Dublin Opinion

Posted in Irish journalism, Irish Middle Class | 5 Comments

5 Responses to “McWilliams the UnOriginal”

1. on 07 Jul 2010 at 5:45 pm1Donagh

   The column it was used for wasn’t very original either. He says that Ireland should default and restructure its debt, like Uruguay.

   Here’s Morgan Kelly from May 22, 2010:

   While most countries facing bankruptcy sit passively in denial until they sink – just as we are doing – there is one shining exception: Uruguay. When markets panicked after Argentina defaulted in 2002, Uruguay knew it could no longer service its large external debt. Instead of waiting for a borrowing crisis, the Uruguayans approached their creditors and pointed out they faced a choice.

   Either they could play tough and force Uruguay into bankruptcy, in which case they would get almost nothing back, or they could agree to reduce Uruguay’s debt to a manageable level, and get back most of what they lent. Realising Uruguay’s problems were largely not of its own making, and that it had never stiffed its creditors in the past, the lenders agreed to a debt restructuring, and Uruguay was able to return to debt markets within a few months.

   In the column McWilliams says that he was in Uruguay in 2007. But Uruguay defaulted in 2003, and has been cited by free-market economists ever since. No mention of who they owed the money to (US banks), how they got into that level of debt in the first place (US banks pouring money much the same way as German and French banks did in the Eurozone) or how the US Treasury helped them restructure their debt in an orderly way to ensure that the US banks got some of their money back.

2. on 07 Jul 2010 at 5:51 pm2LeftAtTheCross

   In fairness to him, he is now saying that the bank guarantee served its purpose at the time and should have been removed once the immediate crisis had passed (ok the crisis is on-going obviously, but I took him to mean that once the banking system survived the first wave of attack and a subsequently less panic stricken narrative had bedded down in the financial markets).

   Don’t shoot the messenger, I’m just recounting what he was saying in his “Outsiders” show at the Peacock.

3. on 07 Jul 2010 at 6:16 pm3Conor McCabe

   I know a lot on the left like him, and think he’s not the worst, but I’m in the other camp. Back in October 2008 he was praising the bank guarantee for being an Irish solution and not an imported one, and now he’s calling for Ireland to follow Uruguay’s example - even though back in 2008 Ireland’s national debt wasn’t the main problem, it was the private debt of the banks. But once we guaranteed those losses they became ours, so now we’ve got a sovereign debt problem. He’s saying that Ireland should now follow a country that defaulted on its debt, when the reason why this is even an issue now is because of the bank guarantee.

   and, as has been pointed out even on Irisheconomy.ie, Ireland’s bond rating started going south AFTER the bank guarantee, as it was clear that the guarantee was going to cripple us.

   I remember walking around Dublin the day after the bank guarantee was passed by the Dail and I was almost paralysed with disbelief that people were going about their daily lives not knowing the shit we had just been put into. I really was in a state of shock.

4. on 07 Jul 2010 at 7:33 pm4LeftAtTheCross

   I guess the question is what will happen when the bank guarantee expires? I saw it has been extended to Decamber now, as of last week or so. McWilliams was agreeing with you that the problem is the banks debt, not the national debt. Ok, with NAMA it has become the state’s, or is becoming so at any rate. Default now I guess is what he’s saying, before it gets even worse. I haven’t read his stuff in enough detail to comment any further actually

5. on 08 Jul 2010 at 2:18 pm5Conor McCabe

   McWilliams isn’t like Marc Coleman in that his analysis is based on some form of reality, while we should know which planet Marc Coleman is from as soon as Voyager One clears the heliosheath. My opinion of McWilliams is a minority one among the Irish Left, I know that, but I think there’s enough evidence there to make the argument.

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