Rock ‘n’ roll arrived at the Oireachtas banking inquiry yesterday. It came in the form of David Mc Williams: He Who Foretold The Crash.
McWilliams was there to tell the inquiring politicians where it all went wrong. He is known as a pop economist, but the term doesn’t do him justice. This guy is pure rock ‘n’ roll.
Various myths have grown up around Macker, a bit like those that feed the legendary pursuits of Led Zeppelin on their wild tours of the 1970s. Once upon a time, he was mistakenly credited with inventing the phrase “Celtic Tiger”.
Since the crash in 2008, he has transmogrified into The Man Who Saw It All Coming.
To be fair to him, he did predict the bursting of the housing bubble. He first predicted it in 1996, and continued to do so for the following 12 years until it did burst.
There were others — not many, but a few — who did likewise, but what distinguished McWilliams was his excellence in communicating, which saw him provided with a range of media platforms.
As such, he was the most prominent dissident voice during a time of smug consensus, and he has traded expertly on that status since the walls came tumbling down.
It’s just as well he’s an amiable chap who oozes charm, or it might have been easy to take a dislike to him yesterday. He began as he meant to go on:
“It is my opinion that the Irish banking system and the rest of the economy was set up to fail. I saw this earlier than anybody else.” That’s anybody else in the whole wide world, and hope to die.
That theme of being an oracle inside a sage inside the smartest boy in the class was maintained throughout his two-and a-half hours of evidence. He keep telling us that he had told us so.
“I did this in hundreds of thousands of words, dozens of articles twice a week, I made documentaries; on my own TV show on TV3; and constantly warning people at every juncture — not if but when — the housing [bubble would burst].”
He told us that his TV series The Pope’s Children was watched by 36% of the viewing public, and the eponymous book published in 2005 was the best-selling non-fiction tome, not of the year, but the decade.
The fella knows his onions and he’s not behind the door in coming forward with the lowdown.
He also told that he believed the bank guarantee was “the only decision that could have been made at the time which would have stopped a bank run”, but, crucially, he added that the key was that it needed to be temporary.
Some of the politicians tried to catch him out on the guarantee. Conventional wisdom has it these days that the guarantee was a disastrous decision, but, to be fair to Macker, he stuck with the more plausible line that there was no alternative at the time, the real damage having been done in the preceding years. With, of course the above caveat, lest he be mistaken for somebody who could have made a mistake.
He opened up about his contacts with the late Brian Lenihan over a period of weeks during that fateful autumn of ’08.
“He rocked up to my kitchen,” McWilliams said.
They met twice and spoke a dozen times on the phone during those weeks. He felt Lenihan used him as “a sounding board”, a voice on the outside to counter all those on the inside.
When the guarantee was going down, Macker was off in China at some global function for very smart people. John Gormley phoned him from Ireland, to ask what was going on in Ireland. How crazy was that? At least it meant that government ministers were finally realising that Dave did know it all.
Rounding up what was a thoroughly engaging session, chairman Ciaran Lynch put the killer question to the witness: “Did you ever get anything wrong?
At first, Dave thought it was a trick question but then he said that no, he didn’t get anything wrong in relation to the bubble and crash. It is indeed hard to be humble, when you’ve predicted it every which way.
Knowing it all isn’t a crime, particularly if you have the personality to carry it off. And that McWilliams has.
Afterwards he rose to depart, sans encore, trailing a celebratory frisson in his wake. All that was missing was for a voice to cackle over the public announcement system, declaring: “David McWilliams has left the building”.
First Group of bankers forced to attend inquiry revealed
The 13, who must attend meetings in late April, are:
Richie Boucher, chief executive of Bank of Ireland
Michael Buckley, former chief executive of AIB
Richard Burrows, former governor of Bank of Ireland
Laurence Crowley, former Governor of Bank of Ireland
Frank Daly, Nama chairman
Donal Forde, former managing director of AIB
Robert Gallagher, foreign chief executive of corporate markets at Ulster Bank
Dermot Gleeson, former chairman of AIB
Brian Goggin, former chief executive of Bank of Ireland
Cormac McCarthy, former chief executive of Ulster Bank
Brendan McDonagh, chief executive of Nama
Eugene Sheehy, former chief executive of AIB
Michael Torpey, corporate and treasury chief executive at Bank of Ireland
Michael Clifford
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