by frog
We’re baaa-aack!
The Green Party in Iceland is back in the business of trying to pick up the pieces.
Iceland, the world’s canary in the coalmine of catastrophic economic failure, has just returned the Left Greens to power as Iris Erlingsdottir explains over at Huffington Post:
The voters of Iceland decisively repudiated the 18-year rule of the conservative Independence Party, and affirmed the interim alliance of the Social Democrat and Left-Green parties that has ruled Iceland since the fall of the government earlier this year.
A couple of months ago I blogged about the mother-of-all hospital passes that the Greens received after the financial meltdown and wondered how they would fare.
Icelandic voters gave the coalition government a resounding vote of confidence this week, but there’s a long way to go. Estimates of the financial costs run to US$10 billion while:
The partially completed shells of apartment buildings litter the landscape, and riot police were called in last week to remove squatters from abandoned downtown properties. Three companies go bankrupt every day.
And there’s some negotiation required between the coalition partners as to the best way forward. The Social Democrats apparently want to join the EU to help stabilize the economy while the Left Greens favor a currency union with Norway.
Assuming the alliance can continue to work together repairing the damage wrought by the New Vikings, it appears they may have up to four years before the voters reassess their country’s political direction. Stay tuned.
Published in Economy, Work, & Welfare by frog on Thu, April 30th, 2009
on the trolls and those who are unable to keep on topic
They both favor currency unions why?
Once a nation enters a currency union they give up economic sovereignty. Why would people elect parties who want to give away the sovereignty of the nation?
That said the people of Iceland are not exactly a smart people, they all profited leveraging their country by borrowing money they were never going to be able to pay back.
Look if you take a loan out in another currency to buy a home in your country, you are not smart you’re not a sophisticated investor, you are an idiot and deserve to get burnt. Of course now that they have a socialist government in power the responsibility will be passed from the individual to some other entity.
I wish I could remember the name of this documentary I watched a few years back about Iceland. The film maker was going around Iceland interviewing all these Icelandic people in their mid twenties and telling them that their entire financial system was a hoax, not one person agreed with him, they all told them that Iceland was special and they all deserved there wealth and Iceland’s house prices will continue to go up up up and away.
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Welcome to reality you stupid Vikings.
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What’s that Bunky? Financial Collapse?
Hell ! – better call in the Greens….
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So, turnip28 – you are in fact calling most Kiwis idiots, because our massive balloon of private debt here in NZ is really borrowed in foreign currencies. Do you think we’ll suffer/deserve the same fate here, as Iceland?
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I do.
And as I have argued previously; we are all blameworthy.
And on that same note; most kiwis are idiots, most humans are idiots, its hardly a new concept.
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sapient – you don’t see it in a bell-curvy kinda way – geneii at the top end, idiots at the bottom and a great mass of ordinary folk in the middle?
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He did say “Most” – I’d have to agree with Sapient here…
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Greenfly,
While it is true there is generally a bell-curve distribution that does not mean they are not idiots. There are two main ways of defining an idiot. The first is comparison to the norm; using this it would be true what you sa because it is defined by standard deviations from the norm, this way however is not objective in any manner and only says how one relates to others in terms of intellect and ability. If one defines it based on ability to think and reason, a much more useful measure, then it is anyone under a certain point and since that point is above the middpoint, possbily a standard deviation or two above it, the majority are idiots.
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sapient
So it’s ‘Ship of Fools’ then? I see. That changes everything !
How would one of the idiots be able to identify a non-idiot, I wonder? Doomed to a life of idiocy with no hope of salvation! Dang!
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Sapient Says:
April 30th, 2009 at 11:13 am
> And as I have argued previously; we are all blameworthy.
not all. I didn’t borrow money to buy a house at an inflated price, and nor did my sister.
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Greenfly,
We are all idiots really, just some not so much as others.
There are ways to reverse the induced retardation of stupid parents, they just requre the will to do so, often so lacking in such idiots.
Kahikatea,
Some have more blame than others. I, and I presume you and your sister, did not put all our energy into campeigning the government to change laws which would prevent this, or convincing more people to put their energy into such a cause, or convincing the government to convince other governments to do so. We could of conceivibly done this but we did not. We are all just as guilty for what we fail to do as for what we do do and the present state appears due to a combination of ignorance and apathy.
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greenfly; more like a ‘tub of dummies’ I’ve found….especially as idiocy can be kind of fun, not to say electorally popular…to identify a non-idiot, head out to the airport and canvas those Kiwi’s with one-way tickets. eg: NIWA’s ex-employee Mr Salinger.
Don’t be upset, greed is good, idiocy is better.
“The doorstep to the temple of wisdom is a knowledge of our own ignorance:”
Benjamin Franklin
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I remember telling some family and friends a few years ago not to borrow, and better to consolidate debt cause the economy would be in trouble and house prices would crash.
Oh the ridicule I recieved.
Everything from “shall we stuff our matress full of cash” to “look at henny penny”, in the end I just gave up.
Some people are idiots.
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>So, turnip28 – you are in fact calling most Kiwis idiots, because our >massive balloon of private debt here in NZ is really borrowed in foreign >currencies. Do you think we’ll suffer/deserve the same fate here, as >Iceland?
Having had to endure NY city cocktail parties a few years back where everyone was attacking me for not buying an overpriced condo, I have to agree with sapient.
Will NZ suffer the same fate as Iceland, probably not since we are larger and do actually have some what of a real economy. NZ certainly deserves
to suffer the fate of Iceland.
I mean the government of Iceland guaranteed the deposits and nationalised the banks. If they were smart they would of let them fail. The liabilities of the 3 banks was far greater than the GDP of Iceland, they have now transfered all that debt to each and every person in Iceland not a smart move.
The New Zealand government has down a similar thing with our guarantee which is far greater than our GDP, but since the liabilites are more spread out their is a much smaller chance they would all go bankrupt and need to be guarantee.
Why did the NZ government do this because they needed to keep the foreign money in NZ. We have a really weird way of funding mortagages in NZ, since the banks borrow short and lend long, this is very dangerous since the banks have to roll the debt over each month, if the foreigners decide they want their money ouch its crunch time. So their is the problem Frog if you can continue to convince japanese house wifes to roll over that short term debt life in NZ will continue to stagger on. I mean the absolute worst case scenario is your mortgage could be called now that is a real nasty situation.
Now a foreign investor in NZ has been hit by the falling interest rate returns and the falling dollar, As long as NZ can keep its OCR rate slightly higher than everyone else and not let the dollar slide into oblivion then the party continues, but man every bank manager in NZ must have a stomach ulcer by now.
Oh yeah and a credit downgrade could also cause investors to flee, right now you guys need those japanese houswives, so learn japanese and be real nice to them, Don’t let the NATS go crazy spending money.
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Iceland is a whaling nation. They have become idiots because of the consumption of contaminated whale meat that affects their brain functioning
http://www.hsus.org/marine_mammals/save_whales_not_whaling/learn_more/fact_sheets_on_whaling/human_health_concerns_of_whale_meat.html
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An interesting, if somewhat scary account of a foreigner’s view on the Icelandic collapse is this Vanity Fair article “Wall Street on the Tundra” (http://www.vanityfair.com/politics/features/2009/04/iceland200904)
The parallels with New Zealand (another heavily foreign currency indebted nation) are uncanny, so we’d better learn fast and pay off debt.
Iceland joining a currency union with (resource rich / outside EU) Norway would be like NZ joining Australia in a similar deal and a valid alternative to joining the EU – which has EU sharing of Icelandic fishing grounds attached to it.
Now if only they would stop hunting whales…, and NZ looking at joining the EU!
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uh-huh. So the Japs should be dropping out of the loop anytime now Johan? Great – I like Japan! A small Shogunate in the south perhaps…..yep better Google this one…..we be banning whaling from de inside mon!
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Oh dear. Sapient, turnip28 and frog all agreeing in the same woe-some concept. Was that crack I just heard hell freezing over??
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turnip; the OCR dropped half a point Today….
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- 11.42am; who is looking out for the Sap? Yours Truly, no other….we just have to ask him to withhold embarassing conclusions – else we’ll have to sell him overseas, and I’d be poorer if that happened….
4 diverse opinions agree – most people ARE idiots; where can we take this???….the crack you heard was probably in reference to a joke about brokeback mountain…..don’t worry – Hell is still Hot!
and yes Geoff – the devil wants your real name.
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Mark,
Where can it take us? hmmm, no where we psychologists havint already been and preached fruitlessly about, lol.
Prehaps legislative level changes in education and publicly funded programes to teech parents how to talk to, read to, and teech their children. Prehaps based on Bernstein, Atkinson, Witkin and Berry, and such… cognitive styles and all that. very effective. very very large implications for class perpetuation; correct the cognitive styles and there will be no such perpetuation. Money becoems irrelivant in the face of cognitive styles, so long as a loan is availible for higher education that is, especially under the present NZ system.
we want smart people, we want to stop class perpetuation; we want to change peoples cognitive styles. It is so much harder and less fruitful if it is left until university level, at the least it should be taught in primary
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Yep – I’ve been reading the submissions on Waitangi….the Gender Violence thing….and I see a pattern of Divide and Conquer.
Time we got together Matey – decide the fate of the notion – conclusions aren’t algebraic denominations – it’s right where things get exciting!
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There is a country with a high foreign debt – much of this debt is held against home owners. These home owners have the highest property unaffordability in the OECD. If it was nearer the OECD average, the foreign debt would be a lot lower and the government would have a high credit rating and be able to invest the coutnry out of recession.
But instead there is talk of cutting back government spening – ending R and D tax incentives, export industry investment programmes and investment in Green sustainability of the economy, the environment standards its tourism depends upon and public transportation.
Yet nothing is planned to confront the housing related foreign debt issue. There is an acceptance of a decline in home construction which will result in a housing shortage, rising rents and further upward pressure on property values (despite unaffordability and a further ballooning of foreign debt consequences). The policy of allowing landlords to write off mortage as a cost, gain tax writeoffs against other income when mortgage rates rise, and make capital gains free of tax continue unchecked.
The media of the country ignores all this and thinks the government sound for restraining its own spending.
When in actuality a programme to borrow to build more public housing would prevent a housing shortage developing, lower its budgetary accomodation obligations (as rents were prevented from rising) – and any debt accruing could be paid off by simply selling the public houses to new home buyers. Quite apart from the economic gains in higher tax revenues from the extra home construction work boost to the economy.
And if they actually as well introduced a capital gains tax (if there was a capital gains loss after introduction of the tax it should only be accepted if the original cost price of the property was also below sale price), and ended the tax advantages from rental property – by ending mortage cost deductability from rent – homes would become affordable and future foreign debt would fall relative to our economy (rather than rise as it did 2002-2007).
We are of that country of idiots which did this to themselves and has not the wit to face up to the real issue (I exclude the Green Party and NZF from blame as they wanted another housing policy).
The nonsense of government trying to manage our external debt by cutting government spending when it is sitting on its hands in housing has to be stressed. Given the link to failed housing finance policy to the global economic meltdown this should be a major political issue. If Labour has too many landlord MP’s to care, then Greens should make this issue their own.
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Jeannie; Put him on the List just after Nandor could you?
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>>We are of that country of idiots which did this to themselves and has not the wit to face up to the real issue (I exclude the Green Party and NZF from blame as they wanted another housing policy).
What??????
The green (small g) mantra of smart growth was the main factor behind the bubble, everything else can be put down to greed as you guys would call it otherwise known as human nature
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Oh really?
The “green mantra of smart growth” did not exist in the USA where the bigggest property bubble fell apart with global consequences.
The amount of cheap finance and low deposits required, the friendly tax regime to speculation in property (or property finance) had everything to do with it – it was a convergence of global finance practice and enabling US Fed and New Zealand government policy.
Human greed was excited by those who played the public to enrich themselves (and I include Labour and National politicians in that as they played to the populism of “temporary” wealth to remain popular with voters) .
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A lot of US cities do have smart growth policies actually (Portland is the classic example I suppose).
The problem with cities that put in MULs is that they didn’t allow for enough intensification to counter-balance this restriction. It is housing supply, not land supply, that is critical here. If you’re going to stop a city spreading outwards you have to allow it to spread upwards – and council policies in the past 10 years have not allowed for that easily enough, particularly in Auckland.
Most recent articles I’ve read on urban development in the USA are predicting the end of the ex-urb and other ghastly recent inventions. Great!
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Well you shreds might have nodded off! (i’d be unwurried if’n you hasn’t) But we face a world where our past dealings may not be usefefull.
What you should already know is that Historic New Orleans is gone for ever.
Can they save Florida? Nup!
400 billion in Real Estate down the pipes
Can the ‘markets’ absorb this?
Bum again
Who will underwrite this loss?
NZ, Ozzie and Europe and China;- can they sustain the equation? – not a chance.
Lucky the fiejoa’s are ripe…
Sustainability anyone?
Good thing I like tent cities…and weve only just begun
Hiya Santa – nothing again this year?
The ocean doesn’t have to rise much more (so much junk, these 20yr models)
How much will “Atlantis” be worth?
Nada, Zip, Caca – if only the high moral ground wasn’t a closed shop!
Eh Phil…eh???”’!@!!…???
Novices should affect underwater gear – with a swineflu mask
The revenge of Piggy is a terrible thing.
G’night.
there is no Frog but Frog
Vote Green and you might be redeemed
Sure we can burn them Trojans – but, what next ???? Geoff; My real name is Clint Rickards and I know you’ll fo’give me…
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The swing from on extreme to the other just demonstrates dysfunction in the political system. It is harder to promote grey than black and white.
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I’ll rephrase
The “green mantra of smart growth” had little if any impact on the housing asset bubble in the USA – which fell apart with global consequences.
The prime cause was the amount of cheap credit available to property developers – they brought a glut of housing onto the market, which could only cope by developing financial services to those too poor to buy a home (sub-prime loans).
The idea that the land use policy of a few provincial cities (which may have increased the cost of new housing in these areas) played any part is risible.
Today the US housing construction sector is in freefall tens of thousands of Americans are being laid off in this sector and its just going to keep going on and on for months and months (years some say) – up to 1 in 7 homes are unoccupied. It’s a national glut and not caused by tighter restrictions on land use policy – which would restrain new home building.
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Why do we pay Bollard any money, his plan seems to be copy what the US federal reserve was doing about 9 months ago. Couldn’t we have a computer program making these decisions for us and wouldn’t it save us some money.
Can someone explain to me why anyone in society listens to economists.
I mean Astrologers and Economists have a LOT in common.
1) Astrology isn’t a science neither is Economics.
2) Astrology makes wild predictions that are usually not true just like Economics.
An infant looking at the basic premises of economics would go WTF you guys actually believe that rubbish. How any non-idiot human being could set through a first year paper on economics is beyond me.
Ok Frog in light of the fact that Bollard is an idiot of epic proportion, why don’t you greens push for a bill that replaces the governer of the reserve bank with an Astrologer or a Tarot card ready, hey at the least I don’t think a Tarot card reader could do worse than Bollard.
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Also Frog why do you always miss things like this:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10569671
Look we’ve been talking about NZ’s debt problem in this thread, look who’s waiting in the wings to solve your debt problem. Oh well little NZ you were once a colony of England now your going to be China’s b&^&*.
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