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Icelands recovery

Icelands recovery
Picture credit: may15internationalorganization.blogspot An Italian radio program's story about Iceland’s on-going revolution is a stunning example of how little our media tells us about the rest of the world. Americans may remember that at the start of the 2008 financial crisis, Iceland literally went bankrupt. The reasons were mentioned only in passing, and since then, this little-known member of the European Union fell back into oblivion. As one European country after another fails or risks failing, imperiling the Euro, with repercussions for the entire world, the last thing the powers that be want is for Iceland to become an example. Five years of a pure neo-liberal regime had made Iceland, (population 320 thousand, no army), one of the richest countries in the world. Contrary to what could be expected, the crisis resulted in Icelanders recovering their sovereign rights, through a process of direct participatory democracy that eventually led to a new Constitution. Related:  Project Europe

Gastbeitrag: Zeit für die Zentralbank 28. Oktober 2011 Die große Rettungsshow für den Euro lässt die Börsianer jetzt jubeln. Doch die einzige Chance, die nächste Krise zu verhindern ist: Die EZB muss die Staaten stützen. Die Börsianer jubelten kurz über die Taten der Euro-Retter. Doch abseits des Börsenparketts gab es nichts zu feiern. Merkel, Sarkozy, Junker & Co hätten die öffentlichen Finanzen endlich aus der Geiselhaft der Finanzmärkte zu befreien können. Um diesen Wahnsinn zu stoppen hätten die EU-Staatenlenker den Rettungsfonds an den Tropf der Europäischen Zentralbank (EZB) hängen müssen. Doch die deutsche Bundesregierung wollte den Gordischen Knoten nicht durchschlagen. Merkel, Schäuble, Rössler & Co. nehmen dieses Risiko in Kauf. Die Bundesbank und die deutsche Wirtschaftswissenschaft predigen seit über 30 Jahren, dass wer Geld druckt, Inflation erntet. Die Gralshüter des Monetarismus haben aber noch ein anderes Glaubwürdigkeitsproblem. Merkel & Co. können mit diesen Widersprüchen leben.

Coppola Comment UK hires extra tax collectors to police super-rich LONDON — Let the audits begin. As the U.K. tightens its belt during economic uncertainty, a senior government official said Sunday he was hiring more than 2,000 extra tax inspectors to make sure that Britain's wealthiest feel the squeeze. The British Treasury's Chief Secretary, Danny Alexander, told the Sunday Independent newspaper that his priority was "making sure that those with broadest shoulders bear their fair share of the burden." Alexander said a 100-member "affluence team" would be in place in less than a month to keep an eye on the country's wealthiest taxpayers — the estimated 350,000 people whose personal wealth exceeds 2.5 million pounds ($3.95 million). The British government's crackdown on tax evasion has already netted more than 2 billion pounds ($3 billion) a year, Alexander said, predicting that figure could rise to 7 billion pounds ($10.6 billion) a year by 2015. "Something is not right here," he told the broadcaster.

No Draghi Ex Machina So last week European leaders announced a plan that, on the face of it, was pure nonsense. Faced with a crisis that is mainly about the balance of payments, with fiscal crisis as a secondary consequence, they supposedly committed everyone to severe fiscal austerity, which would guarantee a recession while leaving the real problem unaddressed. But all this was supposed to work, according to many observers — and, briefly, the market — because the pain would provide the cover the ECB needed to step in and buy lots of Italian and Spanish bonds. In effect, the plan is supposed to rely on a Draghi ex machina, which turns contractionary policies expansionary. It’s actually quite remarkable how many sensible people base their analyses on the presumption that the ECB will do what has to be done. Barry Eichengreen, who is a genuine expert on all things euro, starts his analysis of prospects for 2012 with the confident assertion that Draghi will ride to the rescue.

What to do if the double dip is real? 18 August 2011Last updated at 15:36 It is gradually dawning on the global political elite that the economics they believe in do not work. They do not work, in particular, in the current crisis and continued pursuance of present policy is threatening a double dip recession (Morgan Stanley, the Bank of England's Andy Haldane), a 1930s-style monetary collapse (Fed dissenter Richard Fisher), Eurozone breakup (Nouriel Roubini) and political mayhem (Jeff Sachs). Free market economics caused the crisis and the rough-hewn Keynesian stimulus policies improvised in 2009 are failing to get us out of it. Haldane, in a Bank of England discussion paper today, compares the situation with the one facing Roosevelt in 1938, when Congress forced him to rein in stimulus, prompting a double dip: he ripped up bank regulations and forced banks to LEND. Fisher, as quoted in an excellent post by the FT's Isabella Kaminska, says: • By deciding to bankrupt states instead of banks we avoided a Great Depression

Spain raises taxes on the rich | Business Spain today became the latest European country to hike taxes on the wealthy, with a new asset-based tax targeting the country's richest people. Spain's socialist government hopes that the new wealth tax will raise up to €1bn in a country where growth is grinding to a halt and this year's 6% deficit target looks increasingly tough to meet. The move represents a U-turn for prime minister José Luis Rodríguez Zapatero, who abolished a similar wealth tax in 2008 — just before the country plunged towards recession. "The economic crisis makes it necessary to bring this tax back, applying principles of fairness so that those with bigger assets can be taxed and so those who have greater wealth can contribute more to getting the country out of the crisis," a finance ministry statement said. Spaniards with €700,000 of assets in real estate – excluding their main home – as well as in stocks and bank deposit will have to pay the new tax.

Collapse of the Celtic Tiger Filmmaker: Sinead O'Shea Ireland has been one of the largest casualties in the global financial crisis, which began during the banking collapse of 2008 and has continued to impact markets and destabilise the developed world ever since. Following a government guarantee to underwrite the country’s six major banks shortly after the crisis broke, Ireland’s population of 4.5 million was shouldered with an enormous debt of €400bn ($515bn), proportionately the highest per capita commitment in the world. Yet with bank liabilities accounting for an eye watering 309 per cent of GDP, it quickly became apparent that Ireland would fail to find its own way out of the economic downturn. As a consequence, in 2010, the EU and IMF stepped in to offer Ireland a rescue package worth €85bn ($109bn) - then one of the largest bailouts in history. How different it had been only a couple of years earlier. Of course, like all bubbles, it had to burst eventually.

The Robin Hood tax: a big step for capitalism, a major stride for development | Global development What connects hunger in Africa, people dying for want of medicines or health care and fast-paced global capitalism? A small tax on financial transactions. A new report about computer-driven high frequency trading (HFT), compiled by supporters of the Robin Hood tax campaign, reveals a niche world of millions of transactions each day. HFT is a rapidly growing phenomenon, and now accounts for over 70% of the UK equities market. These millions of trades all rely on ultra-thin margins, meaning that one key way to reduce their number is a small tax on each transaction. The readiness of Chancellor Merkel and President Sarkozy to propose a transaction tax at European level is a significant boost. The announcement was greeted by the usual derision from the City and its supporters. But the UK already has one of the biggest routine transaction taxes in the world, the stamp duty, and raises £4bn a year. If the stamp duty were extended to derivatives instruments, it could raise a further £3bn.

Danish voters elect first female prime minister - CTV News COPENHAGEN, Denmark - Denmark has elected its first female prime minister, ousting the right-wing government from power after 10 years of pro-market reforms and ever-stricter controls on immigration. Near complete official results showed Thursday that a left-leaning bloc led by Social Democrat Helle Thorning-Schmidt would gain a narrow majority in the 179-seat Parliament. "We did it. Prime Minister Lars Loekke Rasmussen conceded defeat, saying he would present his Cabinet's resignation Friday to Queen Margrethe, Denmark's figurehead monarch. "So tonight I hand over the keys to the prime minister's office to Helle Thorning-Schmidt. The result means the country of 5.5 million residents will get a new government that could roll back some of the austerity measures introduced by Loekke Rasmussen amid Europe's debt crisis. The opposition won 89 of the mainland seats compared to 86 for the governing coalition, according to preliminary results with 100 per cent of votes counted.

"Islands Häresie stellt einen Test der ökonomischen Doktrin da" | Telepolis (Print) "Islands Häresie stellt einen Test der ökonomischen Doktrin da" Christoph Mann 31.01.2012 Island erholt sich von der Krise - auch weil es sich weigerte, die Bankenschulden zu sozialisieren, und mehr Demokratie zugelassen hat. Nun stellt sich der IWF hinter Island Island, das im Oktober 2008 seine aufgeblähten Banken gerettet hat und kurz darauf selbst vor der Pleite stand, erholt sich von der Krise. Die Präsidenten der Isländer werden zwar vom Volk gewählt, sie machen aber wie die der Deutschen vor allem dann Politik, wenn sie etwas nicht tun. Grimsson hat zwar bereits 2004 ein umstrittenes Mediengesetz nicht unterzeichnet, internationale Furore machte er aber 2010 und 2011, als er sich weigerte, das Icesave-Gesetz zu unterzeichnen. Noch bemerkenswerter ist allerdings, dass ausgerechnet der IWF seit kurzem Grimsson den Rücken stärkt. Island wurde weder zum Kuba noch zum Haiti des Nordens Island ist hingegen ein Erfolgsmodell Anhang Links

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French Socialist rivals hold TV debate 16 September 2011Last updated at 02:11 Candidates spelled out how they planned to solve France's problems The six contenders for the right to stand for France's opposition Socialists at the 2012 presidential poll have held a live TV debate. The candidates were careful to avoid attacking each other and instead sought to show a common aim in ousting President Nicolas Sarkozy. However, the debate was overshadowed in the French media by the president's visit to Libya on Thursday. The Socialist candidate will be chosen at US-style primaries next month. For the first time the post will be open to any French voter with leftist leanings. Critics say the primaries campaign has lacked dynamism. The front-runners are former party boss Francois Hollande and the party's current leader, former cabinet minister Martine Aubry. Opinion polls suggest Mr Hollande has developed a clear lead over Ms Aubry. "My priorities are yours - employment, spending power, education and security," said Ms Aubry.