In reading this piece from Bloomberg News, it is hard to reach any other conclusion.
The government in Iceland forced the banks to write down loans to a maximum of 110 percent of existing property value. The banksters and the politicians who facilitated the Icelandic real estate bubble are being prosecuted.
In this country, however, it is the banksters whose interests remain paramount. It is pretty much a bipartisan endeavor to make sure that the bankers themselves feel no pain, from bailouts to sweetheart deals to ensure that they never face any accountability for their massive ponzi schemes. The banksters in this country took their ginormous payouts from all sorts of schemes and then have been laughing all the way to the Hamptons while the taxpayers foot the bill. Not a single one of the big mortgage fraudsters has been prosecuted. Oh, the S.E.C. has had stern words for some of them, but that's as far as it has gone.
Iceland had the right of it. But then again, their government, unlike ours, does not exist to serve corporate interests.
(H/T)
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Saturday, February 25, 2012
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The population of Iceland is a bit over 300,000, roughly the same as combining Santa Clara CA and Sunnyvale CA -- i.e., roughly the size of a small-to-midsize city. Government on that scale seems to work reasonably well without being seized too easily by special interests, as my utility bill attests (I'm on Santa Clara Municipal Power and my bill is literally 1/3rd of what it would be in neighboring PG&E territory, despite the fact that the municipal power company is a huge cash cow for the city). I'm wondering if perhaps it is simply impossible to run a government that serves the people if the number of people governed is over a certain size...
ReplyDelete- Badtux the Curious Penguin
I have been tempted on occasion to move to Iceland. Actually spent a summer there a while back. Not perfect, but nice....
ReplyDeleteIt get better: banksters/fraudsters that went over the hill have had their pictures laminated to the back of urinals.
ReplyDeletehttp://www.guardian.co.uk/world/gallery/2009/apr/26/1?picture=346486149
Something else that may tickle the fancy of our Fearless Leader is that I've read that the Icelandic men are generally wild-ass maniac risk-takers, while the women are more the steady anchor. None of the banks that failed had women CEOs....
And another thing...here is an excellently historical overview of banking that explains the how and why of its evolution to the go-go risk taking of today:
http://www.lrb.co.uk/v34/n04/andrew-haldane/the-doom-loop
Regarding the risk taking:
ReplyDeleteIn electronics we have the concept of a positive feedback loop. Please note that this is not a *good* thing, because the result is that the entire system ends up blowing up / catching on fire. So how does this work? Well. Bank A takes additional risk. In the short term, this pays off, and allows them to out-compete the other banks for both prime and sub-prime loans. The other banks then take that same risk themselves or else risk losing business. So bank A then takes even *more* risk. Wash, rinse, repeat. As long as the circuit is getting positive feedback from its output (profit), it will continue heaping more and more risk into its outputs, until finally one day the whole thing bursts into flames and melts down into slag.
The only way to prevent a positive feedback loop from turning a circuit into slag is to put a regulator into the circuit -- a chunk of hardware that damps the excessive feedback to ground. Or, in the case of banks, will not allow the bank to pile more and more risk into its outputs. Otherwise the entire banking system is guaranteed to blow up because of that positive feedback loop -- as is evidenced by the entire 19th century, when the banking system blew up multiple times during that century and each time the economy ended up back at barter and had to be restarted from scratch.
- Badtux the Electronics Penguin
Sigh, I guess they don't need any old arthritic unemployed guys do they?
ReplyDeleteHow much does it cost to immigrate if they would?
w3ski
Pretty much the only countries that want old gringos are in Latin America, and only if you're already receiving your Social Security. Otherwise those of us above a certain age are viewed as something akin to vermin that must be tolerated but not really wanted.
ReplyDelete