Madam, – I agree with former taoiseach Garret FitzGerald in relation to his views on the damage done to Ireland’s financial standing abroad by the shrill statements of “celebrity economists”, who have seemed hell-bent on seeking publicity as harbingers of doom (Opinion, April 2nd). This is not to deny that some of these commentators are well-qualified in their profession or indeed that much of their analysis has been insightful and an important contribution to the national debate. However, the language used has frequently been intemperate, the presentation unbalanced and not in keeping with the best traditions of their profession.
The problem is that this sort of presentation is populist fodder for influential international journals. Our free market system is, inter alia, based on confidence and although our problems are severe, the extent of these problems has also been influenced by the degree to which some commentators have talked us into the abyss. Most notably in relation to the residential mortgage markets, we run the risk of creating a self-fulfilling prophecy when qualified professionals describe the problems in apocalyptic terms.
In our free-market system the market is king and the market’s risk analysis of Ireland has been influenced by this exaggerated and sometimes unbalanced presentation of the economic facts. – Yours, etc,
Madam, – Is it that the markets lack the capacity to assess the Irish financial situation, as Dr Garret FitzGerald has suggested, or is it that the former taoiseach lacks the capacity to assess the situation?
The Government’s banking fix will inevitably bring total government debt towards 120 per cent of GDP. Has Dr FitzGerald learned nothing from the economic catastrophe that was the 1980s in Ireland? If not, he should consult the readily available history of sovereign defaults and what happens to governments when total borrowing rises above 100 per cent of GDP. It is precisely because of the Government’s anti-market response to the banking crisis that it is even worse this time. Tragically the new Government is already rapidly running out of road. – Yours, etc,