Vanity Fair has a fascinating story about Iceland, a nation whose economy is far worse off than our own. Its no wonder: until last month, the nation’s central banker was a poet, the finance minister a veterinarian, the business minister a philosopher.
Iceland: Beautiful and broke.
Photo by stuckincustoms.
How did this happen? Back in the 1970s, the nation privatized its ocean fisheries by giving percentage shares of fishing rights to fishermen. This gave the fishermen an incentive to promote, rather than overfish, the fisheries. Plus, they could sell their shares or borrow against them. “In a single stroke the fish became a source of real, sustainable wealth rather than shaky sustenance,” says writer Michael Lewis.
check out to find out more usa discount cialis You Can Rely on ED Drugs There are a large number of substances which many of us use regularly that can cause depression in some people. Since, women viagra online blood supply is the main requirement for making firm erections is that the blood should pass on to the penis in an ample or sufficient quantity. In general terms too, two products in the same category do not offer same results and if you are successful in the test, then you sildenafil cost are ready to drive on the road. The drug cipla generic viagra is carried in yellow strip and bags. The nation became so rich that, among other things it paid young people to study at top universities in other countries. When they came back, they found the only jobs were fishing and smelting aluminum. That didn’t sound very interesting, so they created new jobs: music, art, poetry, philosophy.
And investment banking. Fishing is traditionally a high-risk industry, and Icelanders were known for taking the highest risks of all. So when some of them discovered the high-risk world of investment banking, they felt right at home. In fact, they weren’t very good at it, but as long as asset prices kept increasing, hardly anyone (except a few investment bankers from other countries) noticed.
In early 2008, Robert Aliber, who co-authored the latest edition of the late Charles Kindleberger’s Manias, Panics, and Crashes, visited Iceland and spoke to the University of Iceland’s economics department. “I give you nine months,” he said. “Your banks are dead. Your bankers are either stupid or greedy. And I’ll bet they are on planes trying to sell their assets right now.”
He was right about the first three points, but not the last. Instead, the bankers (who probably fall into the “stupid” category) remained in denial and held on to their assets right up to the October 8 crash. In the end, they owed debts equal to 850 percent of Iceland’s gross domestic product. (American debt is 350 percent of our GDP.)
Privatizing the fisheries did not cause Iceland’s economic collapse. But it did make the nation rich enough to become a significant player in international banking. Too bad that, contrary to a once-popular belief, fish aren’t a brain food.
No doubt Iceland’s increase in economic freedom from 1980 to the present helped out with their remarkable growth and prosperity (http://www.cato.org/pubs/efw/efw2008/efw2008-3.pdf, page 100).
Iceland provides an especially unsettling example of the dangers of leverage, and of the tax preferences for debt financing (instead of raising equity) that drive such leverage. Once economies are growing again, this will be an important issue for policymakers to deal with.
http://www.theage.com.au/national/go-to-jail-thats-fine-says-toll-rebel-20090305-8q30.html
Go to jail? That’s fine, says toll rebel
Clay Lucas * March 6, 2009
JULIE Jones does not look like a woman staring at a jail sentence. Nor does the 57-year-old Frankston grandmother and nurse look like the type to describe herself as a “political prisoner”.
But, for the past six years, Ms Jones has made what she calls a political decision: she has chosen not to pay to drive on CityLink. Now, unless she pays $1336 in fines by today, she will be jailed for 12 days.
“I will be jailed for refusing to pay a debt to a privately owned corporation, while businesspeople who fleece others out of tens of millions of dollars never face the threat of jail,” Ms Jones said.
When CityLink opened in 2000, Ms Jones avoided the road. But she was enraged that the Kennett government had privatised a section of the Tullamarine Freeway that had always been free for any Victorian who paid their car registration.
Three years after CityLink opened, Ms Jones got lost and ended up on the toll road. From that day, she decided “bugger it”, and used the road. Each time she did, a fine would arrive, but she vowed not to pay them.
Ms Jones believes many others hate paying tolls on Melbourne’s roads, and will have sympathy for her position.
CityLink operator Transurban declined to comment.
A warrant for Ms Jones’ arrest is expected to be issued tomorrow.
At risk of a hi-jack.
I don’t like only being able to withdraw the money actually in my account at Citibank and since the management fleeced the taxpayers, I think I’ll go in with a gun and get more. I certainly should go to jail if Julie Jones can do similar to CitiLink.
Baah
Highwayman,
What’s your point about that irrelevant & unrelated article?
Are you proposing anarchy?
Do you not believe that a person should pay for things that they use?
Do you think that because some people break the law, then all can?
Do you think that there are not banking & other laws?
And that people are prosecuted for breaking laws?
Do you think that people should not renege on their obligations to pay debt, such as mortgages, which was the first cause starting this recession?
You reap what you sow.
http://www.lazytown.com/
This is also an export of Iceland.