Brian Lenihan's response on Thursday to David McWilliams's powerful condemnation of what Lenihan is doing was petulant and puerile. His first point was a truism: he said there was "broad consensus" that we had to "fix our damaged banking system". Do we need to be told? His second point was even worse: to describe the Government's actions as "bold and radical".

The immediate response, as always to such declarations of government "bravery", is simple: are they that bold and radical, or are these actions, as McWilliams says, a betrayal of the people in favour of the banks? Lenihan's third point was to invite "informed and reasoned contributions to the debate", saying that McWilliam failed on both counts.

McWilliams has been the best-informed commentator. He reasons well and is prepared to admit mistaken analysis of the guarantee to the banks. He did not need to, since the original terms of the guarantee were changed by the introduction of the National Asset Management Agency (NAMA).
Brian Lenihan then arrived at the nub of the issue between our commentator and the Minister for Finance: the double indemnity that the State, at taxpayers' expense, is giving to the banks. McWilliams argued it should be either NAMA or the State guarantee; not both.

Minister Lenihan accuses McWilliams of "confusion". There is nothing confused in Wednesday's article. I concur, wholeheartedly, in a view shared with many others, that an unwholesome cabal of developers, Fianna Fail and the banks is still running the show. Also, the Government has fallen down on the key issue of confidence: a fair and even-handed treatment of this shoddy banking mess, now and for the future. NAMA, Brian Lenihan claims, as point number four, will force banks "to face up to the reality of their bad loans and to write down the value of these loans up-front". This meaningless verbal garbage is undermined by his fellow Cabinet minister, Eamon Ryan, who yesterday speculated on possible further, but not determined shareholdings in the banks by the State without being able to say how NAMA would operate.

Any fool knows that NAMA can only operate through the banks and that the skills are in the banks. They are not in the National Treasury Management Agency (NTMA), the Central Bank or the Department of Finance. Moreover, the NTMA is in the process of losing experienced senior staff. None of this is available to the as yet theoretical employee-structure of the proposed organisation.
Consistently, there has been a lack of transparency over this body. As point five, the minister says "NAMA forces banks to get their house in order". I share widespread doubts about the minister's optimism that a new spirit of regulatory control is going to be born in our public service and political leadership.

We don't do regulation. We can't regulate the Church, banks, ethics, corruption, criminal gang warfare, road traffic, appointments for politicians and Fianna Fail party hacks, and driver testing. What makes us think NAMA will force anything to happen? Do we believe it will be discomforting to the banking system, when that system has been left largely untouched? Meanwhile, Lenihan fumbles for a solution and comes up with two, in order to be sure, to be sure.

McWilliams comes down firmly on the side of NAMA, which is an act of trust I hesitate to share. The trouble with NAMA is that it is a half-way stage between nationalisation and relying on the detached guarantee proposal.

How it will control toxic bank loans is yet to be revealed. It would have been better, in the sense of more reassuring to taxpayers, if their elected representatives in the Dail and Seanad had been more fully involved in the teasing out of its structure and its powers.

The "mock-democratic" procedure is to leave this until the necessary legislation is drafted and comes before the Oireachtas when, inevitably, it will be guillotined. We have to take entirely on trust Brian Lenihan's assurance that it will clean up the banks in "a decisive manner". Nothing this Government has done since Cowen took over has been decisive.

Points six and seven are expressions of mockery at David McWilliams's supposed suggestion that the State should break its promises. It is breaking its promises even as it makes them. As Paul Krugman said this week in the 'New York Times', "Ireland jumped with both feet into the brave new world of unsupervised global markets". What is to stop us now jumping into the global world of broken promises? We are past masters of it.

Lenihan's eighth point is to stress the regulatory and supervisory capacities of NAMA and the promised reforms. Brian Cowen has been promising reforms since he became leader of Fianna Fail. None has emerged.

His ninth point is about the face value of loans, acquired at a discount but maintained at full value for developers. There is an inbuilt discount for the beneficiaries, the banks, and the developers whose wish-fulfilment, when the time comes, will be backed by the taxpayers.

Brian Lenihan castigates David McWilliams for "living up to his reputation for swimming against the tide". He does it with authority and analysis. He is a forensic commentator and admired for that quality.
I put NAMA as the least desirable option of all. The guarantee is preferable, so is temporary nationalisation. They operate at arms length. We have already nationalised a bank and this could be privatised when cleansed. Why not spread that method? And if not that, let us rule on the principle of: "He who pays the piper calls the tune". Instead, we are proposing another government agency.
We have learnt painfully we are incapable of the effective management or control of 800 other government agencies!