In what's being called the first government collapse due to climate change, Iceland's government fell today.
Those who have been watching the ice recede in Iceland and Greenland have probably seen this coming. No word yet on who or what will replace the current administration.
Seems pretty joyful, with horns honking and singing in the streets:
Authored by: Maus Anon E on Monday, January 26 2009 @ 10:20 PM GMT+4
Huh? Global warming? Global financial collapse, maybe.
I've been following this and, in short, Iceland has gone from a prosperous nation, to a poor nation in the matter of just a few months. Not that Iceland was ever a "wealthy" nation, but they managed to claw their way to a decent standard of living.
Then, over the last few years, Iceland's banks went international and (making a very long story mercifully short) over-extended themselves by many times the nation's GDP. The government failed to regulate the banks (sound familiar?) and bankers poo-pooed warnings from those who suggested there was danger.
As a result of the current financial crisis, the banks have all gone belly-up, and Iceland has nationalized some (all? I don't know) banks.
But, with a bank debt of many more times than the nation's GDP, the country's tax reserves are not enough to guarantee depositors' funds. There has been steep inflation, and Krona has plummeted in relation to the Euro - bad news in a country that depends on foreign trade for staple goods. (Although the country is also a major seafood exporter, and the currency devaluation will make those exports cheaper in the rest of Europe.)
The savings of so many British OAP's were tied up in Iceland's banks (because the Icelandic banks targeted them through a marketing program) that Gordon Brown moved to seize the British assets of one Icelandic bank under an anti-terrorism law.
There have been huge protests over the last several days and weeks, demanding the government step down.
Authored by: Todd on Tuesday, January 27 2009 @ 02:36 AM GMT+4
Using the cooked "official" #'s, total outstanding/credit debt is now approaching four times GDP. Its currently twice as big of a ratio as it was during the worst of the Great Depression.
But using un-cooked books, and taking into account the hundreds of *trillions* of bucks in the derivatives markets and such, we are almost certainly carrying a debt to GDP load at least as high as Iceland's, possibly quite a bit higher.
There simply is no easy, elegant way out of this. The rest of the world is looking for a way of backing away from the dollar as the reserve currency. They NEED to decouple from it, but they are afraid we will throw a temper tantrum if they do it. So they are searching for ways out that won't have us deciding to "liberate" their nation! <g>
When they do manage to decouple their currency's from ours, with the Euro, or Yen or something becoming the new "petro-dollar". The container boats from China will immediately stop coming, along with the oil tankers, and things will change rather quickly here in America.
Authored by: annikee on Monday, January 26 2009 @ 10:20 PM GMT+4
True, this article doesn't talk about what brought the financial crisis, blaming it all on the IMF. That's not "my article", but a MSM source. As for the history, those who have followed these things since last winter know. I have no investment in teaching or arguing. Bye bye.
The fact is Iceland's government fell today. Who's next?
---
".. failure of an ideal..is harder for the world to forgive and forget than.. the grand swindles of corrupt politicians" LM Alcott
Authored by: CDoubleday on Monday, January 26 2009 @ 11:23 PM GMT+4
Honestly? Ireland's next, though it's sad for me to say so. Unfortunately they've created a near identical situation to Iceland where their outstanding debt dwarfs their GDP and most of their "outstanding growth" of the past few years has been in construction and real estate, which as we all know aren't doing so hot these days. And instead of letting the banks fail and have the investors pay for their mistakes, Ireland's guaranteed all the insolvent banks assets thereby effectively making their own government insolvent. After Ireland? Probably either Spain/UK, after that it's anyone's guess. Iceland certainly is providing a great example of why it's a terrible thing to guarantee a bank's debt when your country doesn't have the money to pay the debt... Now why does that story sound so familiar these days...
Authored by: Maus Anon E on Tuesday, January 27 2009 @ 01:35 AM GMT+4
Yes, I couldn't believe the Irish government guaranteed bank debt. Guaranteeing bank deposits was a good idea, but debt? I can think of several reasons that's not a good idea, but the main one is that they've essentially guaranteed the profits of reckless land speculation.
You may be right that Ireland's next. But, I don't think it's liable for a collapse on the scale of Iceland's, by any means. I do feel guilty saying it, but Ireland's economic crisis is good for me. Bad for relatives, but good for me.
Authored by: paulgardner on Tuesday, January 27 2009 @ 01:02 AM GMT+4
I think collapse in this case means you're still paying taxes (death & taxes - still the only two things in life you can count on, right?) you no longer receive services in return. This is what you want in VT?
Authored by: Maus Anon E on Tuesday, January 27 2009 @ 11:33 PM GMT+4
Like me, you're probably happy being a contributing member of society, but if you'd like to know how you can get more money from the government than you pay in taxes, just let me know and I'll tell you the secret. (It's not really a secret.)
Authored by: Maus Anon E on Wednesday, January 28 2009 @ 12:01 PM GMT+4
No, you have to have an income to file income taxes. But if your income is below a certain level, and you have kids, you can actually get back more than you paid - and under Obama's plan that amount is likely to increase.
So what you could do, if you had a mind to do it, is to ask your boss for a cut in wages so that you'll be under the poverty level.
If you own a house and have a mortgage, you'll have to give it away or sell it and give away all of your money (or spend it on SUVs and flat screen TVs) so that you won't have the expense of a mortgage or the income from savings.
It must have kids, because you get a tax credit that can be more than you paid in. and you can get WIC and other help for them. The secret to making kids profitable is to not feed or clothe them well. Don't waste any money on early education or home educational materials. Let the television do all the baby sitting.
Apply for the federal food stamp program.
Apply for federally-funded state heating assistance.
Apply for section 8 housing.
The combination of your poverty-level income and the federal assistance you get will keep you barely on the edge of survival - there will be some months when you don't have enough money for heating oil, the rent on your hovel, or food.
But you will get more from the government than you pay in taxes. Doesn't appeal to me, but it can be done.
Authored by: pjmelton on Wednesday, January 28 2009 @ 11:11 AM GMT+4
I think they fund mental health and drug recovery programs, corrections, health insurance for the poor, care of the elderly and disabled, state highways and bridges, state parks. They also do game management and enforce environmental, agricultural and industrial regulations. Among other things.
I'm afraid in a lot of cases they don't do a very good job. However, I don't want to reduce the state government to ashes. I wouldn't mind, though, if Douglas resigned and were replaced with an Icelandic lesbian.
---
"Economic laws are not made by nature. They are made by human beings." -- FDR
Authored by: annikee on Wednesday, January 28 2009 @ 02:19 PM GMT+4
I wouldn't mind if Doesless disappeared and an honest low-income person who keeps their boat afloat was appointed. The older I get the more I see that rich people don't know how to budget at all. It's just a catchphrase to them.
---
".. failure of an ideal..is harder for the world to forgive and forget than.. the grand swindles of corrupt politicians" LM Alcott
Authored by: pjmelton on Tuesday, January 27 2009 @ 11:40 AM GMT+4
I don't get why the headlines are screaming about the government collapsing. For goodness' sake; the prime minister resigned. Did Nixon's resignation constitute a "collapse of the government"???
This is a very serious situation, but the headlines are hysterical.
---
"Economic laws are not made by nature. They are made by human beings." -- FDR
Authored by: Maus Anon E on Tuesday, January 27 2009 @ 12:41 PM GMT+4
It may sound hysterical to American ears. In a parliamentary system, the "collapse" of the government doesn't refer to the destruction of the actual system itself, but of the political bonds that staffed the adminstration of the government. It's as if the U.S. President and all the people he appointed were suddenly powerless. It leaves the nation's government adrift and rudderless until new elections can be held. (Or, depending on the situation, new coalitions and a new government could be formed without an election.)
The collapse of the government isn't necessarily a bad thing, and in Iceland's case, people were demanding that the government resign.
Authored by: paulgardner on Wednesday, January 28 2009 @ 12:34 PM GMT+4
Air America radio dude Thom Hartmann spins lots of yarns in the course of his show. For example, the story of how we got flying reindeer in our xmas mythology from drug taking Norwegian shamans. You never quite know which is hogwash and etc.
The Iceland tale Thom's been telling involves a debate held in Reyjavik back in the 70's (I think) between Milton Friedman (or similar supply sider) and a traditionally grounded economist. It was nationally televised and closely watched by virtually everybody in Iceland. Friedman won decisively and the result was a supply side fiasco.
But not right away - for years it looked brilliant.
The nation became one big investment bank with money pouring in from all over (I note in one of the articles linked above that the UK had over 1 billion pounds in assets invested that the Iceland banks were prevented by the UK from withdrawing). The figure $400 bill. sticks in my head as the amount that was invested in total by the world.
As with Bernard Madoff's ponzi scheme none of it was secured by anything real - Iceland being a tiny country. So in the Hartmann universe (Milton Friedmann along with Ronald Reagan and Alan Greenspan being his big bugabears) Iceland (and their investors) became victims of Friedmanomics as he calls it.
Has anybody else read or heard a similar telling of this collapse?
Http://www.guardian.co.uk/commentisfree/2009/jan/21/iceland-globalrecession