Selling Nama to sceptical public requires political will

 

Nama, like the Lisbon referendum, requires Government to make the case to the people

THE EARLY phase of the National Asset Management Agency (Nama) debate has many similarities with public discussions during the first Lisbon referendum last year.

The proponents’ difficulty is endeavouring to sell a complex initiative to a sceptical public at a time when politics in general and the Government in particular are very unpopular. Debate concerning the merits of the proposal comes amidst anger not just at politicians but also at bankers and developers. Like Lisbon, it is easier to play the populist card on Nama, to scaremonger about its consequences or encourage an “if you don’t know, vote no” stance.

The debate is made all the more difficult because, like the situation prevailing during the first Lisbon debate, basic information about the Nama proposal has not been laid out. Before there can be any hope of wider popular support for an initiative of this scale, there needs to be a dramatic improvement in public levels of understanding. The Government needs to explain repeatedly how this scheme will work and reiterate its central objective: namely, the rebooting of the financial system so that it can better support a working economy.

In the past three weeks more time has been allocated to squabbling over issues surrounding the proposal than to shedding light on its contents. In all that noise fundamental features of the Nama project have been distorted or misunderstood. These include that Nama will buy loans rather than property, that developers will still be liable for the full amount of their loans and that the success of Nama is contingent on a modest improvement in our economy and property market over the next five to 10 years and not on a return to a bubble.

The intervention this week of 46 academics lecturing in economics, banking and business, headlined, “Nama set to shift wealth to lenders and developers”, is actually quite curious.

Their decision to contribute to the debate is of itself welcome. This is a policy area where the public could do with the benefit of as much information as possible and observations from a collective body, many of whom have relevant expertise, is a very good thing.

What is surprising, however, is the limited and broad-brush nature of their contribution. One might have thought that such a group giving the public the benefit of its expertise could have done so in a more substantial manner than merely affixing their names to what is in effect a lengthy letter.

At this time of national economic crisis one might have wished that these 46 academics had applied their trained minds to jointly publishing an agreed and comprehensive treatise on the state of our banking system, the prognosis for our property sector and/or our general economic circumstances.

At a minimum they could have given us a detailed commentary on the legislation as published with proposals for specific amendments to enhance its workings rather than. If they were not prepared to engage at all with the Nama proposal then perhaps they could have given us an agreed, worked out and detailed alternative proposal. They could also have assisted the debate by giving us a full assessment of the Labour Party’s nationalisation proposal as against Fine Gael “good bank” option.

Their article was apparently circulated to 250 lecturers. The fact that there are so many third-level teachers lecturing in this area will itself be a revelation to the general public especially since we heard so little from them as a collective during the boom years. A handful of them were among those expressing concern about the property bubble and the extent of the public exchequer reliance on revenues from that sector but as many again bought into and shored up the positive prognosis for our economic bubble.

In many ways the article published on Tuesday was akin to the joint letter signed by several lawyers last month following the publication of the “gangland” legislation with the distinction that the former was signed by legal practitioners rather than legal academics and actually concerned itself with the content of the legislation at issue.

The Nama legislation on which the 46 chose to comment is of course lengthier and more complex, which makes it difficult to believe that all 46 had the opportunity to give it detailed consideration in the two weeks between its publication and the circulation of the draft article. That may be why much of the article instead of being a detailed economic analysis was merely a repetition of the vague political charges which have become the staple output of its original author.

Indeed the nature of the debate around Nama this week leads one to conclude that we could do with less politics from some of our economic commentators and perhaps a little more economic understanding from some of our politicians.

When it comes to the relevance of expert opinion in any field, the words quoted by

Mary Robinson in a wider context last weekend seem apt when she said “just as it is a truism to say that the law is too important to be left to the lawyers, so the problems facing Ireland are too important to be left to the economists”.

While academics have the luxury of always questioning, debating and redebating, ultimately the decisions about Nama must be made in the political realm.

The Cabinet has often been criticised for delaying or failing to show leadership and yet when it reiterates its intent to proceed with Nama, while open to suggestions for improvement, it is accused of rushing or bullying.

Cabinet, unlike a symposium or a blog, is a decision-making body. Governments have to decide and then seek parliamentary approval for their policies.

Having made its decision to initiate Nama, the Government should now steer the matter through both Houses of the Oireachtas and get on with the job.