10/15/2010 archive

The Shadow Elite

Shadow Elite: The "Inside Job" That Toppled Iceland’s Economy

Robert Wade and Silla Sigurgeirsdóttir

Posted: October 14, 2010 07:12 AM

Iceland’s flex net operated on the edge of and partly in opposition to a traditional elite, a bloc of some 14 families known popularly as the Octopus, which dominated Icelandic capitalism from the start. In the early 70’s, some university students took over a journal called The Locomotive  to promote free-market ideas–and, not least, to open up career opportunities for themselves, rather than wait for Octopus patronage. The two future PM’s, Oddsson and Haarde, were members.

They were devoted to neoliberal policies, and privatized publicly-owned enterprises, to the benefit of their Locomotive cronies. In 1991 Oddsson began his reign–not too strong a word–as PM, explicitly invoking Reagan and Thatcher as models and drawing on the same ideas of “New Public Management,” which sanctioned large-scale outsourcing of government work to private actors. Then he set in motion the dramatic growth of Iceland’s financial sector, before installing himself as Central Bank Governor in 2005. Finance Minister Haarde took over as PM shortly after.

With near-exclusive access to information, power brokers can also brand it for the media and public to suit their own purposes, with only a few able to counter them. The Oddsson and later Haarde government proved masterful at this. They relied primarily on the banks’ research departments for economic analysis. Iceland’s National Economic Institute had built a reputation for independent thinking and, at times, published unwelcome reports, warning that the economy’s management was going haywire. Oddsson abolished it in 2002. Statistics Iceland, the public data agency, was notably cowed into suppressing unfavourable information. And the University of Iceland bowed to pressures to make its Economic and Social Research centres self-funding–that is, to rely on finding buyers for commissioned research–with the convenient result that they no longer published big-picture reports with a critical edge.

Even Parliament’s recommendation last week to indict Geir Haarde is a letdown for those demanding real accountability: the parliament voted to charge Haarde, but not three others facing similar charges. The former ministers who prescribed the policies of the bubble economy, i.e. David Oddsson and his then partner in a coalition government, face no charges whatsoever because of a 3 year statute of limitations. Meanwhile the current leadership is unable to avoid one thing: popular outrage – misleadingly directed at it rather than at the previous leaders responsible. The Guardian reported that politicians had to flee 2,000 angry protestors at the recent Parliament opening. Polls show that “trust in parliament” is running at about 10%. One can hope that those responsible for Iceland’s implosion will face more consequences than hurled eggs, but Geir Haarde, for one, is undaunted at the prospect of being the first world leader indicted for economic mismanagement. He told Bloomberg News two weeks ago that he will be “completely vindicated”, and called the charges “absurd.”

Punting the Pundits

Punting the Punditsis an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Dahlia Lithwick: Privacy Rights Inc.  

Your right to personal privacy is shrinking even as Corporate America’s is growing.

Look. Nation. You can go ahead and anthropomorphize big corporations all you want. Pretend that AT&T has delicate feelings and that Wal-Mart has a just-barely-manageable phobia of spiders. But before we extend each and every protection granted in the Bill of Rights to the good folks at ExxonMobil, I have one small suggestion: Might we contemplate what’s happened to our own individual privacy in this country in recent years? That the government should have more and more access to our personal information, while we have less and less access to corporate information defies all logic. It’s one thing to ask us to give up personal liberty for greater safety or security. It’s another matter entirely to slowly take away privacy and dignity from living, breathing humans, while giving more and more of it to faceless interest groups and corporations.

Paul Krugman: The Mortgage Morass

The story so far: An epic housing bust and sustained high unemployment have led to an epidemic of default, with millions of homeowners falling behind on mortgage payments. So servicers – the companies that collect payments on behalf of mortgage owners – have been foreclosing on many mortgages, seizing many homes.

But do they actually have the right to seize these homes? Horror stories have been proliferating, like the case of the Florida man whose home was taken even though he had no mortgage. More significantly, certain players have been ignoring the law. Courts have been approving foreclosures without requiring that mortgage servicers produce appropriate documentation; instead, they have relied on affidavits asserting that the papers are in order. And these affidavits were often produced by “robo-signers,” or low-level employees who had no idea whether their assertions were true.

David Swanson: Rule of Law Is Alive and Well Outside the United States

The World Justice Project on Thursday published a “Rule of Law Index,” and there’s no easy way to say this. Let me put it this way: as when rankings on education, infant mortality, work hours, lifespan, retirement security, health, environmental impact, incarceration rates, violence, concentration of wealth, and other measures of quality of life come out, it is time once again for we Americans to shout “We’re Number One!” more loudly than ever. Because, of course, we’re not. . . .

On This Day in History: October 15

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

October 15 is the 288th day of the year (289th in leap years) in the Gregorian calendar. There are 77 days remaining until the end of the year.

On this day in 1815, Napoleon Bonaparte begins his final exile on the Island of St. Helene.

Napoleon Bonaparte (15 August 1769 – 5 May 1821) was a military and political leader of France and Emperor of the French as Napoleon I, whose actions shaped European politics in the early 19th century.

Napoleon was born in Corsica to parents of minor noble Italian ancestry and trained as an artillery officer in mainland France. Bonaparte rose to prominence under the French First Republic and led successful campaigns against the First and Second Coalitions arrayed against France. In 1799, he staged a coup d’etat and installed himself as First Consul; five years later the French Senate proclaimed him emperor. In the first decade of the 19th century, the French Empire under Napoleon engaged in a series of conflicts-the Napoleonic Wars-involving every major European power. After a streak of victories, France secured a dominant position in continental Europe, and Napoleon maintained the French sphere of influence through the formation of extensive alliances and the appointment of friends and family members to rule other European countries as French client states.

The French invasion of Russia in 1812 marked a turning point in Napoleon’s fortunes. His Grande Armee was badly damaged in the campaign and never fully recovered. In 1813, the Sixth Coalition defeated his forces at Leipzig; the following year the Coalition invaded France, forced Napoleon to abdicate and exiled him to the island of Elba. Less than a year later, he escaped Elba and returned to power, but was defeated at the Battle of Waterloo in June 1815. Napoleon spent the last six years of his life in confinement by the British on the island of Saint Helena. An autopsy concluded he died of stomach cancer, though Sten Forshufvud and other scientists have since conjectured he was poisoned with arsenic.

Napoleon’s campaigns are studied at military academies the world over. While considered a tyrant by his opponents, he is also remembered for the establishment of the Napoleonic code, which laid the administrative and judicial foundations for much of Western Europe.

Morning Shinbun Friday October 15

Friday’s Headlines:

How US Nightclubs Revolutionized West German Music


In many congressional swing districts, seniority is falling by wayside

Countrywide’s Angelo R. Mozilo in talks to settle SEC charges, sources say


Portugal’s budget to trigger crisis for government

Budapest Experiences A New Wave of Hate

Middle East

Robert Fisk: Israel comes face to face with the man who would wipe it off the map

Arab League still struggles for credibility


The ‘untouchable’ Indians with an unenviable job

Kim’s heir linked to plot against eldest son


UN could police parts of north-south Sudan border

More white South Africans struggle in post-apartheid economy

Latin America

‘Blood pact’ suggests what went on undergound will stay there

Tea Party set to win enough races for wide influence

Nominees have performed better than expected in many cases


Enough Tea Party-supported candidates are running strongly in competitive and Republican-leaning Congressional races that the movement stands a good chance of establishing a sizeable caucus to push its agenda in the House and the Senate, according to a New York Times analysis.

With a little more than two weeks till Election Day, 33 Tea Party-backed candidates are in tossup races or running in House districts that are solidly or leaning Republican, and 8 stand a good or better chance of winning Senate seats.

American Family Association 20101015. An Association of Bigots

I have often posted at the Big Orange about how evil the American Family Association is.  They are pretty much summed up as a bunch of bigots, and I had electronic mail with their current president, Tim Wildmon, many years ago that just solidified that thought.

He is a bigot, and a very hate filled person as well.  He called me everything but a nice person years ago.  Good Christian, he is.

Prime Time

Well, the Islanders lost last night.  Go figure.  Broadcast- mostly premiers.  A good night to read a book.


Dave hosts Wanda Sykes, Rick Fox, and Pete Yorn.  Jon has David Rakoff, Stephen Bill Bryson.  No Alton.

If you don’t shut those windows you’ll be fired.

In that case I shall require four weeks’ wages in lieu of notice.

Get out of my sight, woman!

With pleasure!

Cod’s as good as lobster any day, and much cheaper.

Well, that depends on whether or not one has a palate unsullied by cheap opiates.

If you mean what I think you mean, I’ll have you know this cheroot cost two shillings!

Yes. Quite.

Zap2it TV Listings, Yahoo TV Listings

Evening Edition

Evening Edition is an Open Thread

From Yahoo News Top Stories

1 French strike sparks street clashes, fuel warnings

by Roland Lloyd-Parry, AFP

37 mins ago

PARIS (AFP) – French youths clashed with police Thursday and oil refinery shutdowns prompted warnings of fuel shortages as unions called a fifth national strike against President Nicolas Sarkozy’s pensions reform.

Pupils blockaded their schools and some near Paris threw stones at police who responded with non-lethal riot guns as officials warned protests against raising the retirement age from 60 to 62 could get out of hand.

With eight of France’s 12 refineries shutting down operations, the petrol industry association urged the government to release emergency fuel stocks and called for protestors blocking fuel depots to be removed.