Sir, – I was bemused to read ("Finance staff went home to find out what was in budget, banking inquiry told", December 19th) of Rob Wright's surprise at the limited number of economists in the Department of Finance and his reported comment that "Part of the problem was that skilled economists moved out to set up the National Treasury Management Agency and without the expertise the department did not have the capacity to seriously question some of the regulatory decisions being made".
In case this goes by without challenge, I would like to make a few comments, as I was the chief executive of the NTMA from its establishment in December 1990 until December 2009.
A total of 25 people joined the NTMA from the Department of Finance when it began operations in late 1990/early 1991 and a handful of others joined over the years. Most were at that time in relatively junior to middle-ranking grades and, as far as I can recall, none had worked as economists in the department.
That all happened about 15 years before the crash – surely enough time to recover. Countries have recovered from the devastation of a world war more rapidly.
It was not as though the people in the NTMA had disappeared into the ether.
Up to the fundamental changes this week, the NTMA chief executive answered directly to the Minister for Finance and we were always available to give advice to the Minister of the day – indeed often whether wanted or not! – and also to any government or opposition TDs or Senators who wanted to talk to us.
An enormous range of additional functions were transferred to the NTMA over the years and it was not because politicians liked the colour of our eyes!
The problem was not lack of economists. Whatever about their number in the department, there were economists everywhere, in the Central Bank, the ESRI, the universities, the stockbrokers, the banks, etc, as well as the IMF, the OECD, the European Commission, the credit rating agencies, all making a good living from analysing and commenting on the Irish economy. In fact, I never hired an economist into the NTMA as I reckoned I could get any amount of economic advice free. The problem was, at its most basic, a lack of common sense.
Before we joined the single currency, we could deal with our excesses through resetting the clock, ie we devalued the Irish pound.
We then joined the German club, where we continued to play by our own rules. At times, we seemed to think we had discovered a new economic theory that applied to Ireland and allowed us to do things that others could not do.
Sometimes there may be an inevitability about a catastrophe. – Yours, etc,
MICHAEL SOMERS,
Donnybrook,
Dublin 4.