Iceland was right all the way

KindOfIrish

"Iceland has won its legal battle to avoid paying back the Dutch and British governments for money paid to savers who lost out when internet bank Icesave went bankrupt."
http://www.dutchnews.nl/news/archives/2013/01/iceland_wins_dutch_compensatio.php

and we will be paying our bank's debt for many years to come.:(

RedXIV

I know Sweet FA about global economics....but ya gotta love how Iceland has handled all this

Chips Lovell

Interesting little detail in the FT:

The Icelandic public twice rejected those demands in referendums, in part due to popular anger at how the UK in particular had behaved by using antiterrorist legislation in the dispute.

But Iceland has still been paying the governments back. Officials in Reykjavik said Iceland has paid IKr585bn ($4.55bn) of the IKr1,166bn claims from Icesave, equivalent to more than 90 per cent of the minimum deposit guarantee the two governments were obliged to pay.

srsly78

RedXIV wrote: »

I know Sweet FA about global economics....but ya gotta love how Iceland has handled all this

By losing all their money? You know all their savings were wiped out right? Kroner are worth 1/4 of their value now.

Richard tea

srsly78 wrote: »

By losing all their money? You know all their savings were wiped out right? Kroner are worth 1/4 of their value now.

Good. Fresh start for them.

srsly78

Many people would probably disagree about that.

Godge

RedXIV wrote: »

I know Sweet FA about global economics....but ya gotta love how Iceland has handled all this

Agree with the first part of your post.

http://www.bbc.co.uk/news/world-europe-20936685

But if you read the article in full and do a little bit more research you will find that ordinary people in Iceland have suffered a lot more than ordinary people in Ireland. We don't have the situation where people continued to pay their mortgage in full but the amount due went up because of currency changes!!

100 new taxes!! We can't even get one property tax in place (with the USC that would make two new taxes).

Manach

I believe in Ireland, we call the new taxes other names : ie charges, inspection fees, licences, levies etc.

Richard tea

Manach wrote: »

I believe in Ireland, we call the new taxes other names : ie charges, inspection fees, licences, levies etc.

I thought no other gov could sink lower that FF but FG have some neck. They have doubled the cost of a Death cert, Birth cert & documentation for weddings. It was discussed on Joe Duffy today.

Who will suffer the longest? The Irish or Icelandic people?

Godge

Manach wrote: »

I believe in Ireland, we call the new taxes other names : ie charges, inspection fees, licences, levies etc.

Ok, can you list 50 of these new charges, inspection fees, licences and levies introduced since 2008.

To start you off.....

(1)USC
(2) Household charge
(3) Property tax (we will count this one for you even though it replaced the household charge)
(4) Pension levy on public servants
(5) Levy on private sector pension funds
(6) Insurance levy to pay for failure of private sector company Quinn Insurance
(7) Water charges (not introduced yet but again we will give you that one)
(8) Charge on non-principal private residences known Second homes charge also subsumed into property tax
(9) Prescription charge for medical card holders
(10) Car park levy (introduced but never levied)
(11) Air travel tax (was this later repealed?)
(12) Income levy (nearly forgot this - since subsumed into USC)
(13) Carbon Tax
(14) really struggling now, got to 13, but this included 3-4 which have since been repealed or subsumed into other named ones.

blackdog2

Godge wrote: »

Agree with the first part of your post.

http://www.bbc.co.uk/news/world-europe-20936685

But if you read the article in full and do a little bit more research you will find that ordinary people in Iceland have suffered a lot more than ordinary people in Ireland. We don't have the situation where people continued to pay their mortgage in full but the amount due went up because of currency changes!!

100 new taxes!! We can't even get one property tax in place (with the USC that would make two new taxes).

The sustainability, and rebalancing of their economy seems quite desirable, from your link :

"Iceland's president, Mr Grimsson, also says Britain could learn from the Icelandic experience by cutting its dependence on banking and finance, which draws talent away from more productive parts of the economy.

But Iceland is not just blessed with an abundance of human talent; it also has a ready supply of cheap clean energy. Ninety-nine percent of the country's energy needs are supplied from hydroelectric sources or hot thermal springs. There are even plans to export this renewable power via enormous cables under the sea to Denmark or even Britain."

Probably not a particularly popular view in Tory Britain, but the rest of the article points to greater things, for short to medium-term pain. Not equatable to here, still not a solution in sight to our, Britain and Europe's problems.

Richard tea

Richard tea wrote: »

I thought no other gov could sink lower that FF but FG have some neck. They have doubled the cost of a Death cert, Birth cert & documentation for weddings. It was discussed on Joe Duffy today.

Who will suffer the longest? The Irish or Icelandic people?

It costs €20 euro. And you go on to mention suffering? Are you having a giraffe, mate?

dvpower

Richard tea wrote: »

I thought no other gov could sink lower that FF but FG have some neck. They have doubled the cost of a Death cert, Birth cert & documentation for weddings. It was discussed on Joe Duffy today.

This is why we can't have a more radical solution in Ireland - people actually think that increasing the cost of Birth, Marriage and Death certs is the lowest anyone could possibly sink.

Richard tea

Rojomcdojo wrote: »

It costs €20 euro. And you go on to mention suffering? Are you having a giraffe, mate?

You miss the point along with DVpower. Its the slyness of these new increases thats a low point. Why not be honest and inform the people of the increases instead of people turning up to pay for a cert to find its doubled in price.

Godge, what are the 100 new taxes introduced in iceland? Whats the total amount of tax taken for these 100 new taxes compared to the 14 increases you pointed out in Ireland ( so far ) ?

To sum up my point. The 100 new Icelandic taxes could total an extra 1 million in tax compared to 20 new taxes,levies,charges introduced in Ireland which could total 5 million.

[Jackass]

*face palm*

I WANT THIS COUNTRY FIXED AND TO GO BACK TO THE WAY IT WAS!! FIX IT STOOPID GOVERNMENT!

Regarding Iceland, their monetary & currency controls got them out of their crisis, whatever about servicing the bank debt, but as super-pro-Europe as I am (I do believe in the project long term), it's hard to argue with the concensus that we'd be better off with our own monetary control and no longer being dictated to BY the others, rather than giving assurances TO the others.

Iceland's crisis virtually automatically corrected its self (a good example of the automatic stabalisation mechanism in Economics), by their currency value falling so low that their exports became superb value and they were an ideal location for foreign investment due to their relative cheap labour.

srsly78

So all we have to do is wipe out all wealth in this country and then our economy will boom, good thinking batman.

caff

You do know due to the capital controls in place in Iceland they have created yet another property bubble?

http://www.bloomberg.com/news/2012-05-29/iceland-property-bubble-grows-with-currency-controls-mortgages.html

And though people laud Iceland for jailing bankers, the ones prosecuted are merely the small fries.

Good article addressing what happened in Iceland
http://studiotendra.com/2012/12/29/what-is-actually-going-on-in-iceland/

Villa05

Godge wrote: »

Agree with the first part of your post.

http://www.bbc.co.uk/news/world-europe-20936685

But if you read the article in full and do a little bit more research you will find that ordinary people in Iceland have suffered a lot more than ordinary people in Ireland. We don't have the situation where people continued to pay their mortgage in full but the amount due went up because of currency changes!!

100 new taxes!! We can't even get one property tax in place (with the USC that would make two new taxes).

Godge, you may want to do some research also. Icelandic mortgages were written down to 110% of the value of the house, therefore nobody in Iceland is suffering to the same extent as the negative equity generation we created.

“You could safely say that Iceland holds the world record in household debt relief,” said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. “Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.”
...........................
Iceland’s $13 billion economy, which shrank 6.7 percent in 2009, grew 2.9 percent last year and will expand 2.4 percent this year and next, the Paris-based OECD estimates. The euro area will grow 0.2 percent this year and the OECD area will expand 1.6 percent, according to November estimates.
............................
Housing, measured as a subcomponent in the consumer price index, is now only about 3 percent below values in September 2008, just before the collapse. Fitch Ratings last week raised Iceland to investment grade, with a stable outlook, and said the island’s “unorthodox crisis policy response has succeeded.”
.............................
Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.
Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch.
..............................

http://www.bloomberg.com/news/2012-02-20/icelandic-anger-brings-record-debt-relief-in-best-crisis-recovery-story.html

In summary Icelandic Government did what was needed for its people. The Irish Government did what was needed to protect themselves and their cronies, many of whom were responsible for the mess.

As for who suffered most, Read the bloomberg article and see for yourself I would rather suffer more than pass this huge burden on to my children and their children. I feel so ashamed!!!

[Jackass]

srsly78 wrote: »

So all we have to do is wipe out all wealth in this country and then our economy will boom, good thinking batman.

If that's in response to my post, the wiping out of capital has already occured, the same net effects that happened in response by Iceland haven't occured here though, due to no monetary control, so we stay in permanent recession, they bounced back extremely quickly out of recession, robin.

Godge

Villa05 wrote: »

Godge, you may want to do some research also. Icelandic mortgages were written down to 110% of the value of the house, therefore nobody in Iceland is suffering to the same extent as the negative equity generation we created.


http://www.bloomberg.com/news/2012-02-20/icelandic-anger-brings-record-debt-relief-in-best-crisis-recovery-story.html

In summary Icelandic Government did what was needed for its people. The Irish Government did what was needed to protect themselves and their cronies, many of whom were responsible for the mess.

As for who suffered most, Read the bloomberg article and see for yourself I would rather suffer more than pass this huge burden on to my children and their children. I feel so ashamed!!!

On the 20th of February last year, Bloomberg were praising the recovery in Iceland according to your article. But what did Iceland set off with its debt forgiveness arrangements? The whole bubble all over again!

caff wrote: »

You do know due to the capital controls in place in Iceland they have created yet another property bubble?

http://www.bloomberg.com/news/2012-05-29/iceland-property-bubble-grows-with-currency-controls-mortgages.html

And though people laud Iceland for jailing bankers, the ones prosecuted are merely the small fries.

Good article addressing what happened in Iceland
http://studiotendra.com/2012/12/29/what-is-actually-going-on-in-iceland/

By the 30th of May last year, Bloomberg are warning of a property bubble in Iceland. From reading both articles, there is an element of "pulling up the drawbridge and retreating inside the castle" about the solution and therefore ignoring what is happening around the world. We will see what happens when capital controls are eased. The Central Bank there needs to keep interest rates at 5.5% even with capital controls. Once they are lifted, you will see interest rates go up, money flow out, property prices collapse and ordinary people (who didn't learn from the first disaster) swamped again. It will make an interesting case-study especially for countries like China with capital controls and domestic property bubbles to learn from.

srsly78

[Jackass] wrote: »

If that's in response to my post, the wiping out of capital has already occured, the same net effects that happened in response by Iceland haven't occured here though, due to no monetary control, so we stay in permanent recession, they bounced back extremely quickly out of recession, robin.

Many Irish people and companies have savings. Our banks got wiped out, but this does not represent ALL of our capital.

[Jackass]

devauling of currency has no effect domestically, it just makes imports more expensive, but makes exports vastly more attractive, as does the cost of labour to foreign investors - basically, exactly what happened in Icelands recovery - It may have inflationary effects, but that can be controlled through further monetary control in adjusting the interest rates.

But you don't need your banks to collapse to devalue your currency, you just need your own monetary control and your national central bank can do it by issuing more currency of which the Government can use domestically.

Sand

Anyone remember the "Iceland! Iceland!" slide from Brian Lenihan's powerpoint presentation a few years ago? For all the economic and political differences between Ireland and Iceland the key difference between the Irish and Icelandic response was that Iceland always put its own national interest first. That's not easy to do - the Icelandic people had to rally twice to vote down an attempt to enslave them with others peoples debt in the face of their own governments surrender.

Ireland on the other hand never put its own interest first. The strategy was always for Ireland to accept any awful deal going, not to annoy anyone or cause a fuss and hope something would turn up.

I see people are trying to claim that the Irish people are better off than the Icelandic people on average because savings were lost in Iceland. This assumes the maintenance of Irish savings was without cost. And it misses that that in Ireland, the pain was not spread evenly. If you are younger, if you worked in the private sector and if you didn't have significant savings then you absorbed the vast majority of the adjustment, are more likely to be laden down with an unsustainable mortgage and may even have been forced to emigrate. If you were older, if you work in the public sector and had a significant pension or savings then you absorbed much less of the adjustment, less likely to have any significant mortgage and you almost certainly will not have to emigrate.

Basically the people without significant savings (those bad people living off their credit card, borrowing, etc) in Ireland have massively subsidized and bailed out the people in Ireland with significant savings in Irish banks because the government made the choice to prioritize them over other Irish people. So when you say Irish people are better off then the Icelandic people because they didn't lose their savings - *Some* Irish people are better off because of that decision. *Some* Irish people are worse off because of that decision.

srsly78

Devaluing of currency has no effect domestically? Well if you are Icelandic you had better REALLY like fish, everything else is imported! If it happened to us how much do you think it would cost to fill your tank with petrol?

@sand: I do not understand how you say those with savings have been subsidized. So, because some people worked hard and made prudent financial decisions - they are somehow to blame? Those who have come by their savings in the last 5 years or so would feel especially aggrieved if you were to suggest this.

Sand

@srsly78

@sand: I do not understand how you say those with savings have been subsidized. So, because some people worked hard and made prudent financial decisions - they are somehow to blame?

Where did I say they were to blame? I said they were subsidized by those who did not have significant savings in Irish banks. Those include those poorer than them, more indebted than them, younger than them and smarter than them (i.e. the people who put their significant savings in a non-Irish bank). They were subsidized to the disadvantage of everyone else.

With the re-introduction of bank charges its worth noting that the people with debts (credit cards, mortgages, personal loans...the people you blame I presume) were subsidizing the those savers even during the 2002-2006 period.

That's not a value judgement. Just an observation which I think places your assumption that the savings being maintained means the Irish are doing better than the Icelandics in its proper context. The reality is that only the Irish people with significant savings are doing better - the rich and the well off. Everyone else is doing worse.

srsly78

I was talking about Irish people saving in Irish banks - and the impact of an Irish default+devaluation scenario on them.

Ok I am sorry, I have read your post several times and I cannot make any sense of it.

[Jackass]

srsly78 wrote: »

Devaluing of currency has no effect domestically? Well if you are Icelandic you had better REALLY like fish, everything else is imported! If it happened to us how much do you think it would cost to fill your tank with petrol?

Again, we're talking in the context of Ireland. We are an exporting nation. Particularly in areas such as agriculture. Also, with monetary controls (getting realllllll tired of explaining this man) it's designed for a quick turnaround, as with Iceland (in comparrison to our plan of action) and not to the extent of an oil crisis, but even with a largely export led recovery and increased FDI, Government can subsidise essentials if it comes to it, as you're not targetting Revenue from areas such as fuel in recovery, if anything, have it subsidised rather than taxed.

srsly78

Capital controls (which is what you mean by monetary controls I assume) are not allowed in the free market area. How would we export if we were kicked out? Do you really expect the punt-nua would become some super currency?

kippy

This was posted somewhere else on this forum recently (or I spotted it elsewhere) but it's worth a read for those of you that think things are hunky dory in Iceland.
http://studiotendra.com/2012/12/29/what-is-actually-going-on-in-iceland/

Even with those misconceptions straightened you only have to look at the major difference between us and Iceland to know that the two situations are as far removed from each other as chalk and cheese.
(Not that I agree with everything done here since 2007 to address the crisis mind)

srsly78

Just to go back over something I said in last post...

I THOUGHT that capital controls were a big nono in the European free market area. Iceland still has capital controls in place, how does this affect them? Are they still part of the area?

Or maybe it's the eurozone that forbids capital controls, or the eu? Would Ireland be removed if it introduced controls?

(for anyone wondering: capital controls in this context means the government would put laws into place stopping money leaving/entering the country, probably limiting it to small amounts - very popular in south america)

kippy

srsly78 wrote: »

Just to go back over something I said in last post...

I THOUGHT that capital controls were a big nono in the European free market area. Iceland still has capital controls in place, how does this affect them? Are they still part of the area?

Or maybe it's the eurozone that forbids capital controls, or the eu? Would Ireland be removed if it introduced controls?

(for anyone wondering: capital controls in this context means the government would put laws into place stopping money leaving/entering the country, probably limiting it to small amounts - very popular in south america)

I would suspect it is linked to the Eurozone (currency) as opposed to the geographical area.

Much easier to enforce when you control your own currency.

srsly78

I am pretty sure it affects the UK and others as well. Am trying to find some kind of source.

edit: http://en.wikipedia.org/wiki/Four_Freedoms_(European_Union)

Freedom of movement of capital would appear to be a big deal for the EU. I suppose there are many eu laws that cover this - no way am I reading through eu legislation tho

So what happens if a member imposes capital controls?

karlth

I live in Iceland so if you have any specific questions, fire away.

srsly78

Has the price of a Big Mac changed over the last few years?

kippy

karlth wrote: »

I live in Iceland so if you have any specific questions, fire away.

How true is the article I posted in post 29?

When was the last time you left the country? (Iceland)

Godge

[Jackass] wrote: »

devauling of currency has no effect domestically, it just makes imports more expensive, but makes exports vastly more attractive, as does the cost of labour to foreign investors - basically, exactly what happened in Icelands recovery - It may have inflationary effects, but that can be controlled through further monetary control in adjusting the interest rates.

But you don't need your banks to collapse to devalue your currency, you just need your own monetary control and your national central bank can do it by issuing more currency of which the Government can use domestically.

Of course, devaluing of currency has no effect domestically, that is why the great devaluers of Argentina and Mexico are the richest countries in the world:rolleyes:.

rock chic

KindOfIrish wrote: »

"Iceland has won its legal battle to avoid paying back the Dutch and British governments for money paid to savers who lost out when internet bank Icesave went bankrupt."
http://www.dutchnews.nl/news/archives/2013/01/iceland_wins_dutch_compensatio.php

and we will be paying our bank's debt for many years to come.:(

and not before the government make us suffer 1st they have already started stopping disabled peoles allowances

karlth

srsly78 wrote: »

Has the price of a Big Mac changed over the last few years?

McDonalds left 5-6 years ago, as did Burger King. Not related to the banking crisis but rather the small size of the market. We have several other international chains, KFC, Subway, etc, but most of the fast food chains are local. For comparison a 12 inch Subway melt costs 6.5 euros.

karlth

kippy wrote: »

How true is the article I posted in post 29?

I read through it briefly and I would classify it as "politically biased". Some parts are correct some less so.

This is what happened in a nutshell:

Iceland didn't guarantee the banks' debts when the banking crisis hit and prioritized deposits above all other debts. This meant foreign and domestic investors lost huge sums. (stuff the investors advice supplied by JP. Morgan)
New banks were formed with all local deposits, and domestic assets to cover them. Investors (foreign mostly inc. vulture funds) bought the fallen banks assets and the new banks from the government. Debate taking place about what to do with those investors.
Inflation is around 5-6%, unemployment as well. Currency has fallen by around 50% (from an artificial high) and currency controls are in effect. Many home and car owners got debt relief(by a court decision due to illegally indexed loans). Those who had normal domestic loans either got their loans capped at 110%, went through a special government debt handling programs or just continued paying without any special assistance.

There is unquestionably seething anger directed at financiers and many politicians. Everyone has an opinion and is unafraid to voice it.

Support for joining the EU is only around 30% and although most of us miss a strong Krona (our currency) I think most understand that it must suffer during the cleanup (like a soggy mop).

When was the last time you left the country? (Iceland)

Last september to the UK. Vacationing with a friend.

Cavehill Red

caff wrote: »

Good article addressing what happened in Iceland
http://studiotendra.com/2012/12/29/what-is-actually-going-on-in-iceland/

No, it isn't. As discussed elsewhere on boards, it's the ill-informed rantings of a graphic designer.
For actual economic analysis of the situation, there are a number of good books, but if blogs are your thing, as least consult an expert.

Scofflaw

kippy wrote: »

Originally Posted by srsly78

Just to go back over something I said in last post...

I THOUGHT that capital controls were a big nono in the European free market area. Iceland still has capital controls in place, how does this affect them? Are they still part of the area?

Or maybe it's the eurozone that forbids capital controls, or the eu? Would Ireland be removed if it introduced controls?

(for anyone wondering: capital controls in this context means the government would put laws into place stopping money leaving/entering the country, probably limiting it to small amounts - very popular in south america)

I would suspect it is linked to the Eurozone (currency) as opposed to the geographical area.

Much easier to enforce when you control your own currency.

"Free movement of capital" is a principle of the single market, and is therefore applicable to the EU, EEA, and EFTA. It's a right applicable to citizens and legal entities within the single market, so if a country institutes capital controls, companies and individuals can sue their state.

However, like all rights, it's not absolute. The EFTA Court upheld Iceland's capital controls on the basis that:

...both EU Member States and the EFTA states are permitted to take action to protect themselves if they are experiencing balance of payment difficulties, or if there is a serious risk that such difficulties will occur, irrespective of whether the difficulties are a result of overall mismatches in the balance of payments, or whether they stem from the currency the country concerned has as its disposal.

That's an EFTA/EEA judgement, but the CJEU has similar exceptions - capital controls can be reinstated where it is required, as long as they are proportional to the problem they're supposed to be a remedy to.

cordially,
Scofflaw

Scofflaw

Cavehill Red wrote: »

No, it isn't. As discussed elsewhere on boards, it's the ill-informed rantings of a graphic designer.
For actual economic analysis of the situation, there are a number of good books, but if blogs are your thing, as least consult an expert.

To be fair, that should be "as Cavehill Red has asserted in another thread". His dismissal of it is purely his own opinion, as is his assertion of the primacy of his own preferred source.

cordially,
Scofflaw

Cavehill Red

Scofflaw wrote: »

To be fair, that should be "as Cavehill Red has asserted in another thread". His dismissal of it is purely his own opinion, as is his assertion of the primacy of his own preferred source.

cordially,
Scofflaw

To be additionally fair, the only person arguing that the graphic designer's blog is a credible and respectable source of information on the Icelandic crisis is Scofflaw.

Scofflaw

Cavehill Red wrote: »

To be additionally fair, the only person arguing that the graphic designer's blog is a credible and respectable source of information on the Icelandic crisis is Scofflaw.

I'm actually arguing that Iceland generates multiple points of view, and that taking any one of them as definitive is dangerous. Karlth here is another point of view, and I wouldn't dismiss what he says because of either the Tendra blog or Icelog, or vice versa. Points of view are just that - points.

cordially,
Scofflaw

Cavehill Red

Scofflaw wrote: »

I'm actually arguing that Iceland generates multiple points of view, and that taking any one of them as definitive is dangerous. Karlth here is another point of view, and I wouldn't dismiss what he says because of either the Tendra blog or Icelog, or vice versa. Points of view are just that - points.

cordially,
Scofflaw

To an extent I agree. Where I disagree is with your ongoing insistence on equating professional analysis with an amateur's ranting, simply because the professional's analysis doesn't tend to support your own. But there's no point importing this dispute and having it proliferate across multiple threads. I'll leave it up to others to decide whether they'd prefer to credit a graphic designer's one-off rant or four years of professional economic analysis from someone who's job it is to provide it.

AlekSmart

Cavehill Red wrote: »

To an extent I agree. Where I disagree is with your ongoing insistence on equating professional analysis with an amateur's ranting, simply because the professional's analysis doesn't tend to support your own. But there's no point importing this dispute and having it proliferate across multiple threads. I'll leave it up to others to decide whether they'd prefer to credit a graphic designer's one-off rant or four years of professional economic analysis from someone who's job it is to provide it.

One aspect of our own Economic Collapse is how the mighty,in this case the Large Proffessional Financial Banking Institutions have fallen.

The real issue these entities,which include virtually all Financial Sector "professionals", now face is the destruction of their credibility.....most ordinaries,and this includes graphic-designers,are now HIGHLY sceptical of anything a Financial "Professional" sez.....:)

Cavehill Red

One of the big distinctions I note between Ireland and Iceland is the quality of journalistic coverage.
Ours effectively cheerled the boomier economy of Bertie right off the cliff with only the occasional dissenting voice from people like Morgan Kelly or McWilliams, who were largely ignored when it might have mattered. The issue of media income from property sections has been highlighted before, but it goes deeper than that, to the quality of our media discourse.
In Iceland, the media has been much more analytical and critical, before, during and after the crisis.
If our bankers, financial experts and economics reporters are no longer considered credible, that is only a reflection of their own performances.

Scofflaw

Cavehill Red wrote: »

One of the big distinctions I note between Ireland and Iceland is the quality of journalistic coverage.
Ours effectively cheerled the boomier economy of Bertie right off the cliff with only the occasional dissenting voice from people like Morgan Kelly or McWilliams, who were largely ignored when it might have mattered. The issue of media income from property sections has been highlighted before, but it goes deeper than that, to the quality of our media discourse.
In Iceland, the media has been much more analytical and critical, before, during and after the crisis.
If our bankers, financial experts and economics reporters are no longer considered credible, that is only a reflection of their own performances.

While the efforts of Irish media have been particularly poor, the coverage by external media both during the boom and during the crisis hasn't been particularly good either - the repetition of myths, the use of inapplicable statistics and narratives, and the application of agendas has been extremely common everywhere.

cordially,
Scofflaw

Cavehill Red

That's certainly true, but where foreign media was inexcusably lax, ours was utterly, one might even say unethically, abject.

Scofflaw

Cavehill Red wrote: »

That's certainly true, but where foreign media was inexcusably lax, ours was utterly, one might even say unethically, abject.

I think that could be regarded as a question of their particular agenda or world view, though. While much of what I'm referring to is what we might call ordinary journalistic sins, I don't think it's unreasonable to say that most economic commentary world-wide is agenda-driven at worst, and viewed through a particular economic prism at best - and that as a general rule commentators tend to apply less stringent scepticism to sources that accord with their particular agenda or economic viewpoint.

The viewpoint of the Irish media was very much to go along for the ride, but whether in doing so they were any more than usually abject than other media I don't know. They certainly weren't alone in seeing us as a vibrant, massively successful economy - there were endless foreign media pieces on the "Irish miracle", and it may even be that the ration of cheerleading to warning was little different outside Ireland overall.

With respect to Iceland, it's possible, in the case of this judgement, to draw a very straightforward "Iceland was right, and we should have done what they did" conclusion, which rather ignores the fact that Iceland did what it did not because it was what it wanted to do, but because events overwhelmed it and it couldn't save its banks. Luckily, the cost of that failure fell heavily on foreign depositors, and it was possible to save domestic depositors in the main. Would it have worked out that way in Ireland?

Certainly we were unlucky in the exact size of our banks - the big Icelandic banks had a total balance sheet of about 10 times their GDP, and were too big to save - ours had a combined balance sheet about 3.5 times our GDP, and were just not quite too big to save, which effectively left us with the costliest possible bailout, and a debt trajectory which almost exactly plumbs the generally agreed maximum depth of misery.

cordially,
Scofflaw

Cavehill Red

Only the simplest of analysts (some Irish journalists and politicians currently among them) would argue that "we should have done what Iceland did" without accommodating the different circumstances of the two nations.
The value of commentators like Davidsdottir is that they unveil the myth and show that Iceland didn't do what such analysts think they did for starters, and secondly that what they did do has not had universally positive consequences. In other words, they correct the fairy tale narrative.
That said, it is just as preposterous a notion as the "we should have done what Iceland did(n't)" fairytale to swing to the opposite end of the pendulum and conclude that we have nothing to learn from Iceland's experience, either at the time of the crisis or indeed today.
I'm going to pass on your invitation to speculate on alternative histories, tempting though that is, and attempt to look at where we are now. Are there elements of the Icelandic experience we could usefully seek to emulate? Undoubtedly. Hard negotiation with bank creditors, a limited debt relief programme for those perma-submerged by unpayable mortgages, prosecution of errant bankers - all of these for starters seem eminently sensible options that remain open to us even today, when our options are much more limited than they were two or three years ago.