Had we not agreed to collectively stick our heads in the sand and wait this thing out?
But here we go again…
On the ratings agencies:
To listen to European and US figureheads pour scorn over the credit ratings agencies is quite surreal. The ratings agencies´position in global finance is no coincidence. They are in fact perfectly rational entities enabled by dominant ideology and policy on both sides of the Atlantic, especially in the nations now most vulnerable (US, UK, Italy, Greece, Ireland, Spain, Iceland, Portugal, EU as a whole…etc.).
If you hand over regulatory responsibility to the free market itself then of course you are going to be at the mercy of S&P, Moody´s, Fitch et al.
On politics:
Complaining about a loss of sovereignty is an easy foxhole for populist politicians like Berlusconi and the Tea Party nut-jobs to run into at this moment. The crisis is a result of policies pursued for decades by politicians and policy-influencers since Reagan, Thatcher, Friedman and others bent on dismantling the post WWII Keynesian system. The outcome of the crisis probably depends on whether Western nations pool together on further fiscal and regulatory co-ordination across borders or each go their own way.
On democracy:
The voting public plays a key role in deciding the course and might be completely overwhelmed. Susceptible to populism, extremism, nationalism and isolationism at the best of times, why are voters going with parties which clearly oppose their general interests, such as the Tea Party, Independence Party and the People of Freedom?
The role of new media makes this one hard to predict. How will the public´s perception be shaped? Surveying the major Icelandic media and internet sites you´d be forgiven for thinking that the main issues of our times were a overly hyped outdoor festival in Vestmann Islands, the beginning of the new English Premier League season or whether Icelandic cross-fit athletes should pay taxes.
The public is still living in a bubble. Will it burst?
Monday certainly looks interesting.
Related posts:
Lino
6 months ago
why Tea Party are nuts for you? To me they seems the only sane minded people in the american disaster, the only ones to tackle the real problem: goverment profligacy and irresponsibility.
As for loss of sovreignity, they are right: they lose the power of making things even more messy. People/governments that do not know how to manage themselves responsibly deserve losing sovreignty and if they are not smart enough to do the responsible thing, they should be made to or abandoned to their fate.
The current crisis is totally governments’ made, financial markets are not the culprits and rating agencies are just messengers bearing bad new that many government idiots would shoot as if that changed the term of the problem
Dadi
6 months ago
Lino, I think we could agree that Bush’s government got America into the red through wars and tax cuts and that Obama’s government has not done much in way of correction.
To claim the Tea Party as the solution is far fetched though. As Jon Stewart pointed out they appear to be hell bent on going all in until there is not a state owned traffic light left…
Lino
6 months ago
Dadi,
it’ not just Bush or Obama, it’s not X is better than Y, the whole system is rotten.
From early 70 America was finished and its finances in parlous state.
At the end of WWII USA was the financial powerhouse of the world: it owned more than half of the world’s gold reserves, the dollar was the world’s currency, everyone was in debt to the USA.
Beginning 70s,25 years later it was over (http://en.wikipedia.org/wiki/Nixon_Shock): Vietnam but not just that, the Cold War and especially the american grew decadent and corrupted and started living beyond their means with deficit a constant companion. The individual american, the political class all of them contributed to the system that is unravelling right now.
As for Bush, say what you want but one thing is certain: he got 9/11 and wars cost horrendously. Had it been Clinton or Obama in such situation, the result would be the same.
The Tea Party is the only one’s who’s saying: stop the deficit madness. Stop embarking on more debt. And for sure, R/D politician have no interest in doing so.
If the traffic light is bought on debt, if federal gov will not do without it, insolvency will: you only have the right if you can afford it.
R/D behave generously with somebody else’s money, that’s very easy, financing waste, prok barrel politics, corruption and moral hazard on a cataclismic scale and the “Washington way of doing politics”
neil
5 months ago
I was hoping if you were thinking of opining on the Huang Nobu/chinese investment in ICeland thing that is going on. Lots of interesting angles and certainly seems like the story of the moment.