Start Selling the Landbanks

Fine Gael are looking sillier than ever (if that's possible) with the double whammy of the ticking off from Garret Fitzgerald in Saturday's Irish Times and Richard Bruton's admission at today's Finance Committee hearing that his 'good bank' alternative to NAMA is riddled with inaccuracies. This is astonishing, considering Fine Gael are the main opposition party in the State and pay a small army of cleverclogs to come up with these proposals. What is worse, is that it shows the world that Ireland is completely bereft of anything that could be called an alternative government at the moment, which makes it even more imperative that the present incumbents get their act together and come up with a workable plan.

It also transpired today that the European Central Bank (which is now the only thing stopping the banks closing up shop for good) is becoming increasingly uneasy at the unfairness of the government's NAMA proposals as they stand (for the taxpayer) and their leisurely progress to implementation.

At this rate, former Taoiseach Fitzgerald's warning on the IMF being called in by Christmas, is looking ominously accurate. The pity is that Brian Lenihan seems to be getting his act together, and is now willing to listen to alternative views on NAMA (or is it the Greens breathing down his neck that is working the transformation?). Either way, the politicians are having to change their tune in the face of a remarkable groundswell from the ordinary taxpayers, who are now fully engaged in this crisis and are no longer willing to take anything on trust from the establishment insiders who brought us to this pass.

Lenihan is now talking about holding back some of the public money from the banks until it is proven that the bad loans are being redeemed by a rising market at some time in the future. This is an improvement on the original plan to wait until there was another property bubble in order to get our investment back, which was frankly mad. However, there is still an unwillingness to let the market do it's stuff and to start selling off some of the overvalued land banks and commercial property now, to let the price find its own level.

This scares the pants off the insiders, because they fear the collapse of the banks, the speculators, and, perhaps, the major political parties. Let's not forget, that as sure as God made little acorns, all the politicians have big shareholdings in the banks. The last thing they want is a collapse or nationalisation, which explains a lot of the doomladen talk about those possibilities from ministers over the last year. But the 'lost decade' in Japan, during the 90s, when the politicians did a major cover-up of the state of the banks and poured public money into them, is a stark lesson in what happens to an economy when harsh medicine is delayed just to favour vested interests. We need to burn away the accumulated greed and lies that these massive bad loans represent, and the only way to do that is to pay the banks the going rate for them, right now. And the only way to do that is to start selling them. Now!