An article by Fintan O’Toole in today’s Irish Times got me thinking about how we might solve the NAMA conundrum.
Fintan pointed out what might seem obvious, but which nobody mentions. The developers who overpaid for all this land and property gave the money to somebody. It didn’t just evaporate into thin air.
Somebody got too much for their land or their buildings, they have it in a bank somewhere, and now the Irish taxpayer is picking up the tab.
Well, look. How about this for an idea?
Under the government’s current plan, NAMA will have the authority to tell the banks how much it’s going to pay them for their distressed assets. It will be able to say, No, we won’t give you the €77 billion you lent. We’ll give you €54 billion instead. NAMA will be given the power of valuation.
Leave aside for a moment the fact that NAMA is still paying the banks too much. Look instead at its powers to determine the discount. Look also at the government’s powers to take money from you and me by way of taxation and levies.
Here’s my suggestion.
Since NAMA is going to value and take over all these bad assets, why not go one step further?
Why not give NAMA the power to look into the transaction when the land or buildings were bought, and see if the person who sold them was paid too much?
And if NAMA decides the vendor was paid too much, why not take the excessive profits back from them and put it into the fund that buys the assets from the bank?
This would mean that the people whose greed caused the whole mess would end up paying for it, instead of the little people like you and me. After all, these people’s unreasonable profits are why the loans were overvalued in the first place.
Yes, it’s true that a lot of the money went this way and that: to the percentage merchants like estate agents who grew fat on their inflated fees, and the design teams who were paid on the gross price of the developments, right down to the greedy blocklayers who charged €2 per block to build the goddamn things. But if our system is capable of tracking down a poor man on the dole for accepting a day’s work, it should surely be capable of unravelling who got what out of all the billions.
Tell me. What would be wrong with doing this?
Meanwhile, on more NAMA-related matters, here’s something from one of those very clever fellows who know how to do hard sums.
And here’s McWilliams on protecting the rich.