The oligarchs strike back

Not content with having marched the state into virtual bankruptcy, Ireland’s leading property developers are banding together to dictate to NAMA the terms under which the taxpayer shall be allowed to rescue the banks and the economy from the mess they made. The Sunday Tribune reports on the creation of a new group, the Irish Property Developers Federation (IPDF for short, although Bankrupts Anonymous may yet be more therapeutic for the individuals concerned).

There is no doubt that the taxpayer is being hammered by the very creation of NAMA, there should never, ever have been a need for such an institution in the first place. A debate rages as to whether the current structure is a good or bad deal for the taxpayer, with some credible voices at irisheconomy arguing that nationalisation would represent a better deal for the taxpayer (but not Ireland’s other set of oligarchs – the bankers). It seems that IPDF are not satisfied with merely saddling the taxpayer with their non-performing loans (in addition to those jumbo-mortgages for shoebox apartments, ‘commuting’ distance to Dublin in Athlone, Portlaoise and Gorey ), they want more.

I am sympathetic to the concerns of solvent developers that their loans may be sold to NAMA. However, with significant residential and commercial oversupply and current prices still in fantasy land, providing ridiculously low yields I’m sure many self-certified ‘solvent’ developers will turn out to be nothing of the sort. The tent at the Galway races may be consigned to history but I suspect these oligarchs retain significant political influence. If so, this is potentially disastrous for economic well-being of the country.

No bio, some books worth reading – The Rational Optimist: How Prosperity Evolves – Matt Ridley .

Crisis Economics: A Crash Course in the Future of Finance -Nouriel Roubini, Stephen Mihm