Iceland's microcosm of crony, casino capitalism (which is larger, in currency terms, than the real economy)

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[Sprung from the Facebook prison]

Wall Street on the Tundra | vanityfair.com
Source: www.vanityfair.com
Iceland’s de facto bankruptcy—its currency (the krona) is kaput, its debt is 850 percent of G.D.P., its people are hoarding food and cash and blowing up their new Range Rovers for the insurance—resulted from a stunning collective madness. ...
Great writing. Pay attention to the author's numerous cues about the parallels between the U.S. and Iceland.

Reposted from Nina Smolyar: http://www.facebook.com/ext/share.php?sid=91560595311&h=v2Fa3&u=p0UXr&re...

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Benjamin Melançon
Benjamin Melançon at 6:23pm April 23
(reposting my own comment) there is something we can do to extinguish the fuses. Money has always been "just" a way to organize ourselves; one disproportionately controlled by a vicious few. We can organize to meet our needs much better than this, especially without so many resources going to non-productive speculation. We can even have a ... Read Morecurrency not based on theft and exploitation. The hard part is coordination. Maybe that will be easier when we all decide to put the women in charge. Not on the scale of government, either, though I hope Johanna Sigurdardottir, the world's first openly lesbian head of state, can help build something sustainable out of Iceland's exploded bubble.

(And I think the Icelandic painter never named must be Brynjúlfur Jónsson. How do reporter's refer to such things and not just tell us poor readers the answer?)
Jeff Hartman
Jeff Hartman at 6:32pm April 23
So we should all gof for something like this, maybe?
http://www.nytimes.com/2009/04/24/world/europe/24iht-spain.html?ref=glob...
Benjamin Melançon
Benjamin Melançon at 8:38pm April 23
Cool, hadn't heard of that town. Funny how the mayor is a microcosm of the single-leader revolutionary state. Funny also how the article quotes critics with no fact-checking. If we must look at an existing example, maybe more like this, also in Spain: http://www.cooperativeindividualism.org/long_mondragon.html

Spain would have an incredibly ... Read Morehigh standard of living, for all, and no dukes left to expropriate their estates, if not for the Franco dictatorship. (And if the rest of the world hadn't let the Nazis prop up that evil regime in the Spanish Civil War, Hitler wouldn't have been able to do so much damage.) But then, Spain and the world would probably have been better off without the Crusades ending a tolerant Muslim rule that brought prosperity without pillaging and subjugating a good chunk of the world...

Jeff Hartman at 9:20pm April 23
I'll argue a bit with that last part only! One of the main reasons that the Reconquista was able to gain any foothold at all was because the Caliphate of Cordoba had disintegrated into a number of warring taifa kingdoms. There was considerable competition between Muslims who traced their lineage to Africa or the Middle Eastern and there was ... Read Moreprobably a fair amount of what we would call racism against darker skinned Muslims.

Muslims, particularly in Cordoba were definitely more tolerant of Jews than most Christian states were (though there was a heyday in England between 1066 and the thirteenth century), but I feel like it's my duty to prevent overly inflating the values of the medieval Muslim world, which were frequently just as warlike and fractious as their Christian counterparts, particularly outside of the urban centers.

Benjamin Melançon at 10:24pm April 23
Oh yeah. And I've forgotten all the who is who and the what's what, but I do know there was a losing out internal in the Muslim world by the more enlightened group that took over Spain in the first place. Would love a refresher on that. Still... I mean, Spain went on to plunder about half the world after that, burning through people and ... Read Moreresources like Bolivia's Potosi silver mine -- http://www.youtube.com/watch?v=9r7JHAqoZJs -- and squander that immense wealth, or rather let a fair amount end up going into the slave trade and the launch of capitalism, even as Spain itself was left behind even by Western development standards compared to the Netherlands, France, and England. A waste of suffering and resources probably eclipsed by what we've been doing with oil in the last 100 years.

Mitch Morgan at 11:36pm April 23
With the way the Fed operates our monetary system, I feel the US dollar will eventually see a similar fate as the krona.

We need to abolish the Fed and have the treasury issue money that is backed by gold/silver (like JFK started to do).

I recommend youtube/googling Ron Paul, economist Peter Schiff, the federal reserve, and fractional reserve lending, and see where I'm coming from.

Benjamin Melançon at 12:02am April 24
Hey Mitch! Totally agree that the government-granted monopoly to select banks to create money out of thin air that they lend to us and we have to pay back at interest – and the value of this money is based on faith in the government - is insane. And I was upset when the government raided Ron Paul supporters who had their own gold dollars. In ... Read Morepart I was upset because my take is that we are going to need multiple currencies, and we can do better than basing our money on precious metals, which is also somewhat arbitrary and has a long history of being used to maintain inequality and extract labor from the rest of us which, in Marxist terms or not, is the source of value in everything that's not lying around already. Or basically there's the sun, our work, and a little bit of geothermal.

Check out Douglas Rushkoff for some thoughts on truly changing the monetary system: http://www.arthurmag.com/2009/03/23/hack-money-hack-banking-rushkoff-on-...

Jeff Hartman at 12:22am April 24
I think I'm somewhere in between. Our current money system really isn't based on much, but basing it on precious metals or pork futures or whatever is also kind of crazy. I don't think that the Fed itself is necessarily the problem, but it certainly hasn't been well run over the last twenty years or so. I don't want a return to nineteenth century banking insanity, though. Up until now we had almost a century with only a single major depression, and I personally believe (and I know that there are plenty of theories) that the primary causes there were WWI, the Treaty of Versailles, isolationism and monopolistic industry.

Long term issues aside, the current credit/housing/lending crisis is definitely more the fault of private banks (i.e. Band of America, Citi), who are technically members of the Fed and have controlling interests on the Reserve Banks board. There are more and more monopolistic corporations and private interests just focus too much on short term profits.

Jeff Hartman at 12:25am April 24
Eh, ran out of space. My main points were that gold currency barely worked and frequently didn't in the nineteenth century and earlier, but that the Fed isn't really an effective entity if it's just trying to shore up private mega-banks and ensure that they return ridiculous quarterly profits. Mostly because those profits aren't made of anything.

Benjamin Melançon at 2:40am April 24
I think the thing about profits is the fundamental point. Our dear wealthy overlords insist on finding *some* way to get 10, 15, 20, 25, even 30 percent annual return on investment — based on an economy growing at about a tenth of that. As long as that's the case, there will be the pressure both to squeeze everyone else for everything they've got and the tendency toward bubbles and the boom-bust cycle.