New Economics Newsletter Jan 26-2013
|1. Hordor Torfason is coming to New ZealandYes we know there is a permaculture hui in Taranaki 9-11 March and then there is WOMAD after it. But here is something really relevant to our policy we will support. Hordor Torfason is coming to New Zealand. Never heard of him? I hadn’t either. Well he led the protestors in Iceland and forced the whole government to resign. They nationalised the banks. They pushed the losses on to the bondholders not the public. Paul Krugman said “A funny thing happened on the way to economic Armageddon: Iceland’s very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.”Not only did Paul Krugman approved but the IMF changed its tune and said the “decision not to make taxpayers liable for bank losses was right”.http://www.washingtonsblog.com/2012/08/top-economists-iceland-did-it-right-everyone-else-is-doing-it-wrong.html. Krugman also says:
A funny thing happened on the way to economic Armageddon: Iceland’s very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.
The size of the problem was huge. Banks had defaulted on $85 billion. They arrested nine bankers and the former Prime Minister. 200 criminal charges were laid on the bankers, many of whom had fled the country.
Anyway here’s what you can do. Go to the Facebook page http://www.facebook.com/HordurTorfasonNzTour?fref=ts where you can link to all those sites, including to the pledgeme site where you can support his tour. He will be in Auckland on March 18 and 19, Wellington on March 20, Hawke’s Bay on March 21st, Golden Bay on March 23, Nelson on March 24th, Christchurch March 25-26 and Dunedin 27-28.Hordur Torfason, we understand, is primarily a democracy advocate. We are undertaking as a party to prepare two reports to brief him, one on democracy in NZ, and one on banking in NZ. If you would like to participate in preparing these briefs, or have ideas for people we must consult, please email Deirdre at email@example.com or phone 06 364 7779 or 021 728 852.Please also help in the publicity for this event through Facebook, twitter, google +1 etc. You can email lisa.er@the awareness party if you can think of an organisation which should be involved in publicity. Thanks!2.There is an Economics of Happiness conference between 15-17 March to be held in Byron Bay, 772 km north of Sydney. Cost $250 AUD plus accommodation. See http://www.theeconomicsofhappiness.org/3.If you would like to participate in developing policy you will need a special yammer email, which can be generated by Deck Hazen. Please email Deck.firstname.lastname@example.org to let him know you are interested. This is an excellent site.4.Permaculture in NZ Annual Hui in Taranaki March 9-11 2013
Taranaki is hosting this year’s national Permaculture Hui, and they picked the March date so you can stay on after the hui to take in some of the post hui events. Get together with people of like mind and find out what is happening in the permaculture community.
Accommodation includes cabins (limited), dormitories, marae-style, and BYO camping, with a maximum capacity of 250 people. There are other accommodation options nearby.
The theme of the Hui is “Upskilling“, with an emphasis on practical workshops. There will be a wide range of talks and activities, including a strong matauranga Maori presence. We aim to appeal to both the novice and the seasoned permaculture practitioner. There will also be lots of connecting with people, networking, and having fun!
Review of Boomerang, the Biggest Bust by Michael Lewis. Penguin Books 2011
I didn’t read Michael Lewis’s The Big Short, or Liar’s Poker about the dark art of investment banking, but this one is surely immensely readable. Lewis is a ‘financial catastrophe tourist’, travelling to Iceland, Greece and Germany interviewing key people in each country’s unique version of the Global Financial Crisis. He obtains interviews with significant players – Prime Ministers, ministers of finance, officials in treasury, hedge fund managers, traders, economists. In Greece he interviewed the head monks of an ancient monastery which had played a such key role in the indebting of Greece.
If you can ignore the fact that the writer is an economist who is still believes that banks just lend depositors’ money rather than create the credit (understandable when you realise how hopelessly captured universities are these days by the banks), you will enjoy this romp through the financial stupidity outlining how Greece, Ireland and Iceland got into such trouble.
I read the chapter on Iceland twice because there is a move to bring the leader of the protestors Hordur Torfason to New Zealand. Torfason will explain how in 2011 Iceland arrested nine bankers together with the Prime Minister who allowed the madness to take place on his watch by privatising the banks, freeing up trade and lowering taxes. Lewis says “From 2003 to 2007, while the value of the U.S. Stockmarket was doubling, the value of the Icelandic stock market multiplied nine times. Reykjavik real estate prices tripled.” When the bubble burst, Iceland’s 300,000 citizens found they bore some kind of responsibility for the $100 billion in banking losses. The debt was 850% of their GDP.
Lewis has a nice way of writing mixing the factual stuff with well painted personal profiles and vivid stories. Warning: If you want to read this book in a public place, people will think you are reading porn. The sensual cover features wine glasses and a prostrate woman in a tight gold dress.