Willem Buiter on the good bank idea, which he originally proposed here and which has been taken up as Fine Gael policy by Richard Bruton - see his IT piece today. The topic is also discussed on Irish Economy by Kevin Whelan and the comments provide plenty of food for thought and seem to point towards nationalisation as the best solution for Ireland. Basically the idea is that a new ‘clean’ bank is set up by the state and which holds capitalisation funds. It then buys the ‘good’ assets from the existing banks and leaves the ‘toxic’ assets with the existing institutions. The shareholders of the old banks would then have to hold on to the toxic assets and sell them at a future date. They would only get a proportion of their original value, but its better than nothing. There is a problem though. The Irish Government’s blanket guarantee scheme still covers the losses to shareholder that would occur in the remaining bad banks. Stupid government.
Update: IT Breaking news headline suggests that Brian Lenihan thinks government should set up a ‘bad bank’, but then in the article he says that it shouldn’t, but as he explains himself it seems that he thinks its a good idea.
Discussion
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Of course, the idea floated at the weekend by Wolfgang Schäuble is a double-edged weapon. It would give that fund the same very tough tools of conditionality and intervention in the fiscal policies of individual countries as the International Monetary Fund. From the German perspective, that would be its primary purpose.
But just as surprising is the fact that the initiative, with the promise of other unspecified measures to bolster economic policy co-ordination in the eurozone, should have come first from Berlin rather than Paris.
Normally, the more dramatic flights of fancy in the European Union are a French prerogative. The German tradition is far more cautious. French fuites en avant are regarded with irritation. But only if Berlin signs up does anything usually happen.
In the end, big European initiatives seldom come to pass at all unless the two largest founding states bury their differences and do a deal.
Iceland is facing a referendum tomorrow on whether to accept the deal carved out between Iceland, The Netherlands and Britain on the Icesave debt, and its likely to vote no. But will it make any difference. "As if the government wasn’t in enough trouble with public opinion here at home, Prime Minister Jóhanna Sigurðardóttir has publicly announced that she plans to shun the referendum tomorrow.
“To me it is pointless and I find it is very sad that the first referendum since the founding of the republic revolves around legislation that is already obsolete. Consequently I see no point in taking part in this referendum,” Jóhanna told Fréttablaðið.
Granted, that opinion is shared by many people. However, in the view of a large proportion of the Icelandic nation, and even of the world*, this referendum is about so much more. Even if this is Jóhanna’s personal opinion, stating it so publicly seems like political harakiri."
John Ross on how Germany's trade figures shows that their economy is 'continental', that is its similiar to the US, India and China as it relies solidly on its European market.
"The fact that Germany is operating in a continental scale economy, Eurozone Europe, with a fixed exchange rate, allows it to gain or maintain tremendous economies of scale. Conversely introduction of unstable exchange rates,including the possibility for major European trading partners to carry out competitive devaluations, would almost certainly make it impossible for Germany to maintain such a high proportion of exports in its economy - that is it would greatly weaken the 'continental' scale of its economy." Meanwhile…Handelsblatt reports that German Chancellor Angela Merkel yesterday rejected a call from Spanish PM Jose Luis Zapatero for "EU-solidarity" for Greece. She also warned that the euro would not be stable without radical cuts in the budget deficits of member states.
Cole dismantles Martin Kramer's astonishing claim that forcing the Palestinians to have fewer children by starving them would resolve the conflict between Israel and Palestine.
"Martin Kramer revealed his true colors at the Herzliya Conference, wherein he blamed political violence in the Muslim world on population growth, called for that growth to be restrained, and praised the illegal and unconscionable Israeli blockade of civilian Gazans for its effect on reducing the number of Gazans.
M. J. Rosenberg argued that Kramer's speech is equivalent to a call for genocide. It certainly is a call for eugenics."
Haitian's concerned about foreign nationals taking advantage of the catastrope in their country to take children - a justifiable concern - are described as an 'angry mob of Haitian men' when confronting an Irish female 'charity worker' (as opposed to an agent of a private adoption agency).
"When we arrived at the airport we were surrounded by an angry mob of Haitian men," she told the Irish Independent. "They started getting very aggressive and were shouting at us. It was very scary, especially for the kids."
A number of high profile Shell to Sea campaigners including 'the Chief' Pat O'Donnell and Maura Harrington sought to appeal certain criminal convictions in cases heard last week at Castlebar Circuit Court from 9th - 11th February. A few of the appeals were successful but some of the convictions were upheld by the court.
Also Facebook | Pat O'Donnell http://bit.ly/dyK5jh
Michael Perelman provides some details and short excerpts from his current project a book which he hopes to publish called Invisible Handcuffs. It includes an incredible story of 17th Century economist William Petty, who:
Besides having the distinction of being the first economist on record to have raised someone from the dead, [...] went on to become one of the dozen founders of the Royal Society, as well as a naval engineer, professor of music, scientist, inventor, assistant to Thomas Hobbes, cartographer, pioneer in public health and demography, member of Parliament, leader in the conquest of Ireland, an adviser to the King, and a notorious land pirate who accumulated hundreds of thousands of acres of confiscated Irish land.
See Hugh Green’s post on William Petty’s economic proposal for Ireland. In fact, there are two Irish connections, as he talks about William Cantillon, of Kerry, too.
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