# Brian Lenihan and credit crunch



## capall (17 Jan 2009)

How do people feel Brian Lenihan is performing as Finance Minister?

At least he is communicating,yesterday he was on all the radio shows and the rte news.
I think he is doing ok in a very difficult situation


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## webtax (17 Jan 2009)

He comes across a lot better than Cowen and is happy to put himself forward for tough questioning.
Guaranteeing Anglo & Irish Nationwide back in September was a monumental error though.


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## mercman (17 Jan 2009)

webtax said:


> Guaranteeing Anglo & Irish Nationwide back in September was a monumental error though.



Agree with your comments. However, it is becoming fairly clear that the information being passed to the Govt by the Banks were and are somewhat short of the truth, especially in relation to their loans/bad and Doubtful Debts etc.

Moreover, the Central Bank who are meant to be inspectors of the National Banking Institutions have been keeping fairly quite so to say.


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## webtax (17 Jan 2009)

True, but the government should not be relying on the banks to give them information. Would anyone trust them given their record! If the central bank & regulator had been on the ball then the information should have been available with a couple of phone calls.

It's the lack of regulation coming back to bite the government. When all the over-charging/offshore scandals came to light the watchdog should changed to a bloodhound and stayed that way. Instead the PD's & McCreevy decided to go with the lightest possible touch, which McCreevy is still trying to promote in Europe to this day.

And to think some want McCreevy to come back as the new messiah to save us all.


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## smiley (17 Jan 2009)

capall said:


> I think he is doing ok in a very difficult situation



I agree. He is doing well compared to Cowen. Lenihan has a statesman like character and a bit of charisma. It does help. Cowen on the other hand is coming across very badly.

Lenihan will be the leader of ff when cowen is dethroned.


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## mercman (17 Jan 2009)

webtax said:


> It's the lack of regulation coming back to bite the government. When all the over-charging/offshore scandals came to light the watchdog should changed to a bloodhound and stayed that way. Instead the PD's & McCreevy decided to go with the lightest possible touch, which McCreevy is still trying to promote in Europe to this day.
> 
> And to think some want McCreevy to come back as the new messiah to save us all.



100% in agreement with you. Unless the Govt. make some significant inroads in forcing the Banks to release the complete picture and information, this country is going to embark down a very slippery slope. I was and still am infavour of bringing back McCreevy, simply because it was his schedule of very poor controls that has left us in this mess. The Senior Civil Servants appear to have their heads stuck firmly in the sand and instead of little old Ireland been known for its crucial tight rules on Banking it does appear that we are about to become the Hillbillies of the modern Financial World. God only knows what the state of the BoI and the AIB are ??


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## Strathspey (17 Jan 2009)

I think what has been forgotten in this whole debacle is that Ireland is not a sophisticated nation although we pretend to be. It's still a nation of tradesmen and farmers who got lucky with a low corporation tax rate, a few years ago. To develop a disciplined mindset like the Scandinavians or a Germanic mindset is going to take a few more decades but certainly something we should aspire to. At the end of the day Ireland achieved very little on it's own. When it comes down to it, we were little more than those African countries in receipt of development aid. We owe a lot to the German nation and I have yet to read or hear of a single Irish person express an iota of gratitude to that effect for picking us off our knees in the '70's and continuing to aid us through the '80's and into the boom years.


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## webtax (17 Jan 2009)

Strathspey said:


> To develop a disciplined mindset like the Scandinavians or a Germanic mindset is going to take a few more decades but certainly something we should aspire to.



A good point. Hopefully once the crisis passes we will take the time to consider what sort of society we want to have. It seems we went straight from poverty to greed without considering what sort of a nation we were becoming. We need to move beyond the simplified Boston or Berlin argument and decide what sort of political system we want to deliver the public services we require. There is such a high level of cynicism around at the moment that we need fundamental change.


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## onekeano (17 Jan 2009)

smiley said:


> I agree. He is doing well compared to Cowen. Lenihan has a statesman like character and a bit of charisma. It does help. Cowen on the other hand is coming across very badly.
> 
> Lenihan will be the leader of ff when cowen is dethroned.



Eh hello!!! Smiley, your real name isn't Mary is it? That's Auntie Mary from Athlone? "Statesman" Lenihan? More like a rabbit in headlights...... every he does he explains with "we didn't have any choice in this". And as for charisma.......he has the same charisma as a wet fish! Regarding his possible elevation to top job in Fianna Fail all I can say is they probably deserve that - thing is even if he gets the job he'll never be Taoiseach.

Roy


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## mercman (17 Jan 2009)

onekeano said:


> Regarding his possible elevation to top job in Fianna Fail all I can say is they probably deserve that - thing is even if he gets the job he'll never be Taoiseach.



So Fine Gael have so much to offer ??? The only thing they have offered for years is a cynical criticism of every single thing that was done in the country. A complete parcel of halfwit losers. Collectively they are as useful as an Ashtray on a Motor Bike.


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## The Edge (18 Jan 2009)

Strathspey said:


> When it comes down to it, we were little more than those African countries in receipt of development aid. We owe a lot to the German nation and I have yet to read or hear of a single Irish person express an iota of gratitude to that effect for picking us off our knees in the '70's and continuing to aid us through the '80's and into the boom years.


 
This is amusing. Our membership of the Eurozone (completely dominated by the requirements of the German economy) is the primary reason for the property bubble and resulting systemic banking collapse, but you want us to doff the cap to Germany? Simply hilarious.


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## onekeano (18 Jan 2009)

mercman said:


> So Fine Gael have so much to offer ??? The only thing they have offered for years is a cynical criticism of every single thing that was done in the country. A complete parcel of halfwit losers. Collectively they are as useful as an Ashtray on a Motor Bike.


 Am not and never have been a member of any party, regarding FG have to say I think Bruton has been very consistent and they would be better off with him as leader. Regarding FF I would put most of the blame on Bertie and their cosy relationship with the developers and his infamous "social partnership" which was basically a euphemism for the unions to get their snouts into the trough. And Cowan after all was Minister for Finance for 4 years while the public paybill was exploding!

Roy


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## mercman (18 Jan 2009)

keano. I wouldn't dispute most of the comments you have made, but remember the times and the amount of money that was slushing around at the time. Furthermore and more importantly you might recall when Peter Bacon undertook his last report, signaling his recommendation to significant changes it was the opposition that went on a free for all. The problems we are having in this country are the same as in every modern economy at present. Banks undertaking ridiculous lending mainly for the inhouse payment of Bonuses. When the Central Bank in Ireland issued many warnings it was the opposition that were shouting to make the point. Sure I will agree that this Governemnt has made mistakes and the waste of money in individual Government departments is sickening. But frankly does anyone reeally consider with the opposition which was there and even now, that they could do anything much better.


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## darag (19 Jan 2009)

capall said:


> How do people feel Brian Lenihan is performing as Finance Minister?
> 
> At least he is communicating,yesterday he was on all the radio shows and the rte news.
> I think he is doing ok in a very difficult situation


He is a trained barrister so I would expect him to be able to communicate and argue well.

Unfortunately, his job - that of finance minister - requires different skills than those of an orator.  He requires skills in the areas of finance, business, banking and economics.  He should have a high level of numeracy and analytic abilities.  He should be able anticipate the economic and financial effects of his decisions.  In all these areas he, in my opinion, has demonstrated fatal weakness.

So no - the fact that he comes across as decisive while giving radio interviews, etc. does not make me think he is doing a good job as a finance minister.  The fact that he has made some very  poor (in my opinion) decisions which may well cost us 10s of billions of euro makes me think he is a very poor finance minister.


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## mathepac (19 Jan 2009)

darag said:


> ...  He requires skills in the areas of finance, business, banking and economics.  He should have a high level of numeracy and analytic abilities.  He should be able anticipate the economic and financial effects of his decisions.  In all these areas he, in my opinion, has demonstrated fatal weakness...


I honestly believe that comments like these betray a lack of insight into how government works.

Lenihan is supposed to have his officials to do the number crunching - that's what civil servants are for, or at least that's what they are being very well paid to do. Why have a dog and bark yourself?

I never voted for any prospective TD based on his/her ability to add or subtract, to analyse a balance sheet or annual report; the bean counters. economists and data analysts are in the Department of Finance, at Briano's beck and call. "Analyse this", quoth Briano. "Yes, Minister", respondeth a chorus of lackeys, civilly, diving for their networked PDAs (or quills and ledgers if they are there a while).

Briano's job as a senior member of Cabinet is to deliver the headlines, then wheel in the bean-counters and have them quizzed by Biffo & Co regarding the detail of the underlyings, the trends and the recommendations.

Cabinet decisions are made collectively (no finger-pointing afterwards) and delivered by The Boss (unless they are spectacularly unpalletable), having been massaged and codified by the "fondlers" (who are paid even more than the bean-counters).

If Briano's (or the Cabinet's) decisions appear poor in retrospect, it is hardly due to him being numerically challenged - rumour has it that lawyers can even  do sums; the more likely reason is that he and they were being given garbage by their officials, and hung out to dry by the regulatory bodies - good, old-fashioned GIGO syndrome.

And no I'm not a FF'er nor am I a fan of the Lenihan dynasty.


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## Padraigb (19 Jan 2009)

mathepac said:


> ...If Briano's (or the Cabinet's) decisions appear poor in retrospect, it is hardly due to him being numerically challenged - rumour has it that lawyers can even  do sums; the more likely reason is that he and they were being given garbage by their officials, and hung out to dry by the regulatory bodies - good, old-fashioned GIGO syndrome...



That's far too kind to the politicians, and grossly unfair to their officials. Much of the advice accepted by ministers emanates from sources outside their departments, including representations from parties that stand to benefit from political decisions. Isn't that one of the reasons why we have had those expensive tribunals?


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## Towger (19 Jan 2009)

mathepac said:


> I honestly believe that comments like these betray a lack of insight into how government works.
> 
> Lenihan is supposed to have his officials to do the number crunching - that's what civil servants are for, or at least that's what they are being very well paid to do. Why have a dog and bark yourself?


 
The problem which can be clearly seen from the Budget is they did not let civil servants do the work in advance. Do you honestly believe that Revenue wanted to bring in the likes of the Income Levy and all the messing and administration that ended up going with it. Stick a percent or two on PAYE, PRSI or the Health Levy, much simpler than bringing in a totally new tax. Like wise there was no flesh put on the Car Parking Levy or Bike scheme in advance. They were just picked from a list of one line ideas with no thought put into them. A day later Gormley sounded like a fool when interviewed on the radio, when he could not even answer the most basic questions.


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## shotgun (19 Jan 2009)

The whole shower need to be kicked out asap - It would send out the correct message to outside investors at a minimum. FF have been far too cozy with thier relevant Govenment depts for FAR to long. 

The thoughts of FF running the Irish Banking sector will make the Haughey years look like a wet dream. Imagine if your political alliances determine if you get a loan or not....? We separate the Judicial and Political roles in govenment in this country for a good reason. The same rule should apply for Banking and Politics.


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## Towger (19 Jan 2009)

shotgun said:


> The whole shower need to be kicked out asap


 
Do you think FG and co. would do any better! At this stage none of them are up to running the country :-(


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## Sunny (19 Jan 2009)

Towger said:


> Do you think FG and co would do any better!


 
FG have lost all credibility since backing down from their demands for public sector pay cuts. They are playing politics and games at a time when the Country is crying out for any sort of strong leadership.


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## shotgun (19 Jan 2009)

Towger - I'm not sure to honest but they couldnt be much worse - my fear would be a dramatic lurch to the left.

Surely if we are asking for the people who ran the banks over the last few years to go the then same rule should apply the polictical masters who we elected and were supposed to be running the show over the last ten years.

Its nothing personal - I think Briano is a nice guy but his boss sat on his hands while he was FinMin and now he's left trying to clean up the mess


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## shotgun (19 Jan 2009)

Sunny - Yep I agree FG have been wobbly  - but politicians will always play politics  - My main point is that we need to send a clear message out that we have control over the critical institutions and services in our country


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## mathepac (19 Jan 2009)

Towger said:


> ... A day later Gormley sounded like a fool when interviewed on the radio, when he could not even answer the most basic questions.


God help us, that would be consistent with most of his performances, including more recent ones.


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## shotgun (19 Jan 2009)

The greens should stick to green issues  - Did you hear Mansearagh on Marion Financane yesterday  - now there's a buffoon......


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## Askar (19 Jan 2009)

darag said:


> He is a trained barrister so I would expect him to be able to communicate and argue well.
> 
> Unfortunately, his job - that of finance minister - requires different skills than those of an orator. He requires skills in the areas of finance, business, banking and economics. He should have a high level of numeracy and analytic abilities. He should be able anticipate the economic and financial effects of his decisions. In all these areas he, in my opinion, has demonstrated fatal weakness.
> 
> So no - the fact that he comes across as decisive while giving radio interviews, etc. does not make me think he is doing a good job as a finance minister. The fact that he has made some very poor (in my opinion) decisions which may well cost us 10s of billions of euro makes me think he is a very poor finance minister.


 
His predecessor, our Taoiseach, is also a Lawyer. He allowed public inflation to spiral out of control. He opted for an extended victory lap around Offaly singing on the back of a tractor; as if his leadership was the winning of an all Ireland or Heineken cup. As Finance Minister Cowen always sounded as if he was reading from his Departments scripts; but it is clear that he was either ignorant of the imminent collapse of the asset bubble and government over reliance of taxes on this bubble, or he is simply stupid on all things economic. He certainly took his eye off the ball. Maybe there is a lesson in this.

I agree with earlier poster that Ireland inc. has a lot of the farmer and tradesmen mentality. Most of the 280k employed in the construction industry during the boom are not well educated, but were coining it in on the sites. There is now a structural shift in employment and their low value skill set will never be as well compensated, and they are going to have to adjust their expectations accordingly or upskill. Perhaps they can become astronauts through FAS sponsored programme, and the billions we wasted on this state agency can bear some fruit.


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## Pauliwalnuts (19 Jan 2009)

Askar said:


> Perhaps they can become astronauts through FAS sponsored programme, and the billions we wasted on this state agency can bear some fruit.


 
Askar that's brilliant. You just made me laugh aloud at my desk.


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## darag (19 Jan 2009)

mathepac said:


> I honestly believe that comments like these betray a lack of insight into how government works.
> 
> Lenihan is supposed to have his officials to do the number crunching - that's what civil servants are for, or at least that's what they are being very well paid to do. Why have a dog and bark yourself?
> 
> I never voted for any prospective TD based on his/her ability to add or subtract, to analyse a balance sheet or annual report; the bean counters. economists and data analysts are in the Department of Finance, at Briano's beck and call. "Analyse this", quoth Briano. "Yes, Minister", respondeth a chorus of lackeys, civilly, diving for their networked PDAs (or quills and ledgers if they are there a while).


That's not how the executive branch generally works in this country.  Ministers are  not simply the  public face for decisions made by technocratic monkeys who "count beans".  Ultimately they make the executive decisions.

In the case of the banking crisis, BL would have heard disparate arguments from senior civil servants,  banking executives, representatives of the regulator, the central bank, outside consultants and would have also heard the views of our neighbours in the EU.  From all of these views, he made and makes decisions.  I find it very odd that you would think that lack of numeracy, understanding of finance and banking, economics or analytic skills is no barrier to having to deal with all these facts, figures, opinions and analysis (often contradictory) and chose the course of action which is most likely to benefit the country.

The ability to add or subtract which you seem to disparage as useless is the least I would expect in someone who is expected to make the final decisions on the spending of billions of tax-payers money.

And it is not "with retrospect" that his decisions can be viewed as suspect.  The original guarantee was widely criticized and this course of events - wrt to Anglo at least - was predictable at the time.


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## horatio1 (19 Jan 2009)

shotgun said:


> The greens should stick to green issues - Did you hear Mansearagh on Marion Financane yesterday - now there's a buffoon......


 
Did you hear him on morning Ireland this morning? He sounded like a hyaena every time the presenter tried to interject.If this is the best that Fianna Fail can put out on the national airwaves we really are in a sad state!


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## Strathspey (19 Jan 2009)

The Edge said:


> This is amusing. Our membership of the Eurozone (completely dominated by the requirements of the German economy) is the primary reason for the property bubble and resulting systemic banking collapse, but you want us to doff the cap to Germany? Simply hilarious.


Are you now blaming Germany for our problems? Now that's not hilarious, that is sad. What Ireland in all it's false confidence has forgotten, is that Europe doesn't actually need us, but hell, do we need Europe. Not only should we be doffing the cap to Germany, but we'll probably end up going down on bended knee, pleading for a bailout.


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## Spondulicks (19 Jan 2009)

The problem is the Government's finances have been overwhelmed at the same time as a banking crisis. Did the Dept of Finance do any stress testing on the exchequer flows because there is no evidence over the last 10 months of any sense of a plan to deal with a downturn. It is pathetic and we will pay for it heavily.


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## mathepac (19 Jan 2009)

darag said:


> ... Ministers are not simply the public face for decisions made by technocratic monkeys who "count beans". Ultimately they make the executive decisions...


 That's what I said - decisions are made collectively at the Cabinet table, not by any one individual.


darag said:


> ...  I find it very odd that you would think that lack of numeracy, understanding of finance and banking, economics or analytic skills is no barrier to having to deal with all these facts, figures, opinions and analysis (often contradictory) and chose the course of action which is most likely to benefit the country...


He wasn't elected on the basis of his analytical or mathematical skills - he was elected because he was a party member with a powerful constituency machine and generations of party contacts and was seen as a candidate that could further the needs / wants of the electorate.

Maybe you believe that the facts of his election and promotion to Finance Minister shomehow magically imbued him with these abilities. The reality is they didn't and therefore his reliance on his officials / consultants to do the number crunching and word-processing.

At some stage in the future we may compare candidates' CVs before elections and decide who should be Minister for Finance, but for now we are stuck with the current processes which exclude us from that decision.


darag said:


> ... In the case of the banking crisis, BL would have heard disparate arguments from senior civil servants ...


I agree


darag said:


> ... representatives of the regulator ...


civil servants, who clearly didn't know a lot and did even less


darag said:


> ...  the central bank. ...


civil servants, who didn't know much


darag said:


> ... would have also heard the views of our neighbours in the EU ...


more civil servants


darag said:


> ... From all of these views, he made and makes decisions...


No he would have made representations to Cabinet who ultimately took the decisions and based on the fact that most of the input they / he got was based on inaccuracies, their decisions were poor, and continue to be for the same reasons.


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## darag (19 Jan 2009)

Mathepac, I honestly have'nt a clue what you are arguing for or against.

As far as I am concerned, the thread was opened by the simple question


> How do people feel Brian Lenihan is performing as Finance Minister?


My answer was similarly brief and simple and to the point; i.e. that I believed that he had done very poorly as a result of his apparent lack of skills and knowledge in the relevant areas.  In particularly numeracy and understanding of banking, finance and economics.

The only thing I got from your first response was that the skills I mentioned are of no import for a finance minister.  Fair enough I understand this is what you believe even though I disagree strongly with it.  Everything else (such as how people get elected and your generally hostile attitude towards what you imagine to be the relationship between ministers and their civil servants) has no relevance to my response to the original question as quoted above so I don't know why it's directed at me.

I'm not sure what it is that has gotten you worked up.  I especially don't know why you'd go to the bother of selectively skipping parts of a sentence I wrote just to be able to repeat the phrase "civil servants" over and over?


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## bambam (20 Jan 2009)

As one of the posts made the point - why would you make such monumental decisions based on heresay from the vested interests.  Mind you - we were supposed to have a regulator.

As in any major corporate entity you have internal audit, risk assessment, we have external auditors, supposed checks and balances.  How could we end up in a situation where national institutions and supposed bastions of prudence end up in this situation.

Its like WALL STREET the movie, where no one could lose.  Everone making huge bonuses, based on what?  It;s absolutely bizarre but everyone was winning and no one wanted to admit that the Emperor had no clothes!  Outrageous!  Who will pay for this in the future?  The people coming close to retirement? The pension funds decimated?

Will there be a clawback on all these banker bonuses - wealth created on nothing?


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