"By the end of this year households will have up to €15bn extra in their bank accounts"

[joe sod]

He is a good self publicist and has milked very successfully how after about 8 years his prediction of a house price slump eventually materialised.

Yea thats his career in a nutshell, but he was a lone voice back in those days and very anti establishment. I think he borrowed his style of writing from other guys in US and UK, it wasn't unique but was unique to Ireland before people started reading international financial stuff like they do now. Suddenly when the housing crash happened he was box office and then his career as a "celebrity economist" took off.
He was shameless with regard to Brian Lenihan coming to his house for advice on how to handle the banking crisis, he couldn't keep his trap shut.

 

[Brendan Burgess]

So John Fitzgerald's piece is directly at odds with David McWilliams' piece.

Why did John Fitzgerald not call out the helicopter money nonsense? Even if he did not want to criticise his Irish Times colleague, he could still have said that it is wrong thing to do.

He has another piece today. It's primarily about how he sees the pandemic evolving. He speaks with such confidence about topics about which he has nothing more than a layman's understanding.

David McWilliams: When will the money run out in the Covid-19 pandemic?

The money will not run out unless the Central Bank decides not to provide it

www.irishtimes.com

Brendan

 

[Brendan Burgess]

David McWilliams: How to avoid an economic depression

The new government must make saving small businesses its top priority

www.irishtimes.com

If the banks are worried about depositors not getting paid interest, the Irish Central Bank could make available one rate for depositors and one for debtors. The rate could be 1 per cent for depositors and 0 per cent for borrowers – a concept called dual interest rates.

Carry the cost
Then, you may ask, won’t the Central Bank have to carry the cost? Well, yes it would, but central banks can’t go bust. Have you ever seen a central bank go bust?

What depositors would get the 1%? Which borrowers would get charged 0%?

I would say that the Irish banks would not be shy about borrowing at 0% to put it on deposit at 1%.

Brendan

 

[Duke of Marmalade]

So John Fitzgerald's piece is directly at odds with David McWilliams' piece.

Why did John Fitzgerald not call out the helicopter money nonsense? Even if he did not want to criticise his Irish Times colleague, he could still have said that it is wrong thing to do.

He has another piece today. It's primarily about how he sees the pandemic evolving. He speaks with such confidence about topics about which he has nothing more than a layman's understanding.

David McWilliams: When will the money run out in the Covid-19 pandemic?

The money will not run out unless the Central Bank decides not to provide it

www.irishtimes.com

Brendan

I kept waiting for the signature Outside the Box suggestion from McWilliams like we should all take a year off or sumfin'. But it was really quite a damp squib just riffing on about vaccines and immunity, as you say, subjects upon which he knows as little as I do. I couldn't find the other article you link in a later post but which is subscriber only.

 

[Duke of Marmalade]

David McWilliams: How to avoid an economic depression

The new government must make saving small businesses its top priority

www.irishtimes.com

If the banks are worried about depositors not getting paid interest, the Irish Central Bank could make available one rate for depositors and one for debtors. The rate could be 1 per cent for depositors and 0 per cent for borrowers – a concept called dual interest rates.

Carry the cost
Then, you may ask, won’t the Central Bank have to carry the cost? Well, yes it would, but central banks can’t go bust. Have you ever seen a central bank go bust?

What depositors would get the 1%? Which borrowers would get charged 0%?

I would say that the Irish banks would not be shy about borrowing at 0% to put it on deposit at 1%.

Brendan

Managed to get my hands on that article. The first three quarters made perfect sense though not new stuff. We need to do as much as possible to address SME's cash flow problems. He then describes the UK scheme which makes perfect sense. The Government there are underwriting practically interest free loans of up to £50k.
So far so good and so common sense, but when will our hero don his cape? Here it comes, he reminds us of when he worked in the Central Bank and he learned all about seigniorage and the magic of central banking. He then proposes a scheme which involves zeroising interest on existing SME loans. I couldn't quite follow where it was a quantum leap ahead of the UK scheme but it does give him the entreé to talk about central banks printing money, which has actually lost its shock factor by now - he will need a new party trick. As an aside, why he feels depositors need 1% p.a. when they get 0% at the minute is a bit of a mystery.
I also noted:

dropping money into accounts is the same as giving a tax cut

Well yes, more or less, so why does he elsewhere go for the more sensationalist depiction? Of course, it's not quite the same - only taxpayers benefit from tax cuts. But from a macro point of view it would be characterised as a fiscal measure rather than a monetary one. But if it is financed by borrowing it amounts to the same thing.

 

[joe sod]

He was on newstalk last week again espousing his theories on borrowing lots more money and that the total debt is irrelevant. Of course his theories are widely popular which explains I think why he is doing this to sell lots more books, get more podcasts and interviews and ultimately drive revenue for David McWilliams. I dont think he cares if he ultimately collapses his reputation as a celebrity economist he will have made lots of money and will still be a media whore.
Luckily the politicians are not buying it Pascal Donohue poured alot of cold water on the idea and Ivan Yates has even challenged him to a debate about it on his show.

 

[Duke of Marmalade]

He has a piece in today's IT about what he calls a Pandession. He has dropped his helicopter money idea and he stops short of suggesting an outside the box stroke of genius. But he does remind us of how Sweden escaped the Great Depression by breaking with conventional gold standard thinking and devaluing the krona by 3%. He calls for Ireland to deploy similar unconventional thinking but stops short of saying we should leave the euro, though why else bring up the Swedish devaluation?

Colm McCarthy in today's Sindo gently puts down McWilliams' idea of debt restructuring. Interestingly he describes him as an Irish Time columnist, a sure sign they think the IT have been take for a fool.