Just came back from Joseph Stiglitz’ seminar at the University of Iceland.
The place was packed, so much that people had to stand and sit in every corner. Many were not even able to get inside.
The press was there, as usual taking photos and newsreels for tonight’s evening news. Actually the photographers for the daily’s were early, the TV crew arrived late.
What caught my attention was that as Stiglitz was in the middle of his speech, and actually describing how he would solve the household crisis (reader and avid commentator to this site Vilhjalm A. would be pleased to know it is the Zingales plan), the newscasters were sitting outside the hall, talking amongst themselves.
Now I cannot wait to see the evening news and how they serve the story of Stiglitz’ brilliant input into the Icelandic crisis. Will the newscasters ask relevant questions? Or are they just sitting on the outside?
I’ll write more on the seminar itself later tonight. I just wish we had this sort of intellectual thinking close to our government here but I guess we’ll have to do with a visit for now.
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The Chosan
2 years ago
Important questions…dont think so. Since when has the Icelandic media asked anything worth while?
Vilhjalm A.
2 years ago
The newsite Eyjan in its article has said that Stiglitz was in favor of ideas like the 20% general debt reduction (the idiotic plan of right-winger Tryggvi Thor Humbertsson), so the mis-reporting of Stiglitz has already begun.
That’s not what he implied in his TV interview – he said something like, debts should be reduced, but not across-the-board but according to need.
Actually, I didn’t get the impression from the TV interview that he really knew very much about the details of Iceland (nor should he really, he has better and bigger things to think about), mostly he offered very logical and sensible general advice for any country in financial trouble. But that doesn’t matter – whatever Jospeph Stiglitz says or thinks about Iceland while sitting on the toilet for ten minutes is much more valuable than a month-long convention of all the best economists in Iceland.
On the subject of Icelandic economists, Jon Danielsson took a big drop in credibility yesterday when he suggested on the same TV show lifting all currency restrictions. It’s quite true that currency restrictions have caused real problems but lifting controls would mean an enormous depreciation and inflation — would the ISK at 500-700 benefit the counry? I don’t think so.
It’s strange how Icelandic economists become fixated on their pet-solutions to the problem. Thorv. Gylfason for instance can think of nothing but joining the EU.
Mike (UK Nordic analyst)
2 years ago
Need to be careful with economists. Right now we have Jon Danielsson spouting the “Chicago-school” of efficient markets (leave the market alone and everything will come right, i.e. let the ISK float) and Joe Stiglitz parading his empirical “information asymmetry” and using Iceland as an example. This is why he can use a word such as “innocent” when referring to Iceland. He doesn’t mean that you’re not to blame – oh no, not by a long way. What he is saying is that in every deal there is a fool – and Iceland was the fool time-and-time again because Icelanders didn’t know what they were doing either personally (look at the posts about the mortgages – most Icelanders don’t know how they work or the likely consequences) or as corporations (no specific example needed!).
Joe is right in his analysis but he isn’t necessarily right on what action is needed. Also some of what he says might be unpalatable for Iceland. For example, with his zeal for intervention he is quite positive (in general) about the IMF. Also Joe knows his economics but he isn’t so hot on finance.
But, if you want my tuppence – listen to Joe and ignore Jon!
Dadi
2 years ago
Thanks Mike and Vilhjalm for your brilliant input.
Stiglitz clearly stated in the meeting a preference for a solution where the bank and customer would exchange tit for tat. For a reduction in the mortgage, the bank would get a cut in the sale of said property in the future.
He also mentioned a solution where those who would get reductions would pay back through special taxes to the society which granted those reductions.
But the press was sleeping outside of course.
Mike, you are absolutely right…we should be careful with economists. But some of them do say some darned smart things and Stiglitz is a breath of fresh air. Apparantly Stefan Snaevarr, professor in philosophy at the University of Lillehammer is likening his appearance here to the one Milton Friedman made in Iceland in 1984. That it might signify a large shift in Icelanders’ relationship with economics.
Joseph Stiglitz’s Got The Solution But Lilja Doesn’t Get It
2 years ago
[...] But the evening news were all about Stiglitz’ comments on Iceland’s relationship with IMF. And Channel 2 and the State Broadcasting Channel published such identical stories that you wonder why they just didn’t send one interviewer and one cameraman? They certainly didn’t seem to be listening to his speech. [...]