Greek Style

[prole]

Fannie and Freddie aren't examples of privatized profits and socialized risk? Farm subsidies, tarriffs, subsidies, etc, etc, aren't examples of the political system distorting public finances for private advantage? Who's the one with the selective outrage here again?

 

Don't forget the military!

[JayB]

in other words, you are ignoring my comment about accounting for both public AND private debt because you'd have to admit that neoliberal economies have overall contracted more debt over the last 30 years.

 

 

Seems correct to me. What's your point? That all debt - whether it be car loans or public pension obligations have equal claims on the public purse?

 

Not sure where you're going with that one, but feel free to elaborate.

[Jim]

Fannie and Freddie aren't examples of privatized profits and socialized risk? Farm subsidies, tarriffs, subsidies, etc, etc, aren't examples of the political system distorting public finances for private advantage? Who's the one with the selective outrage here again?

 

Read closer. I mentioned Fannie and Freddie. Farm subsidies, I'm with you. But you were the one that touted the "structural reform", which by ample example tends to be the same. Provide bailouts to the entities that cry the loudest about "let the market figure it out" until the consequenses of their financial prowess turn downward. Then it's time for the government to step in and save their sorry asses at public expense. Then it's business as usual and profiteering until the next, inevitible disaster and the guaranteed public shakedown. Ya gotta give these guys credit. It's quite the racket.

[j_b]

Seems correct to me. What's your point? That all debt - whether it be car loans or public pension obligations have equal claims on the public purse?

 

Not sure where you're going with that one, but feel free to elaborate.

 

surely you jest? The economy cannot tell whether the debt is public or private. Yet you keep pointing out the public debt to justify ending social welfare and completely ignore a much larger private debt that brought the economy to the brink.

 

 

 

[Hugh Conway]

Fannie and Freddie aren't examples of privatized profits and socialized risk? Farm subsidies, tarriffs, subsidies, etc, etc, aren't examples of the political system distorting public finances for private advantage? Who's the one with the selective outrage here again?

 

To summarize: JayB thinks Europe sucks because they actually take responsibility and honestly account for the outlay.

 

Still haven't seen any reason whatsoever why the US is going to come out ahead because this "SERVICE ECONOMY" is just as much bullshit as the old, just easier to outsource (as the Filipino legal assistants will tell you)

[tvashtarkatena]

[Hugh Conway]

Seems correct to me. What's your point? That all debt - whether it be car loans or public pension obligations have equal claims on the public purse?

 

well, society has to pay for both. you get massively butthurt over an admin making $75k a year from Washington State and fellate some feeble fuckwhit making $750k a year on Wall Street who has the same skill set (the ability to negotiate the hiring process and a pulse). both are a drag on the rest of us.....

[tvashtarkatena]

Way kewler than crickets.

[mkporwit]

Way kewler than crickets.

 

[video:youtube]pznG0dzR8JI

[prole]

While bankers bask...

 

Iceland Voters Set to Reject Debt Deal

By SARAH LYALL

March 5, 2010

REYKJAVIK, Iceland — After the dust began to settle last year — after the banks failed, the currency collapsed, the stock market crashed and the government fell — the dazed inhabitants of Iceland woke up to another unpleasant problem: They owed, it seemed, some $5.3 billion to more than 300,000 angry people in the Netherlands and Britain.

 

These were the customers of Icesave, a now notorious online retail branch of the Icelandic bank Landsbanki, which went bankrupt in October 2008 along with 85 percent of Iceland’s banking system. The British and Dutch governments reimbursed their citizens, but then demanded that Iceland repay the money, the equivalent of $65,000 per household here, plus interest.

 

To put it in perspective, it is as if American taxpayers were being forced to pay $5 trillion (plus interest) to reimburse customers of the Japanese branch of a failed private American bank, said Magnus Arni Skulason, the head of InDefence, a group agitating for a better deal.

 

The question of how to pay has convulsed this tiny country of about 319,000 people, severely damaging its international reputation and paralyzing its economic recovery. It has so incensed its residents that on Saturday they are expected to reject overwhelmingly the latest Icesave repayment plan, in the first national referendum ever held here on any subject.

 

The vote raises larger questions about Iceland’s place in the world, said Silja B. Omarsdottir, a political scientist at the University of Iceland. “Are we going to be a country that takes our obligations seriously? Or are we going to say, ‘No, we’re going to do things our way’ and be an international pariah?”

 

In the scheme of world debt, $5.3 billion is small potatoes. But it represents more than 40 percent of Iceland’s gross domestic product. The interest alone would eat up one-fourth of the country’s revenues, said Prime Minister Johanna Sigurdardottir, who called finding a resolution to the Icesave dispute “a matter of life and death for the Icelandic economy.”

 

The referendum was prompted on Jan. 5 by the refusal of Iceland’s president, Olafur Ragnar Grimsson, to sign into law the latest Icesave agreement, arrived at after months of bad-tempered negotiations with Britain and the Netherlands and narrowly passed by a divided and fractious Icelandic Parliament.

 

Mr. Grimsson’s move was unexpected but widely popular in a place that feels bullied and ill treated.

 

The crisis spurred a series of demonstrations from usually phlegmatic Icelanders, who recited poetry and tossed yogurt pots and rocks at government buildings to protest what they deemed the greed, ineptitude and spinelessness of the governing elite. Nearly a quarter of the electorate signed an Internet petition against the Icesave deal.

 

The referendum is being closely watched abroad, where the worry is that people in other financially flailing countries might be emboldened to rise up and refuse to honor financial obligations stemming from the failures of their banks.

 

But absurdities abound. For one thing, Icesave negotiations have moved on since January, so the deal being voted on — which would give Iceland 15 years to repay the money, at 5.5 percent interest — is not the deal currently on the table. For another thing, many Icelanders appear to believe that they are voting not on the terms of the plan, but on whether to pay at all.

 

Not only that, Ms. Sigurdardottir said, further delays are likely to eat up any savings that might come if all the parties finally agree to a better deal. Iceland has promised to pay up to 20,887 euros per customer (more than $28,000 each), in accordance with European deposit-guarantee regulations, but negotiations are now stalled by arguments over interest rates.

 

Birgitta Jonsdottir, a member of Parliament from the fledgling people-power Civic Movement Party, said that a “no” vote would send a strong message to the world.

 

First, she said, “We don’t believe in the socialization of private debt.” Second: “It is time for Britain to treat us like a sovereign nation and not a colony.” And third: “They can’t use the I.M.F. to blackmail us into doing what they want on Icesave.”

 

But it seems they can.

 

The I.M.F. and a coalition of Nordic countries have delayed the second installment of a $4.85 billion bailout package for Iceland pending the outcome of the Icesave dispute. The rating agency Fitch recently downgraded Iceland’s credit rating to below investment grade, and Moody’s and Standard & Poor’s both warned that the political and financial turmoil expected to follow if the deal was rejected might make them follow suit.

 

Britain is also threatening to hold up Iceland’s entry to the European Union.

 

A “no” vote “would effectively be saying that Iceland doesn’t want to be part of the international financial system,” Lord Myners, financial services secretary to Britain’s treasury, warned in January.

 

That some Icelanders seem willing to take the consequences — to risk becoming “the Cuba of the north,” in the words of Mr. Skulason — speaks to an element embedded deep in the national character. The symbol of this is Bjartur, the protagonist of Iceland’s most celebrated work of fiction, “Independent People,” by Halldor Laxness (who is also the only person here to have won a Nobel Prize).

 

Bjartur, a sheep farmer, struggles through one disaster after another to survive in the punishing Icelandic countryside and pay off his mortgage.

 

“He represents the Icelandic soul,” said Ms. Omarsdottir, the political scientist. “He’d rather have his kids starve, his wife die — his two wives die — and his cow die, and lose almost all of his sheep, than be beholden to anyone.”

 

Iceland’s economy is all but stalled as everyone waits for a resolution. Businesses cannot get loans. Foreign currency movement is severely restricted. Unemployment has increased to about 8 percent from less than 1 percent. The economy contracted by 7 percent last year.

 

Iceland’s three McDonald’s outlets closed in October, saying that they were losing money because of the collapse of Iceland’s currency, the krona, and that to make a profit, they would have had to charge $6.36 for a Big Mac.

 

Many Icelanders see Saturday’s vote as an expression of outrage not just against foreign interference but also against Icelandic bankers. These were the so-called Vikings who at the height of the boom ran wild around the world making complicated, house-of-cards deals and encouraging a once prudent population to buy bigger houses and fancy cars in foreign currency.

 

Iceland has foreign debts of $1.36 billion that mature at the end of 2011. No one is predicting, yet, that it could default on those loans, but delays in Icesave will not help matters.

 

“In the worst case, in 20 years we will be like Cuba, with lots of old cars,” Elisabet Run Sigurdardottir, 22, a student, said in a downtown coffee shop the other day.

 

She was joking, mostly. “Only our old cars will be Range Rovers.”-- NYT 3/5/10

[j_b]

To put it in perspective, it is as if American taxpayers were being forced to pay $5 trillion (plus interest) to reimburse customers of the Japanese branch of a failed private American bank, said Magnus Arni Skulason, the head of InDefence, a group agitating for a better deal.

 

time for "structural reform"

 

 

[JayB]

Seems correct to me. What's your point? That all debt - whether it be car loans or public pension obligations have equal claims on the public purse?

 

Not sure where you're going with that one, but feel free to elaborate.

 

surely you jest? The economy cannot tell whether the debt is public or private. Yet you keep pointing out the public debt to justify ending social welfare and completely ignore a much larger private debt that brought the economy to the brink.

 

 

 

I was wondering why you brought this up as a counterpoint - since by your own logic (which I agree with) that means that that the higher private debt gets as a percentage of GDP, the *less* capacity the said economy will have to finance their public debt.

 

It's not as though Greece et al are any less fucked when you add private debt to the pile, or that it's any more likely that the ever-dwindling pool of workers will be able to support the legions of public sector workers and their benefits while the said public sector workers are actively employed, much less while they're enjoying their 30 year retirements.

[JayB]

To put it in perspective, it is as if American taxpayers were being forced to pay $5 trillion (plus interest) to reimburse customers of the Japanese branch of a failed private American bank, said Magnus Arni Skulason, the head of InDefence, a group agitating for a better deal.

 

time for "structural reform"

 

 

Yes. In England and the Netherlands, and rather sooner as a result of the Icelandic vote.

[JayB]

Seems correct to me. What's your point? That all debt - whether it be car loans or public pension obligations have equal claims on the public purse?

 

well, society has to pay for both. you get massively butthurt over an admin making $75k a year from Washington State and fellate some feeble fuckwhit making $750k a year on Wall Street who has the same skill set (the ability to negotiate the hiring process and a pulse). both are a drag on the rest of us.....

 

Yes. All private sector employees have their pay and benefits financed with tax revenues.

[JayB]

Fannie and Freddie aren't examples of privatized profits and socialized risk? Farm subsidies, tarriffs, subsidies, etc, etc, aren't examples of the political system distorting public finances for private advantage? Who's the one with the selective outrage here again?

 

To summarize: JayB thinks Europe sucks because they actually take responsibility and honestly account for the outlay.

 

Still haven't seen any reason whatsoever why the US is going to come out ahead because this "SERVICE ECONOMY" is just as much bullshit as the old, just easier to outsource (as the Filipino legal assistants will tell you)

 

[prole]

It's not as though Greece et al are any less fucked when you add private debt to the pile, or that it's any more likely that the ever-dwindling pool of workers will be able to support the legions of public sector workers and their benefits while the said public sector workers are actively employed, much less while they're enjoying their 30 year retirements.

 

Austerity measures would effect Greek workers almost universally and broad swaths of the population have rightly come out against structural adjustment. They, like the Icelanders, seem to have figured out that they have absolutely NOTHING to gain by holding the blue-bag for those responsible for the mess. In that sense, some of the Teabaggers in this country might have a clue. It simply won't go, Jay.

[Hugh Conway]

 

Staggering growth in the last decade champ - proving the point! Or is this graph somehow supposed to show that past performance is indicative of future returns?

 

Forgive me for thinking the Chinese will figure out that slapping an Apple logo on a piece of shit is worth alot more than assembling the latest iProduct

[j_b]

I was wondering why you brought this up as a counterpoint - since by your own logic (which I agree with) that means that that the higher private debt gets as a percentage of GDP, the *less* capacity the said economy will have to finance their public debt.

 

 

It's not as though Greece et al are any less fucked when you add private debt to the pile, or that it's any more likely that the ever-dwindling pool of workers will be able to support the legions of public sector workers and their benefits while the said public sector workers are actively employed, much less while they're enjoying their 30 year retirements.

 

I brought it up because you are again purposefully confusing cause and effect like you do all the times to indict public services. You claimed the Greek economy cratered due to the public debt and denied the role played by speculation in the casino economy, and the transfer of private liability to public books, which is obviously false. In Greece like elsewhere the public debt exploded due to revenue shortfall and debt transfer to public books, but also because the banksters likely enabled crooked politicians to fudge the books and later bet against Greece.

 

[j_b]

To put it in perspective, it is as if American taxpayers were being forced to pay $5 trillion (plus interest) to reimburse customers of the Japanese branch of a failed private American bank, said Magnus Arni Skulason, the head of InDefence, a group agitating for a better deal.

time for "structural reform"

 

Yes. In England and the Netherlands, and rather sooner as a result of the Icelandic vote.

 

Well, the English and the Dutch have the choice to accept austerity measures or not.

[Jim]

Private Icelandic banks take big risks, then turn to government handouts when their turn at the roulette table doesn't work out. Sound familiar?

[j_b]

well, society has to pay for both. you get massively butthurt over an admin making $75k a year from Washington State and fellate some feeble fuckwhit making $750k a year on Wall Street who has the same skill set (the ability to negotiate the hiring process and a pulse). both are a drag on the rest of us.....

 

Yes. All private sector employees have their pay and benefits financed with tax revenues.

 

Are you claiming the pay of employees in the financial sector (among other recipients of corporate welfare) isn't subsidized by the taxpayer.

[j_b]

Private Icelandic banks take big risks, then turn to government handouts when their turn at the roulette table doesn't work out. Sound familiar?

 

Just wait. We'll hear soon enough how it's all the fault of the greedy municipal street sweepers.

[j_b]

"structural reforms"

 

- privatization of public services

 

- deregulation of economic activity

 

- strict "free trade" policy

 

- cutting public expenditures

 

- favoring cash crops and resource extraction for export

 

- increasing the rights of foreign investors

 

In other words, all that which neoliberals have wet dreams about.

[G-spotter]

Private Icelandic banks take big risks, then turn to government handouts when their turn at the roulette table doesn't work out. Sound familiar?

 

icelandic government stood behind their banks, didn't they?

oops.

 

 

[j_b]

how should the government handle it's debt problem, other than cutting spending and raising taxes? Does greece have a lot of rich people to tax?

 

Greece has a tax evasion rate much greater than that of other European countries. Bringing it down to the European average would go a long way toward solving the debt problem. Easier said than done of course.