In yesterday’s Irish Times (June 30th) Harry McGee has a report on Prof. Brian Lucey’s December 2005 prediction of ongoing growth in the housing market and the potential for subprime lending by Irish mortgage lenders.
In an analysis prepared for mortgage company Homeloan Management Limited in December 2005, Prof Lucey dismissed the notion of an unsustainable property bubble and forecast the Irish housing market would continue to grow at a “modest but still significant pace”. He also identified more scope for increased mortgage lending by financial institutions by means of subprime mortgages, 100 per cent mortgages and equity-release loans.
TCD professor admits being wrong about housing bubble - The Irish Times - Tue, Jun 30, 2009
Could he have been more wrong?
McGee’s article contains some memorable quotes from Lucey – who admits he got it wrong (he could hardly deny it!):
“In retrospect I was wrong. Hindsight is 20-20. That is life. Does that invalidate the analyses I am doing now? Not necessarily. We will know for sure [about Nama] in 10-15 years.”
“This is not physics. It’s a social science. People are looking for more certainty that can be given.”
“I think we need to be cautious and humble.”
Lucey has become something of a media whore, riding the banking crisis for all it’s worth. He’s on radio, tv and in the press on an almost daily basis – indeed he’s featured on multiple radio & tv stations on the same day (it must be a tidy little earner to boost that modest academic salary from TCD).
Lucey was also one of the 20 academics who penned an article for the Irish Times, which is often cited as proof that nationalisation of the banks must be the right solution – the clever academics have told us so!
Reading/hearing/seeing the regular output of Prof. Lucey, you wouldn't be aware of any of the above "health warnings", he leaves no room for doubt as to his certainty that he is right and the Govt is wrong.
He was, presumably, one of the main targets of Alan Ahearne’s barbed quip about there being two types of economist – “those who know they don’t know and those who don’t know they don’t know”.
Let’s hope that Lucey remembers his own “health warnings” the next time he addresses the nation on the banking crisis or the economy.
Effin’ academics. Time for a cull - An Bord Snip Nua please note.