All Things
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The deficit and wages. The Democrats refuse to cut services like Social Security, Medicare and Medicaid in order to reduce the government deficit. They think that would be totally unfair. The Republicans refuse to raise taxes on corporations...
- Blame Capitalism, Not The Capitalists
Blame Capitalism, not the Capitalists.Our economy is in the doldrums. Unemployment is very high--if you count the underemployed, 20% of the work force are working less than they would like. The unemployed have no money to spend. Those who...
- Level Playing Field For The Big Banks
A Level Playing Field for the Super Banks? The world's economic big-wigs are meeting, as they do every so often, in the Swiss ski resort of Davos. The bankers among them expressed concern about plans to subject the banks in the US and elsewhere to...
- The Bailout And Democracy
The current financial crisis is not only a disaster for the economy but it exposes in the starkest terms the collapse of American democracy. A significant number of legislators in Congress, both Democrats and Republicans, refused to vote for the first...
- Regulating The Markets
Last week, Sen. McCain came out in favor of regulating financial markets. That is a departure from traditional Republican orthodoxy that is truly astonishing. For 100 years or more, Republicans and many Democrats have told us that markets are "self-regulating."...
All Things
Miracle in Iceland
Iceland has a population of some 300,000 people. In 2008 it suffered the same problems experienced by our country, by Greece, by Italy, by Spain, only worse– people and banks had borrowed a great deal of money on the strength of a housing bubble. When the bubble burst the banks went broke and ordinary people lost their homes and their jobs.
What we did, what the Greek government is doing under pressure from the European Union, is to bail out the banks and make the people pay for it. This is known as an "austerity program" which cuts social programs and cuts wages, while banks recover and make more money than ever.
As a result the population is impoverished, business declines, more people are out of work and thus there is less and less money to spend – which is very bad for business. Unemployment in Greece is close to 25%. It is still 8% in our country. Our economy is not recovering at all, or only very slowly.
Iceland, by contrast, is doing well. Their national product is not quite what it was before the crisis but it is growing every year. They are doing better than the rest of Europe. They're doing better than we are.
They chose the opposite policy from the United States and the European Union. They let the banks go broke and maintained social programs and wages. The ordinary people had money to spend and that was one of the factors that helped the economy recover. Now they are thriving.
What is more, the Icelanders jailed the bankers who ruined the economy in the first place. In the US, the US attorney in New York yesterday filed the first criminal case against one of the banks who are responsible for the current crisis, J.P. Morgan. They are working on some other cases, but my bet is that no one will go to jail.
Americans like to quote Lincoln's phrase from the Gettysburg address about "the government of, for and by the people." But our government is not for the people; it is for the banks. The Icelandic government is for the people and they find that to be a good policy.
-
The deficit and wages. The Democrats refuse to cut services like Social Security, Medicare and Medicaid in order to reduce the government deficit. They think that would be totally unfair. The Republicans refuse to raise taxes on corporations...
- Blame Capitalism, Not The Capitalists
Blame Capitalism, not the Capitalists.Our economy is in the doldrums. Unemployment is very high--if you count the underemployed, 20% of the work force are working less than they would like. The unemployed have no money to spend. Those who...
- Level Playing Field For The Big Banks
A Level Playing Field for the Super Banks? The world's economic big-wigs are meeting, as they do every so often, in the Swiss ski resort of Davos. The bankers among them expressed concern about plans to subject the banks in the US and elsewhere to...
- The Bailout And Democracy
The current financial crisis is not only a disaster for the economy but it exposes in the starkest terms the collapse of American democracy. A significant number of legislators in Congress, both Democrats and Republicans, refused to vote for the first...
- Regulating The Markets
Last week, Sen. McCain came out in favor of regulating financial markets. That is a departure from traditional Republican orthodoxy that is truly astonishing. For 100 years or more, Republicans and many Democrats have told us that markets are "self-regulating."...