The more I read of David McWilliams, the more I agree with his position that we should let Anglo Irish Bank go to the wall.

His article in the Sunday Business Post on June 7th titled “Kill Anglo to Save Ireland” (http://www.davidmcwilliams.ie/2010/06/07/kill-anglo-to-save-ireland) says that Anglo has no inherent value left and only vested interests within the bank are keeping it alive at the expense of the Irish taxpayer.  The Irish Government are failing to protect the Irish people from what will be a catastrophic outcome if left to run it’s current course in pumping €20,000,000,000 into it.

He points out that the people that should be taking the hit on Anglo are the bondholders and shareholders. They were the ones that took the risks in investing in it and providing the loans to it for what were wildly speculative property-related ventures. They are the ones who now need to take the hit. They are now trying to pass their burden onto the Irish taxpayer. And the Irish Government are falling for this, and trying to paint a picture that Ireland would be doomed if Anglo should be allowed fail.

The real truth is that Ireland is doomed if Anglo is NOT allowed to fail.  David McWilliams points out that over 140 banks in the US have been allowed fail since the start of their banking crisis and this didn’t have any catastrophic effects on the US econemy. He says it’s time the Irish Government stood up for the Irish taxpayer, not the Anglo bondholders, many of whom are German and other European banks who should have known the risks they were taking in lending Anglo the vast sums that they did.

But maybe that’s the crux of the problem – maybe the Irish Government are afraid to rock the boat with their German and other EU partners in case this backfires and they stop lending Ireland any more money for our day-to-day fiscal requirements.

Which is the lesser evil ? We continue to support Anglo and throw €20,000,000,000 down the drain over the next ten years, but at least we can continue to borrow from our EU partners in the short term for our day-to-day budgetary shortfall (also approx €20,000,000,000 per annum). Or Brian Lenihan takes yet another brave decision to tell the Anglo bondholders where to go, and hope that the international markets view of this approach will be positive and ultimately allow us get access to funds more easily (if the markets can see us getting this mad Anglo monkey off our backs).

I think I’d favour the latter approach. I might end up poor but at least I could be satisfied that we weren’t taken for mugs by Anglo and their cronies. I’ll probably end up poor anyway once the Germans decide to ditch the Euro and we end up back with good old Irish Punts again.