"

You can go further back . . just search for posts from 1 year ago, and older in advanced search . .

Just did a search, the earliest I can find you commenting on the bank guarantee is in Jan 2009. . . Looks like you agreed with the guarantee but not with the subsequent recapitalisations . . pretty consistent with David McWilliams position . .

Liam Byrne wrote: »

Fact is that we need banks. So the original bailout / guarantee, while hard to stomach, was essential.

HOWEVER, we were originally told by Fianna Failure that the guarantee would do; that the bailout would NEVER BE REQUIRED.

The biggest issue, however, is the Government's ineptitude and complete failure to put ANY caveat on the aid......any bank in trouble on the basis of the world slowdown is almost beyond their influence.

Yes, there was an issue whereby banks gave loans to developers to build and then gave ordinary punters 100% mortgages to help keep the price high; it was in their [conflict of] interest to ensure that they got the bigger - developers' - loans paid back. But likewise, it was up to people to manage their money and only borrow what they could reasonably expect to pay back.....so part of that issue is the borrowers' own fault too.

BUT any bank who've given their individual directors loans of over 100 million, thereby screwing themselves, should NOT be bailed out UNDER ANY CIRCUMSTANCES. The directors should be forced to pay back the loans and stabilise the bank themselves.

There has been no evidence of anything strictly "illegal", but they wouldn't have hidden the loans if they hadn't known it was dodgy on some level.

And having done that they should be left to wallow in their own **** and should not have ANY of my money to help bail them out while they work away with their 100 million......

. . cant find anything pre-Sep 2008 . .

Manach · 12-10-2010 11:29pm

cloonton wrote: »

raise taxes. Yep, you hate me now, but I'd raise the higher rate by a percentage or two. I'm sorry, but anyone earning over €35400 can afford to pay something extra on their income over that amount, or at least they can afford to contribute a heck of a lot more then people earning less then that amount. Also, I'd take a token tax of, say 2% off all income. You earn money, you need to pay tax, esp in the hard times. tough.

jimmycrackcorm · 12-10-2010 11:35pm

PomBear wrote: »

Firstly I would have let Anglo crumble, it's a private business that made a series of bad investments

All very well to say now. But had Anglo been let go then the markets would have gone for the jugular of AIB, BOI and the rest believing that they were the same and they would not have believed the Government.

After all it wasn't just one bank in Iceland that failed....

What would you have done differently?

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