Sir, – I must take issue with Declan Coleman (September 13th) when he asks that your Lehman supplement (September 12th) should be compulsory reading for all third-level first year economic students, in the hope that they will learn from the mistakes of their elders.
Surely this is asking too much? This is not the first time the financial sector has collapsed, nor should it be called a one-off crisis of the current system. More importantly, it shows the contradictions of capitalism which has been shown to be so cyclical in its nature. May I be so bold as to suggest that universities discuss alternative economic theory? – Yours, etc,
PAUL DORAN,
Monastery Walk,
Clondalkin, Dublin 22.
Sir, – Under the headline “They saw it coming” (Lehman Effect supplement, September 12th), David McWilliams is credited with advising then minister for finance Brian Lenihan, on September 16th, 2008, to issue a limited bank guarantee.
However, on 28th September 2008, Mr McWilliams published a lengthy article in the Sunday Business Post recommending a blanket bank guarantee, which excluded bank shareholders but included all other creditors, including depositors and bondholders. There were no pre-conditions or caveats. In that article, Mr McWilliams claimed that not only would it not cost the state any money as it would never be called on, but it could also generate revenue as the banks might be charged for the guarantee.
The bank guarantee proposed in that article mirrored precisely the nature of the blanket guarantee issued a couple of days later by the Irish Government with, as we now know, disastrous consequences for the country.
What’s curious is how an economist who had cried wolf for several years about a property bubble could then turn around and recommend such a blanket bank guarantee. If he was right about the property bubble, then it would be inevitable that the banks funding it were going to be in deep trouble.
If there is to be a Dáil committee investigation into the circumstances surrounding the bank guarantee, then Mr McWilliams should be one of the first witnesses called to testify before it. – Yours, etc,
PETER MOLLOY,
Haddington Park,
Glenageary, Co Dublin.