The excerpt from the Irish Times is below:
Wednesday’s Today with Pat Kenny (RTÉ Radio 1, weekdays) provided a more less heartening illustration of contemporary mores. The economist Jim Power and the mortgage broker Karl Deeter were in the studio to discuss AIB’s tentative debt-forgiveness proposals for distressed mortgage holders.
Power was sceptical about banks forgiving the mortgage debt of those in arrears, as the taxpayer would ultimately have to pay, and cash-strapped businesses would lose out on funds. He was worried about the issue of moral hazard: why the debts of some should be written off while others, perhaps more prudent, continued to pay.
“Jim, you’re doing a fine job of telling us what’s wrong with it, but not giving us a solution,” said Deeter. Power, who pointedly remarked that mortgage brokers deserved blame for the downturn as well as banks, proposed setting aside some debt for five years, which would incentivise people to “make their situation better”, rather overlooking the possibility that jobs may still prove elusive.
It was reminiscent of Norman Tebbit’s advice that the jobless get “on your bike”. Power, who in 2007 was defending the bank system, seemed less bothered by the moral hazard of the bank bailout than by a bailout of homeowners. But, as Kenny said, “We are already paying for other people’s mistakes.” Maybe so, yet old-regime figures such as Power continue to frame public debate on our woes, lecturing on the prescriptive measures needed. A census, at least, lets people speak for themselves.