# McWilliams to address Irish Skeptics - Tuesday 10th November



## Brendan Burgess (9 Nov 2009)

Our next lecture will take place on Tuesday November 10th at 8.00pm in the Aston Suite, Alexander Hotel, Merrion Square, Dublin 2 (around the corner from the Davenport). We are delighted to welcome David McWilliams who will address the above topic. Admission as usual is €3 for members and concessions; €6 for non-members.
 David will be well known to many of you. He has worked in the Central Bank of Ireland, UBS Bank and Banque Nationale de Paris. He is a popular journalist, broadcaster and documentary maker and has published two books, “The pope’s children” and “The generation game”. His third book, “Follow the money” is published today (October 30th). His latest documentary “Addicted to money” has just finished its run on RTE and will be shown in Australia next month. More information is available on his website at www.davidmcwilliams.ie.
 Given David’s popularity, we advise you arrive early on the night.


----------



## Purple (11 Nov 2009)

I would have liked to have gone but couldn't manage it.
How did it go?


----------



## Shawady (11 Nov 2009)

Purple said:


> I would have liked to have gone but couldn't manage it.
> How did it go?


 
He is speaking at Waterstones in Dawson Street next Tuesday.

http://www.independent.ie/opinion/c...-must-take-control-of-our-future-1939102.html


----------



## onq (11 Nov 2009)

Brendan said:


> *<snip>*
> Given David’s popularity, we advise you arrive early on the night.



He's so popular with me that I didn't go.

I am tired of his caricatures and vignettes of Irish life.
I am tired of his solutions proposing impossible or irrelevant solutions to this crisis.
I cannot tell you how tired I am of seeing him parade around various airports waffling on ecomomics.

He seems to have been all cosy with the government until recently when he had a go at them in the last SBP.
Was this because of a lack of a big payday for him for organizing the Farmleigh bash, as reported in the papers, I wonder?
I wish to God he'd never written a book, never name-dropped anyone and instead gave the best advice to Cowan to help mitigate or avoid this mess.

But he did, did and didn't in that order and that's what we're left with - 


 Ireland tied to the Euro
 NAMA overpaying for toxic assets
 Banks bloated with taxpayers money
 A generation of our children indentured
 And books filled with floppy-haired economics.
 FWIW

ONQ.


----------



## Brendan Burgess (11 Nov 2009)

I went and I have raised his big idea for rational discussion in this thread. 

Onq - I fully agree with your attitude to McWilliams. I was sitting at home last night at 7.30 hoping it would rain to give me an excuse not to go. But it was a beautiful evening. I wasn't wrecked after a day's work. I had absolutely no excuse not to go. I am a member of the Skeptics Society and go to all their meetings. 

I would guess that there were 150 present, up from the usual 80 or so average attendance. 

He started off by telling us that he was the most unpopular man in Ireland. OK, at least I was able to agree with him on something at last.



> I am tired of his caricatures and vignettes of Irish life.


Well, you are lucky you did not go
We had his history of writing speeches for the Governor of the Central Bank.
We had him washing dishes with Rastas as a student in the Dorchester Hotel.
We had him representing the Central Bank explaining why the Irish currency would not break the link with the mark at the same Dorchester Hotel two years later.
We had the Chairman of UBS telling him he was the best speaker and the best liar he had ever heard.
We had a  pot belied Irish taxi driver telling him about his apartment purchases in Turkey.
We had his wife's friend wanting to show him her new island.
We had his granny's front room which was kept for the visits from the priest and the big farmer. 

I was the first to speak. I told him that I had started to read the serialisation of his book in the Sunday Business Post but gave up when the lift door opened and the Gardai shouted "Get redser". I told him I could not read any more of that.

I told him that he had a valid point to make, but that he was turning me and others off by all the rubbish. If I wanted comedy and story telling, I would go to the Laughter Lounge. As Skeptics, we wanted rational discussion, not ... ( it's very difficult to capture the tone of my speech without breaking the posting guidelines banning bad language) 

Maybe the rubbish about Miriam O'Callaghan seducing him and Brian Lenihan eating garlic might sell books, but they turned serious people off. (He acknowledged that this was a big mistake but claimed it was not done to sell books) 

He replied by saying that when economists want to obfuscate,they talk numbers. Economics is very simple. He likes acting as a child, questioning everything and being open to ideas. People like his stories, he said. 

But his storyteling is seriously ingrained. In response to other questions, he would say "I know that some of you, sorry one of you, doesn't like my stories but..." and then he would proceed to tell about the time he singlehandedly refloated the Titanic with a large balloon filled with hot air.
( Sorry this last bit is my exagerration, not his) 

Having challenged the rubbish, I felt a lot better and I would be able now to engage in a discussion of his ideas, which may or may not be valid.

He was much more informative afterwards with the questions and answers. 

I would like to sit him and Bacon and Honohan and Alan Ahern and Karl Whelan in a room. Tell them not to debate. Tell them to come with an open mind. Tease out the issues and agree to change their views in the light of the arguments. And produce an agreed position paper setting out the pros and cons of each option. If the discussion could be depersonalised, it would be much more informative.


----------



## Brendan Burgess (11 Nov 2009)

David will be touring around Ireland over the next month giving talks followed by a Q&A session for his new book, Follow The Money. All are welcome.
*Dublin, 17th November*
Waterstone’s, Dawson Street, Dublin (google map)
Time: 6.30pm
*Limerick, 19th November*
[broken link removed], 120 O’Connell St, Limerick
Time: 8pm
*Cork, 24th November *
Easons, 113/115 Patrick St, Cork (google map)
Time: 6.30pm
*Navan, 1st December*
[broken link removed], Metges Lane, Kennedy Road, Navan
Time: 7pm
*Cavan, 1oth December*
Crannog Bookshop, Unit 1, New Court Shopping Centre, Church St, Cavan
Time: 8pm


----------



## Duke of Marmalade (11 Nov 2009)

_Boss_, you did well. McWilliams's mega ego will mean I will never, ever attend one of his showpieces. 

Willie O'Moustache had it dead right - the relationship between DMcW and DMcW will be one of the lasting love affairs of all time. 

The garlic episode and how Miriam tried to seduce him just reveal this guy as a self serving, "buy my book" egotist. 

But, thankfully, he has completely destroyed any credibility as an economist by this let's leave the euro thing.


----------



## Sunny (12 Nov 2009)

Brendan said:


> I would like to sit him and Bacon and Honohan and Alan Ahern and Karl Whelan in a room. Tell them not to debate. Tell them to come with an open mind. Tease out the issues and agree to change their views in the light of the arguments. And produce an agreed position paper setting out the pros and cons of each option. If the discussion could be depersonalised, it would be much more informative.


 
Thats a good idea Brendan. It's all very well for these economists who each consider themselves to be experts enjoying the limelight at the moment with their various theories on how to get out of this mess. The Government doesn't have the option of testing them all out to see who is right. Let all these so called experts fight amoung themselves and come to an agreed position if their ego's allow it.


----------



## canicemcavoy (12 Nov 2009)

How about a Brendan vs. McWilliams showdown? Maybe it could be a Leviathan special....


----------



## Brendan Burgess (12 Nov 2009)

Hi Canice 

The problem with this is that I have not got the theoretical economic training and I don't have the knowledge of economic history to evaluate his arguments. 

I might be able to chair a discussion of the various economists and summarise the pros and cons of the various proposals. 

The room on Tuesday seemed fairly persuaded by his arguments, but I pointed out that we did not have the counter view. 

No one knows the right answers. Most people think that they do. I would be worried that a dominant and persuasive speaker could influence the minister. I would hope that his economic advisors are not selling solutions. Instead, they should be showing the pros and cons and risks of the all options - including devaluation and declaring bankruptcy. 

Brendan


----------



## onq (12 Nov 2009)

Brendan said:


> I went and I have raised his big idea for rational discussion in this thread.
> 
> <snip of funniest post by Brendan - ever- suggesting McWilliams may have a rival on the bookstands sometime soon>



<wipes tears from eyes>

Ah me, Brendan - I needed that on this wet and miserable morning.
I swear to God, I re-read my original post after I made it and thought 
"Geez, Brendan or some other Mod/Admin will eat me for criticising the Golden Wonder".
So it was that I logged in this morning and wrote other responses before reading this thread, in some trepidation.

The tone and content of your reply took me totally be surprise [you are normally so reserved].
I spent a good five minutes reading and re-reading it and Laughing out loud, both at McWilliam's reported anecdotes and your reaction to them.
Anway I just wanted to say well done that man and I am delighted [for once] that we share views in common on this issue.
<still chuckling>

In relation to McWilliams, I am wary.
There's no question that he is bright and can be witty.
However a smug, arrogant, witty, bright economist who spends his time telling funny anecdotes as opposed to dealing with the problems of the day is of limited use to anyone.

At the risk of engaging in a spot of begrudgery I think that his Miriam comment was akin to the Tabloid practice of getting attention by being a bad boy.
Although I missed The Panel the other night, goign out of his way to get such attention and then mis-handling the limelight shows David still has a lot to learn about his place and role in Irish Society.
I mean, come on, a permanet compere spot on The Panel for a guy who claims credibility dealing with the National Economy?

The governments spend is projected to drop next year and again in 2011 before returning to an even keel again in 2013 and 2014.
Investing billions in the banks and cutting back on investment in the economy seems to be leading us into a deflationary spiral.
Maybe this is a good thing in terms of reducing the overall cost of goods and services in Ireland.

However I watched a piece last night on how smaller scale, well-run hotels were naturally going under while large scale 5 star jobs were being artificially supported by the Banks.
This seemed to be a variation of the "too big to be let fail" rule applied to Banks themselves and it shows we're not getting things right.
Goods and services will not reduce their prices or costs by puff-piece marketing announcements about the Irish Tourism Industry needing to do more to win the British Tourist back.

I realise that my somewhat simplistic view expressed originally to let the banks fail had wider implications for the great and the good of Irish society that I at first understood - i.e. the Bondholders.
However Lloyds Names all took a huge hit after 9-11 and Ireland Inc didn't implode.

I still feel that merely lorrying billions into a Banking system is not the right way to go.
Going into debt for no return in the short to medium term will bankrupt us, particularly since we're not even seeing significant pain in the Banking Industry - we need to do something else to sustaing Ireland Inc in the short to medium term.

The problem seems to be that all lending constitutes taking a risk and the existing Banks are refusing to take risks by lending to previously viable Irish businesses.
We need therefore a new source of capital for businesses in Ireland.
We also need to seriously reconsider our position on cut-backs where capital investmant may be judiciously made.
After WW1 Germany used state investment to fund capital infrastructure projects to keep the building industry going with the multiplier effect working well for the German economy.
In the present day, we also need to consider Investment in Education, even if we might ring-fence this some way, perhaps with a clause suggesting that the first few years must be worked in Ireland, to avoid seeing our educational products being seduced over to America and end up with no local payback on their investment.

An Either/Or scenario is a means to a failure in itself - the banks may fail anyway due to their exposure to billions of Euro in other markets unrelated to contruction - the Derivatives Market.
We need a Both/And solution.


NAMA
A New Commercial Lending Bank
State Investment in Infrastructure.
State Investment in Education with a Payback Clause.
Because merely dealing with the debt is never enough.

We need to improve 


 our competitiveness
 our resourcefulness
 our inventiveness [cannot stress this one enough]
 our ability to invest in existing and new businesses
 
Simply doling out Billions to the banks cannot do these things.

At a minimum, we need a new Bank to service Ireland Inc.

Any takers?

FWIW

ONQ.


----------



## canicemcavoy (12 Nov 2009)

Brendan said:


> The problem with this is that I have not got the theoretical economic training and I don't have the knowledge of economic history to evaluate his arguments.


 
I was more interested in a debate around the entire notion that, in the old phrase, "no one could have seen it coming" since anyone skeptical of the property bubble, such as McWilliams, Kelly, etc, were all using hysterical arguments.


----------



## Pope John 11 (12 Nov 2009)

Brendan said:


> Hi Canice
> 
> The problem with this is that I have not got the theoretical economic training and I don't have the knowledge of economic history to evaluate his arguments........
> 
> Brendan


[broken link removed]

FYI only


----------



## Caveat (12 Nov 2009)

canicemcavoy said:


> ...were all using hysterical arguments.


 
Maybe they were - but do you mean historical?

I too would like to hear more than just DMcW on this - there must be plenty of feasible counter arguments.


----------



## canicemcavoy (12 Nov 2009)

Caveat said:


> Maybe they were - but do you mean historical?


 
No, I mean hysterical, in the sense of sensationalist. Brendan has previously commented that he didn't listen to arguments from the likes of McWilliams and Kelly because of the language they used:

http://www.askaboutmoney.com/showpost.php?p=942902&postcount=21

I'd be interested in a debate between him and them about this point.


----------



## Brendan Burgess (12 Nov 2009)

Canice

That is why I had to force myself to go along on Tuesday night. 

I had to listen to lots of rubbish to hear the key argument.

I wanted to hear the argument, if not the man. 

That is why I am slagging him off in this thread but trying to put his case forward in the other thread. 

He did say that there are three stages in the development of ideas in Ireland
1) Ridicule - we are now all ridiculing his idea. 
2) Attacking the proposer - we are all doing this as well.
3) The idea becomes conventional wisdom - this is not looking likely, today on a wet Thursday 12th November. 

Maybe we will strugge through another 5 years of depression and then devalue. McWilliams can then point back to this thread and say I told you so. 

I have overcome my distaste of listening to McWilliams. 
Let me know of Morgan Kelly's next public outing and I will see if I can put my prejudices behind me and try to listen to the argument. 

Brendan


----------



## onq (12 Nov 2009)

Does anyone here know any multi-millionaire economists?

Builders, I know more than a few.

Economists - none.

So who said these people know anything about making money or economies?



ONQ.


----------



## Padraigb (12 Nov 2009)

onq said:


> Does anyone here know any multi-millionaire economists?
> 
> Builders, I know more than a few.
> 
> ...



Perhaps the average economist has discovered that there is more to life than making money. McWilliams is probably making big bucks now, but has pretty well abandoned economics.

Certainly I know that the respect I have for people is not linked to how much money they have.


----------



## canicemcavoy (12 Nov 2009)

Brendan said:


> 1) Ridicule - we are now all ridiculing his idea.
> 2) Attacking the proposer - we are all doing this as well.
> 3) The idea becomes conventional wisdom - this is not looking likely, today on a wet Thursday 12th November.


 
To be fair to him, he's quite right when it comes to the property bubble. The same people who said there would never be a crash now say a "correction" had to happen.

I guess I'm less interested in who is right and who is wrong, as to why some people listened to the likes of McWilliams, Kelly, etc, and some didn't. I'm no economist, but work in computers; when I looked at graphs showing that in the Western world, house prices - and most particularly in Ireland - soared upwards away from their real price only in the last 10-15 years - I couldn't understand how someone could completely ignore that data merely because the people writing about the data were choosing emotional words.

Is it because in the field of economics and finance, it doesn't do to be a maverick, whereas in, say, computing, it's often seen a positive? (You don't get many banking firms where the head gurus walk around the office, barefoot, have 20 piercings, or come in at 5pm and leave at 3am, just to recall 3 characters I've known.)

(It's hard to imagine, for example, a character like Steve Jobs - who after doing a calligraphy course in college went off to obtain enlightenment in India in parallel with heroic doses of LSD - running a bank or large financial firm. Even the seemingly staid Bill Gates was arrested for driving charges and expelled from school for hacking.)

Musings.


----------



## onq (12 Nov 2009)

Canice,

Property is best viewed through graphs spanning increments of 20 years or so.

Ireland's market in particular was artificially depressed for many years by poor economic performance meaning children stayed with their parents for longer and the twenty-something home buyer market didn't really develop.

Another factor was emigration - the entrepreneur class and the professional class new generations often left the country, depriving us of a renewal in the thirty something millionaire class of houses.

At least part of the upsurge in property prices in Ireland was entirely justified, but once the ball got rolling, there should arguably have been development based on proper land zoning and development of indigenous employment opportunities to creat demand for housing, as opposed to designated tax incentive-led development.

This distorted the market and created an entirely new demand - marginal sites being seen as viable investments purely because of the tax breaks - succesful developers willing to invest in anything to put their roll-over porfits into the next development rather than pay the full tax whack on them.

This in turn led to planning improprieties on a grand and so far unaccountable scale as maverick rezonings occurred in unsustainable locations based purely on lobbying the votes of councillors and no real resistance to it imposed by the Minister in the interests of compliance with his own plan, the National Spatial Strategy.

I say "improprieties" and not "corruption" because I have no doubt that if you trawl their accounts I'm sure you'll find no bungs to the Councillors, just a desire that their friends the local landowners got a slice of the development pie, that looked like it was running away with the bowl in 2006.

It wasn't just the Banks that operated without adequate oversight in the last decade.

FWIW

ONQ.


----------



## canicemcavoy (12 Nov 2009)

onq said:


> Canice,
> 
> Property is best viewed through graphs spanning increments of 20 years or so.


 
Yes, and to be clear, I'm talking about graphs spanning at least 60 years.



> Ireland's market in particular was artificially depressed for many years by poor economic performance meaning children stayed with their parents for longer and the twenty-something home buyer market didn't really develop.


 
... and to be doubly clear, I'm including graphs that showed UK, US and other countries as well as Ireland. The graphs for those other countries also showed the same anomaly, just not to the extreme that Ireland did.


----------



## Brendan Burgess (27 Feb 2010)

_Here is a piece I published in December 2003 on askaboutmoney.com and  davidmcwilliams.ie. _ 

*The McWilliams Anomaly    * 

_Well informed intelligent people tend not to apply their training and  intelligence when discussing subjects outside their field of core  competence thus reaching bizarre conclusions. _

It is named after the respected economist, David McWilliams who wrote an  article in the Sunday Business Post (early to mid December 2003)about  traffic lights as follows:

     Quote:
                                                 Last Thursday at 5.30am, red lights held me up at 27 out of 31  traffic lights. …no one had thought to synchronise the system…there is  no sensory device to keep the traffic flowing…This would be a bit too  logical for Ireland….nobody is interested in traffic management…even in  Ungobungoland, the idea of “joined up” government exists…But not  here…joined up thinking was not taught with joined up writing in babies,  so it does not happen                                 
If he applied his training as a research economist to the problem  of traffic lights in Dublin, he would have approached the issue in a far  more rational manner. He would not have relied on one sample – he would  have collected data on a variety of routes and at a variety of times.  Even with only one observation, he should have realised that a 90% red  rate was strongly indicative of some underlying pattern. If the lights  were not synchronised, around half of them should have been green. This  should have prompted him to call the traffic light engineers to find out  what the pattern was. The most likely explanation would be that the  lights were synchronised for a particular speed or for a particular set  of traffic conditions. 

So why do experts in one discipline fail to cross transfer their  expertise or methodology to everyday situations outside the area of   their core competence? We are not “the rational man” that the economists  would have us believe. We all tend towards irrationality. Over the past  20 years, Behavioural Science has made great progress in identifying  the many biases in our thinking and decision making. Here are a just a  few of the biases which the McWilliams article illustrates:

*The Availability Bias.*
 The tendency for people to make frequency estimates based on the ease  with which they come to mind. We notice and remember red traffic lights  more than green traffic lights, so we dramatically overestimate their  frequency. Which do you think are more common? Words beginning with the  letter “L” or words where the third letter is “L”?

*The Mental Accounting Bias.*
 Even when counting honestly, we tend to make mistakes which help to  support our biases. So unless we are actually writing down the number of  traffic lights, we may miscount them. Investors count their successful  investments and often exclude some losses when calculating their overall  return. 

*The Confirmation Bias. *
The tendency to notice/remember information which is consistent with  one’s prejudices. We believe that most traffic lights are red. We see a  red light and this confirms it. We see a green light and we ignore it as  an anomaly. Did you know that most black people in Ireland drive white  cars? Check it out for yourself. 

*The Attribution Bias*.
 The tendency to attribute negative outcomes to external factors rather  than to your own behaviour. “These lights are red because nobody is  interested in traffic management” is more acceptable psychologically  than “These lights are red because I have been exceeding the speed  limit”. The corollary is that we tend to attribute positive outcomes to  our own behaviour. “I outperformed the market because I am a clever  investor, not because I was lucky.”

*The Pessimism Bias*. 
The tendency to believe that others are treated more favourably than  yourself e.g. the lights on the other side are always greener. 

*The Overconfidence Bias*. 
The tendency to place undue confidence on your own abilities. 82% of  respondents in one survey rated their driving skills in the top 30%.   Most people feel that they would do a much better job than the traffic  engineers in designing traffic light systems or speed limits. 

*The Mental Rigidity Bias* also known as _einstellung_ .
 The reluctance to change long-held biases despite overwhelming evidence  to the contrary combined with a tendency to avoid data which might  change one’s biases.  No amount of information or statistics will ever  persuade David McWilliams that the traffic lights are well synchronised.   Every time he is stopped at a red traffic light, particularly when he  is in a hurry, it will confirm his bias. This is deep rooted and  psychological and unshiftable. And it is a costly bias – if he took time  to understand the traffic lights system, he could adapt his driving  behaviour accordingly and increase the frequency of green lights from  10% to 90% and save himself a lot of frustration.


----------



## Brendan Burgess (27 Feb 2010)

This post kicked off a fairly long thread, virtually all of which  supported McWilliams. Unfortunately, the threads have disappeared. 

I publicly and privately challenged David McWilliams to a bet. I would  meet him at his house at 5.30am on a morning of his choice and drive to  the Grand Canal. We would count the traffic lights together. If 50% or  more were red, I would donate €1000 to a charity of his choice. If fewer  than 50% were red, he would publish a piece with the headline "apology  to Dublin Corporation". The only condition was that we had to drive just  below the speed limit.  He accepted the challenge, but we haven't  arranged to carry it out yet. 

The responses to the thread were disappointing. People pointed out that  in their journey from X to Y, 70% of the traffic lights were red. But  these people were crossing traffic, and of course, the lights should be  red to give priority to the cars on the main road. 

Others complained about the lights at specific locations. I told them  that some lights were bound to be faulty or badly programmed, and that  they should inform the Corporation. It took Dublin Corporation 3 months  to fix the lights at the junction of Shelbourne Road and Lansdowne Road  which were causing me problems, but my persistent complaints paid off. 

I made the bet before I did any checking of the facts. On Xmas day at  around 9pm, I drove from Glasthule to the East Link, which is roughly  the same journey as McWilliams takes to work and the timing is probably  similar to 5.30 am. There were 41 lights - 3 were red.


----------



## pjmn (27 Feb 2010)

All very interesting - but what has it do with 'NAMA, nationalisation & the banking crises'?  Or am I missing something?


----------



## canicemcavoy (27 Feb 2010)

I think Brendan's still annoyed that McWilliams was right about the property bubble.


----------



## seantheman (27 Feb 2010)

Brendan said:


> Hi Canice
> 
> 
> 
> ...


 
Over 150 people present and no counter view? This sounds more like a group of cheerleaders than a Skeptics Society


----------

