Anyone following this?

Protests over economic crisis topple Icelandic government
By Barry Grey
28 January 2009

The Icelandic government fell on Monday, becoming the first regime to collapse as a direct result of the global economic crisis and resulting popular opposition. Months of street protests over the devastating social impact of the collapse of the country's currency and banking system reached a crescendo last week, when thousands of demonstrators rallying outside the parliament building pelted right-wing Independence Party Prime Minister Geir Haarde with eggs, paint and rolls of toilet paper, and police responded by firing tear gas, the first time tear gas was used against the public in Iceland since 1949.

On Friday, Haarde announced that he would step down as prime minister, citing a recent diagnosis of throat cancer, and agreed to hold early elections, which he set for May 9. His coalition government with the Social Democratic Alliance Party had been scheduled to remain in power until elections in 2011.

However, Haarde insisted that his government would not resign, arguing that political instability would compound the worsening economic crisis, which has seen prices and unemployment soar and the savings of many of the country's 320,000 residents vanish. A fresh anti-government demonstration on Saturday, involving some 5,000 people, led to a fracturing of the ruling coalition and forced Haarde to reverse course. On Monday he formally announced the resignation of the government.

On Tuesday, the president, Olafur Ragnar Grimsson, asked the Social Democratic Alliance to form a new interim government, to rule until elections are held in May, or perhaps even earlier. It is expected that the Social Democrats will form a minority government in coalition with the Left-Green Movement Party, which had supported the anti-government demonstrations.

There is little prospect that a new center-left government will stabilize the economy or silence the mounting opposition of workers, youth and middle-class people who are being impoverished by the collapse of the heavily indebted economy. The Social Democrats are fully implicated in the "free market" speculative policies that brought the country to economic ruin, and the Left-Green Movement demonstrated its loyalty to the state and the capitalist ruling elite by offering to join a national government when the country's three major banks collapsed last October.

There are also unresolved policy differences between the two parties. The Social Democrats favor closer ties to the European Union, including a possible application to join, and have endorsed the severe austerity terms of a bailout organized by the International Monetary Fund in October. The Left-Greens have called for renegotiation of the $2.1 billion IMF loan and opposed entry into the EU. However, the head of the Left-Greens, Steingrimur Sigfusson, indicated that he would be willing to alter these positions in return for entry into government.

The collapse of the right-wing Haarde government is the sharpest expression to date of the growing social and political turmoil across Europe arising from the economic crisis. Iceland was hit hardest by the financial meltdown that followed the collapse of the Wall Street investment bank Lehman Brothers last September because nearly two decades of "free market" policies and financial speculation that transformed the country into a center for "hot money" from international investors had left its banking system highly leveraged and entirely dependent on foreign capital.

However, similar conditions prevail in many European economies and recent weeks have seen a wave of sometimes violent protests fueled by the impact of the economic breakdown. Earlier this month Greek students and youth held daily mass protests for several weeks following the police killing of a 15-year-old youth. The Greek protests were sustained by anger over conditions of mass unemployment and poverty, especially among young people, that have been intensified by the economic crisis.

Mass demonstrations and riots have shaken a number of Eastern European countries that have been devastated by the financial crisis, including Latvia, Lithuania, the Czech Republic, Hungary and Bulgaria. Hungary and Ukraine have both resorted to IMF loans in an attempt to stave off national bankruptcy.

In all of these countries, the governments have imposed austerity policies in an attempt to slash expenditures so as to meet debt payments to international banks and creditors. In Latvia, for example, the government this month announced wage cuts and reductions in social spending combined with tax increases.

Other European countries have also seen mass protests. In Spain, which was heavily invested in the housing and credit bubbles that have now imploded, tens of thousands of workers and youth demonstrated last week in the city of Zaragoza to demand relief from soaring unemployment resulting from the collapse of the country's construction and retail industries.

Other European economies with outsized banking systems that are immediately at risk include Austria and Ireland. Even in Britain, whose currency has fallen by 30 percent in recent months, public speculation is growing over the prospect of state bankruptcy.

Simon Johnson, former chief economist at the IMF and senior fellow at the Peterson Institute for International Economics in Washington, commenting on the collapse of the Icelandic government, told the Washington Post, "I think it's going to spread. We're in a phase now we're beginning to see the political fallout."

A worried New York Times in its account of the Iceland crisis characterized the demonstrations that have broken out in Europe "in all cases" as being "anti-capitalist."

The global economic crisis has broadly discredited the ideology of the capitalist market, but perhaps nowhere more suddenly and explosively than in Iceland. The Independence Party has ruled since 1991, with David Oddsson, now the governor of the central bank, heading the government until 2004. Under Oddsson, the international operations of the major banks grew massively, building up liabilities many times the size of the country's economic output. The country's big banks borrowed $120 billion on international markets early this decade, six times the size of Iceland's gross domestic product. The country's foreign debt peaked at ten times GDP.

The speculative policies of the government and the banks fueled an economic boom that lifted Iceland's per capita GDP to one of the highest in the world. Iceland topped the most recent United Nations Human Development Index.

But when the credit crisis erupted, the banks could not make their payments and the central bank lacked the foreign currency to bail them out. The collapse of the banks sent the currency, the krona, into free fall. Since most consumer goods are imported, prices soared. Unemployment shot up. Government statistics show the jobless rate up by 45 percent in December from the previous month. The finance ministry forecasts a contraction of 9.6 percent in GDP for this year and 2010 and an unemployment rate of 8.6 percent next year, although this figure is widely believed to be an underestimation.

A recent survey indicated that 70 percent of Icelandic companies are technically bankrupt, raising the likelihood of an explosive growth of unemployment. The same survey put the rate of personal bankruptcies at 40 percent of the population. About a third of the population is believed to have lost all or part of their savings.

In a commentary published Monday, the Guardian characterized Iceland as "the world's biggest hed

ge fund" and noted:

"Iceland had relatively high interest rates, so investors borrowed heavily in Japanese yen and bought Icelandic bonds. Money flowed into Iceland... The financial crash has put paid to Iceland's get rich quick scheme—known as the yen carry trade—and left Iceland saddled with debts it has no hope of paying without impoverishing its people for decades to come."

http://www.wsws.org/articles/2009/jan2009/icel-j28.shtml

Anyone following this?



Yes, I have. The population is very small (less than half a million) so they are more of a harbinger rather than a direct example of what may happen in larger countries. The banking crisis caught them so heavily leveraged that there is literally no way back. Before all this, they had the highest standard of living in the world.

A Danish friend told me that the Icelanders are in quiet, but very serious, discussions with the Danish Government about rejoining Denmark. Iceland became independent from Denmark in 1918.

http://justinarium.files.wordpress.com/2007/11/iceland-landscape.jpg?w=462&h=348

Anyone following this?



Yes, I have. The population is very small (less than half a million) so they are more of a harbinger rather than a direct example of what may happen in larger countries. The banking crisis caught them so heavily leveraged that there is literally no way back. Before all this, they had the highest standard of living in the world.

A Danish friend told me that the Icelanders are in quiet, but very serious, discussions with the Danish Government about rejoining Denmark. Iceland became independent from Denmark in 1918.

http://justinarium.files.wordpress.com/2007/11/iceland-landscape.jpg?w=462&h=348


Any thoughts on this article and/or Michael Hudson's overall economic analysis?

Obama's New World Order
Michael Hudson's analysis of the financial crisis
Stephen Lendman

April 10, 2009

This article addresses Washington's financial coup d'etat in the context of discussing Michael Hudson's important, very lengthy and detailed April 5 Global Research.ca one titled: "The Financial War Against Iceland - Being defeated by debt is as deadly as outright military warfare." It reviews its key information in advance of Hudson's April 14 scheduled appearance on The Global Research News Hour to discuss.

What's true for Iceland holds everywhere, including the developed world, the idea being to enrich finance capitalism through state-sponsored debt bondage and neo-feudal impoverishment. The global economic crisis was no accident. It was long ago hatched, and has been brewing for years, gestating, percolating, then bubbling into the 2000 tech crash, a mere prelude for today's greater one spreading everywhere like a cancer but hitting the developing world and most indebted nations hardest.

Hudson: "Iceland is under attack - not militarily but financially."

Like many others, "It owes more than it can pay" and is bankrupt. It was planned that way, and the idea is to strip-mine the nation and its people of their resources, enterprises, assets, land, homes, jobs and futures through perpetual debt bondage. Bankers get enriched. Nations and people, however, are discarded like trash, with the IMF as enforcer, to be reinvigorated with an additional (G 20-pledged) $750 billion, quadrupling its resources to $1 trillion if fulfilled.

Wall Street and Western European bankers planned it and now ordered the government "to sell off the nation's public domain, its natural resources and public enterprises to pay (its) financial gambling debts." Also, raise permanent taxes at the worst possible time, then suck the maximum wealth from the country leaving behind an empty hulk and impoverished, desparate population. It's called dystopia Merriam-Webster defines as: "an imaginary place where people lead dehumanized and often fearful lives," the opposite of utopia under conditions of deprivation, poverty, disease, violence, oppression, and terror, much like in Orwell's Nineteen Eighty-Four.

Permanent debt bondage "is as deadly as outright military" defeat. Loss of livelihoods and assets leave people vulnerable to sickness, despair, and early deaths, much like what happened to post-Soviet Russia under Washington-imposed "shock therapy:"

-- 80% of farmers went bankrupt;

-- around 70,000 state factories closed;

-- unemployment became epidemic;

-- a permanent underclass was created;

-- poverty rose from two million in 1989 to 74 million by the mid-1990s, and in half the cases it was desperate;

-- alcoholism and drug abuse soared;

-- so did HIV/AIDS 20-fold;

-- suicides also and violent crime four-fold; and

-- the population declined by 700,000 a year; by 2007 it was 10% lower than in 1989 because of sharply reduced life expectancies.

Iceland, the developing world, and the West take note. This cancer is heading everywhere, courtesy of banker-imposed diktats, mainly from America and the UK. They insist Iceland "impoverish its citizens by paying debts in ways (they'd) never follow" even though the government has no way to do it.

No matter. "They are quite willing to take payment in the form of foreclosure on the nation's natural resources, land and housing, and a mortgage on the next few centuries of its future" - perpetual debt bondage no different than the spoils of war under permanent occupation.

However, in this case, debtors are convinced to pay voluntarily "to put creditor interests above the economy's prosperity (and) national interest." Their indebtedness comes at a huge cost - "chronic currency depreciation (and) domestic price inflation for many decades to come."

Contrast this to how developed countries, like America, handle debt - by inflating (not deflating) their way out to pay it off with cheap (reduced purchasing power) money because inflation erodes its value. It's simple - by printing money and running budget deficits the way Washington did after Nixon closed the gold window in August 1971, ended the 1944 Bretton Woods Agreement, and no longer let dollars be backed by gold or converted into it in international markets. A new monetary system creates money like confetti, and lets us spend and live beyond our means, then have developing and indebted nations pay the price.

In recent years, dollar weakness and price inflation "wiped out much of the US international debt." The Iceland model turns "this inflationary solution inside out....in violation of traditional credit practice." Instead of currency inflation, Iceland "inflate(d) its way into debt, not out of it, (by) indexing (it) to the rate of inflation," thus guaranteeing "a unique windfall for banks at the expense of wage earners and industrial profits." The result: destruction of its traditional way of life.

Iceland must "repudiate this debt bomb" to escape. It's indexed to inflation and "will never lose value." It's caught in a destructive whirlpool creating economic shrinkage, falling assets and wages in the face of perpetually burgeoning debt, the same global model needing to be exposed and renounced "now." Otherwise, economies will be hollowed out, "capital formation will plunge," people will be impoverished, and many won't survive.

Hudson's Background

His expertise comes from "having been an insider to imperial-style plundering....for forty years" - as an economist for Chase Manhattan Bank, Arthur Andersen, and the UN Institute for Training and Development (UNITAR). He's also taught economics since 1969, heads a Harvard-based economic and financial history group, is a Research Professor at the University of Missouri, and organized the first sovereign-debt fund in 1990 at Scudder, Stevens and Clark.

"All these jobs (except his current professorship) involved analyzing the limited ability of debtor countries to pay - how much could be extracted from them through foreign-currency loans and how much public infrastructure (could) be sold off (through) voluntary virtual foreclosure (under) creditor-dictated rules."

He advises countries not to borrow in foreign currencies, instead "monetize their own credit for domestic spending and investment." Iceland broke "the cardinal rule of international finance: Never borrow in a foreign currency for credit" that can freely be c

reated at home. "Governments can inflate their way out of domestic debt," not the foreign kind.

Post-Soviet economies did it the wrong way, now suffer, and recent riots highlight their problems. "Instead of helping them industrialize and become more efficient," Western bankers loaded them with debt and exploited them - not for manufacturing and infrastructure development, as loans against existing real estate and infrastructure, to suck as much wealth out quickly.

It produced "bubble economies built on debt-financed real estate and stock market inflation," illusory wealth "bubbles (that) always burst." The only sustainable financing of imports is through enough exports for a favorable balance of trade.

De-industrialization destroys economies by shrinking them, the result of plunging property valuations, rental income, and exchange rates. Foreign currency mortgage costs exceed property values producing defaults and losses for lenders.

It's hitting Sweden, Austria and leading creditor states like America and the UK. Real estate, stock market and employment are declining "in a straight line unprecedented even in the Great Depression." It's turned neoliberalism into a nightmare.

"Just as individuals can't live off a credit card forever, neither can nations. As any classical economist knows, societies that only manufacture debt are unsustainable." Eventually they collapse into bankruptcy just like a business or household. The old saying applies. Things that can't go on forever, won't.

No matter. Predator banks want to prolong the game as long as possible, grab all the wealth they can, force debtor nations to sell state enterprises at distress prices, then get new business by lending to investors who buy them on the cheap. Will it work? Only if targeted countries go along. In the case of Iceland, its very future is at stake.

Sound v. Imprudent Banking

For centuries, banks created credit responsibly - loaning money for sound investments to debtors able to repay with interest. No one imagined a world like today's with massive defaults occurring globally. In America, one-third of home mortgages are in "Negative Equity;" that is, "the mortgage exceeds the (property's) market price pledged as collateral."

US national debt tripled in one year, from $5 - $15 trillion, and according to some economists like John Williams, it's much higher under GAAP accounting - including unfunded liabilities around $65.5 trillion, an amount exceeding world GDP through FY 2008, meaning America is bankrupt. Williams also puts unemployment at 19.8% by reengineering it to include discouraged and involuntary part-time workers and excluding fictitious birth-death rate ratio inclusions.

Blunt Truths about the "Dismantling of Industrial Capitalism"

Instead of extending credit to construct and grow them, financial oligarchs turned indebted nations into "casinos (through) debt-leveraged gambles," redistributing wealth upward and creating "debt peonage for most citizens." Even in America, nearly half the population has no net worth, and the gulf between richest and the rest is unprecedented.

"This is the unfair system that the world's top creditors would export to Iceland - if they can convince its voters (and leaders) to accept neoliberal debt pyramiding as a way to get rich." It's not working throughout post-Soviet states that see it as the road to hell, if public riots are a gauge.

"Better alternatives (are) the only defense" as it's impossible for "astronomically indebted economies to 'work their way out of debt.' " Trying will "collapse the currency's exchange rate," divert huge amounts of revenue and property to creditors, and produce "a new kind of post-capitalist (unjust, unsustainable) non-production/consumpton economy" too gruesome to imagine or tolerate.

Iceland's financial crisis is the result of lawless predation, an "international (austerity demanding) Ponzi scheme" under rigged market rules imposing public and private "asset stripping" to pay debt. A simple scheme transfers wealth.

Economies and populations are trapped on a "debt treadmill from which there is no escape. (Lenders) pile on credit and let debts grow (through) the 'magic of compound interest,' knowing that loans cannot be repaid - except by asset sell-offs." They're strip-mined through unending debt service so the parasite keeps feeding on its food source. The idea is to get it all, leaving empty hulks behind, then on to the new victims. It's "euphemistically dubbed post-industrial wealth creation," the kind that's collapsing economies globally and destroying people. Obama is commander-in-chief of the process.

America as Lead Predator

It's a viciously ugly scheme that's "trapped other countries into a nightmarish system in which (they're practically forced) to recycle their excess balance-of-payment dollar inflows back to the US," mainly as loans to the Treasury.

"When foreign central banks receive dollars for their exports (or asset sales)," their choices are limited. "Congress won't let them buy important domestic companies or resources," or get paid with US gold reserves. The alternative is buy Treasuries and mortgage-backed securities like Fannie and Freddie debt.

Icelanders and other nations must remember that America is the world's largest debtor, and as Adam Smith explained in The Wealth of Nations - "no nation ever repaid its debt," and he never envisioned one large as America's. We grow it by issuing paper for real assets and services. Until other countries demand more than confetti, this "Madoff-Ponzi scheme" will persist - for tiny states like Iceland (population 319,000 as of January 2009) until nothing is left to hand over.

Today's road to riches isn't through capital investment. It's by "foreclos(ing) at pennies on the dollar and mak(ing) 'capital gains' by flipping property onto (central bank-inflated) world financial markets." In a word, socializing risks, privatizing profits, preying on the weak, and getting "a free lunch" at public expense.

It's a zero-sum game. One side's gain is another's loss, and when it matches America against Iceland, it's easy exerting pressure, but no certainty it'll prevail. As a sovereign state, Iceland can choose. More on that below.

Throughout the process, "financialized wealth is extractive, not productive....because loans, stocks and bonds are claims on wealth," not the kind produced by making things.

This is Iceland's dilemma. "Homeowners are paying tribute, not in taxes to (an occupier), in interest to (debt pyramid, international creditor) sponsors of "over-financialization," aiming to strip-mine the country of everything, the way it's worked in many developing states. "Yet many Icelanders are heading into this future voluntarily" with little understanding of the trap, propelling them toward debt peonage destitution under the guise of an IMF rescuer - like a spider to a fly.

It shouldn't happen and won't if countries refuse to be trapped and extricate themselves in time. Iceland is at a crossroads, still able to avoid what ruined Russia, other post-Soviet states, South Africa, and many other nations misjudging America and the IMF are saviors, not world class predators.

"Back to the Future" - A New Age of Neo-feudal Debt Bondage

Conventional banking works by extending credit in the form of interest-bearing loans and seizing collateral only in cases of default

. Central banks were created to finance governments and commercial ones to "expand trade, related infrastructure, mining and shipping," and develop other forms of business and industry.

More recently, "financial managers persuaded many countries to sell off public enterprises, like their water or energy supplies, mainly to pay debts or cut taxes" for the rich. It's turned debtor nations into "tollbooth economies in which basic services become a vehicle to extract greater and greater portions of national income and wealth for the benefit of the few."

It's the opposite of how classical economists define "free markets." Today, financial interests control them to extract labor and capital investment-produced surpluses - for themselves under the guise of "economic democracy." The result "pushed much of the Third World into poverty since the 1960s," and now the same cancer is heading everywhere.

Financial Warfare As Deadly As by Armies

Today's financial strategy is "multilateral (with) the IMF (and World Bank) act(ing) as enforcer(s) for global creditors to appropriate the income of real estate, national infrastructure and industry" by masquerading as a helping hand and seducing borrowers to believe it.

Here's how neo-feudal banking works. It doesn't create credit for manufacturing. Retained earnings and equity do it. It "create(s) credit primarily against (existing) collateral, and by so doing, "extract(s) money from the economy (and) undercuts industrial growth for "short-term speculative gains." This hegemony "took thousands of years to achieve," and it wasn't easy inducing nations into poverty through "debt pyramiding as good economic strategy." It's like prescribing gorging as a way to lose weight or a junk food diet to stay healthy.

Iceland made it worse by "protecting the claims of creditors against debtors," including most wage-earners. As post-bubble home prices plunged, creditors held their own and even "strengthen(ed) their hand by increasing their take," thus making a bad situation worse. Its people own a shrinking equity in their homes vis-a-vis bankers having the lion's share. Its law shifts homeowners to "Negative Equity," and it works by keeping people in the dark.

But it's much the same in the US to hide the root cause of today's crisis - Wall Street/Washington's engineered housing and debt bubble fraud amounting to financial piracy of the greatest magnitude. In America, Iceland, and elsewhere it's turned "ownership" societies into "loanship" debt trap ones. Until recently, it was unthinkable to let economies be crippled by interest payments. Now it's de rigueur through clever manipulation to convince people and nations to go along with their own demise.

For Iceland, its debt burden threatens its national identity and "loss of its future" the way Adam Smith explained - through bankruptcy when it's too great to repay. "Today, creditors and bondholders care about foreign economies only to the extent that they can charge (enough) interest (to) absorb their entire economic surplus." Getting it all is today's credo, and nothing too outlandish is irresponsible. Get in trouble. Socialism comes to the rescue, for bankers, not people or easy targets like Iceland.

Its "ethic is mutual aid and prosperity for all....a highly socialized attitude (yet how tragic that it's) lead the nation to (buy into) the snake oil (of) debt peonage." Economic growth never keeps pace with accruing debts that get recycled into greater ones, but end games are the same. "Debts that can't be paid, won't be," while bankers too big to fail get bailed out at the expense of public interests and sound economics. Yet Hudson explains: "Creditor mismanagement is the most important problem that any country should strive to avert."

Most important is to foster a free and open market of ideas, to extract the best and discard the others. But that's not how Western societies work, especially banker-run ones. A "free market" for them is "free" of ideas laying bare their snake oil.

"Most societies throughout history provide(d) credit.... without oligarchy." Today it's the opposite. Predatory finance erased centuries of reform and did it at warp speed. As a result, our freedom is threatened and very close to being lost.

What's needed is a return to "basics, and a call for transparent statistics," socially progressive ideas "of a just society free of economic privilege, free of prices in excess of socially necessary costs of production and of rentier income and wealth without effort," earned "in their sleep," not through their labor.

It means wealth should be based on "what one creates - not land and natural resources, or monopoly privileges to extract income via control of roads, the right to create money and other natural monopolies." Reform depends on purging this privilege. "The way to do it is to treat banking like transportation and broadcasting, as a public utility," not something privatized for "rentiers (to) tax society" for what rightfully belongs to everyone.

In the hands of predators, progressive reforms are impossible as financial giants "preserve their special privileges by law, minimizing taxes on themselves by shifting the burden onto labor and industry." Financialization:

-- "raise(s) the cost of living (and) doing business;"

-- frees bankers' "major customers - mortgage borrowers - from taxation to leave (maximum) surplus (for) interest;"

-- collects public sector revenue "by capitalizing it into interest charges" and inflating housing, other real estate, and other business prices;

-- "shift(s) taxes onto labor and industry, thereby raising prices and undermining the competitive power of financialized economies."

This is predation, the very opposite of "classical free market policy." Keynes concluded his General Theory by calling for "euthanasia of the rentier." His followers advocate banking as a public utility "to steer debt creation to fund growth in the means of production, not economic overhead by inflating property bubbles." None of that's in sight. Maybe someday after the inevitable demise of the current system that will eventually crumble under its own weight.

Lessons for Iceland and Other Nations

Iceland "is under financial attack from outside as well as within - by foreigners supported by a domestic banking class. To succeed (they need) to convince the population that all debt is productive, and that the economy benefits to the extent that its net worth rises (that is, make its asset values appear greater than its debt)."

The fact is that prices don't fall, "and if they do, debts should (remain), even (at the expense of) negative equity." Icelanders are being manipulated to believe they have "no alternative but to pay debts that a few insiders (accumulated, ones) that accrue interest when (they're) unpaid." In fact, demanded debt amounts exceed what the country can pay, but the strategy is to conceal this as long as possible "to proceed with the foreclosure and voluntary pre-bankruptcy sell-off of national assets to pay" predators.

What's true for Iceland, holds everywhere Wall Street and the IMF target, and here's the scheme:

-- shrink economies;

-- shift wealth and property upwards to a financial oligarchy; and

-- price "labor and industry out of world markets as a result of the heavy financial charges built int

o (the) pricing system."

Iceland is a "model test case for economic justice." Hopefully it will "confront reality sooner than later" and not get trapped into perpetual debt bondage by succumbing to global creditor pressure or seduction. What benefits them harms people, and everyone needs to know it. Bankers "aim (for) a return to 'normalcy,' defined as new exponential (debt volume) growth" producing more destructive bubbles like the last ones.

Iceland must reject Wall Street's medicine or perish, and the same holds elsewhere, including in America. Bankers, not nations or people, should take the pain. Hudson asks: "How can Iceland (or Hungary, Latvia, Ukraine, or many other nations) pay its debts without bankrupting itself, (in Iceland's case) abandoning its social democracy and polarizing its (people) between a tiny creditor oligarchy and" everyone else? They're threatened by "a new ruling class that will control (their) destiny for the next century" or beyond. It's their choice to reject it and stay free.

Their "foreign currency loans should be denominated in domestic currency at written-down (and de-indexed) interest rates, or repudiated outright." The guiding principle should be to annul debts taken out under (destructive and extractive) terms benefitting creditors at the expense of their prey.

They aim to dominate societies - "above all....to maximize the power of debt over labor. The worse the economy does, the stronger" they get. It's a vicious cycle "recipe for economic suicide (from perpetual) debt peonage." Iceland can be a test case model against it. It comes down to whether it will back its people or, like America, surrender to financial predators. It's much the same globally, the result of the greatest ever economic crisis opportunity for plunder. The perpetrators love it. It's high time they got their comeuppance.

Imagine tiny Iceland taking the lead and fighting back against what another former high-level Wall Street and government insider warns - Catherine Austin Fitts, Assistant Secretary of Housing and Federal Housing Commissioner under GHW Bush and Dillon Read & Co. Managing Director and board member.

In her latest quarterly review, she predicts that "Obama will do more to help bankers achieve centralized control and one world government than any (previous) US politician." In less than three months in office, he's shown bankers they can count on him - to the tune of trillions of dollars, further open-ended checkbook amounts on request, and global "diplomatic" pressure on targeted nations to surrender. It's for public rage, tiny Iceland, and other over-indebted nations to demand "no more." Hopefully enough of them have backbone to do it.


www.uruknet.info?p=53312

thought this fit with the thread, as I said elsewhere not a fan of truthout usually, maybe they are changing...I include the comment as it fits with the discussion elsewhere, and its showing a shift in consciousness, the writer calls for "liberal progressives" to change, ...

http://www.latimes.com/media/photo/2009-04/46171181.jpg

http://www.truthout.org/041109Y

ASEAN summit called off as Thai protesters storm site

Pattaya, Thailand - Thousands of protesters smashed through a glass entrance and stormed a hotel complex today during a key meeting of regional heads of state.

Thailand has declared a state of emergency in the summit's host city Pattaya and the annual meeting of the Association of Southeast Asian Nations has been called off. Other protests have now been reported in the northern city of Chaing Mai, where protesters have blocked a road, and in Udon Thani, where demonstrators have surrounded City Hall.

The widespread turmoil caps a week of anti-government protests that have paralyzed Bangkok and raised new fears about Thailand's political stability.

Thai Prime Minister Abhisit Vejjajiv apologized to his regional counterparts and lifted the state of emergency in an impromptu press conference held in the abandoned venue seven hours after the protesters' assault.

"Anyone who declares this a victory is an enemy of the country," said Abhisit.

The demonstrators swarmed past police barricades and riot police in Pattaya for the second day to demand Abhisit step down and dissolve the government.

Protest leader Kerk Somsan said the group overran the hotel in retaliation for one of their members allegedly being shot dead and others injured by gunfire in a clash with rival protesters earlier that day. They carried through on a vow to occupy the hotel if the government failed to make an arrest in the case within one hour. A Thai government spokesman said authorities are investigating the incident.

The red-shirted protesters pushed police lines up the hotel's steps and trapped them against the entrance. After several moments, the heaving glass shattered and protesters stormed the hotel. Many were waving flags, blowing whistles and horns and chanting "Thaksin," the name of their exiled leader and benefactor, former prime minister Thaksin Shinawatra.

The unarmed group raged through several adjacent buildings in the sprawling Pattaya Exhibition and Conference Center before gathering outside the meeting hall where nine leaders of the 10-member Association of Southeast Asian Nations, or ASEAN, were inside having lunch. The leaders were later evacuated by helicopter from the resort's rooftop, according to reports.

The so-called "red-shirts" remained outside the venue for about 20 minutes before withdrawing to their original position at the gates of the convention center. The protesters, know collectively as the United Front for Democarcy Against Dictatorship, or UDD, claim Abhisit and his four-month-old coalition government came to power undemocratically in what they call a "silent coup" abetted by the military and Bangkok elite.

The UDD has now given Abhisit until the end of the three-day Thai New Year beginning Monday to resign. UDD leader Arissaman Pongruenrong has said if the government remains silent on their demands to step down, the UDD will apply more pressure through social protests. Some 100,000 UDD supporters held protests in Bangkok throughout this week. On Tuesay, the vehicle carrying Abhisit was attacked by protesters while stopped at a red light in Pattaya.

"We showed the world today that the people can win. It's a victory but it's just the first step," said Chatchai Suksom, one of many Bangkok taxi drivers who drove the roughly 80 miles to Pattaya to support the UDD. "We will stop the corrupt puppet government. We have shown the government's weakness to the world."

Minutes before the break-in, Thai government Spokesman Panitan Wattanayagorn told reporters the situation was under control. But earlier, UDD supporters - including more than 100 taxis from Bangkok - blocked the resort's entrance and forced the postponement of a meeting between ASEAN and China, Japan and South Korea. The UDD also clashed with a previously unknown blue-shirted group outside the summit venue.

Wattanayagorn said ASEAN leaders, minus Indonesia's Bambang Yudhoyono, would meet for lunch to evaluate the future of the meeting. The UDD, and Thaksin, made the decision for them.

The summit's botched security is a huge embarrassment to Abhisit, a 44-year-old Oxford economist, who had promised to restore stability to Thailand and boost its reeling economy.

It also sets the stage for a political grudge match between Abhisit and Thaksin, a billionaire telcom tycoon whose exact whereabouts are unknown.

Thaksin faces a two-year jail sentence for corruption, but remains popular in rural northern Thailand for his populist policies while in office. His supporters claim Thaksin has the skills to guide the country during the current economic crisis and insist that he would win a national election.

In recent days, Thaksin has upped his own rhetoric - delivered to his massed supporters via frequent video call-ins. He has recently said Abhisit is too young to steer the nation.

On Friday he told supporters: "Yesterday, Abhisit released a warrant for my arrest and sent two teams to catch me. I laugh, it is a child's threat. I won't give up. I am the one who leads this fight. I won an election but was kicked out by a coup and a junta. If I give up this fight, poor people will still be poor and corrupt politicians will remain in power."

Thaksin was deposed in a bloodless military putsch in 2006, one of 18 coups in Thailand since abandoning absolute monarchy in 1932. While in power he was criticized for authoritarian policies and shady business deals involving his family. The Thai government has frozen some $2.2 billion of his and his family's assets, according to reports.

In late 2008, yellow-shirted protesters overran Bangkok's administrative center, Government House, and seized its two international airports in a successful campaign to topple two Thaksin-linked governments. Abhisit was appointed by parliament after his party came in second in national elections in late 2008.

»

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A Lesson for
Sat, 04/11/2009 - 16:49 — David (not verified)
A

Lesson for Americans... It's interesting to see that citizens in other parts of the world stand up against their governments and the oligarchic elites who rule and destroy the world, but we don't see these same kinds of mass protests and civil disobedience in America. Monks in Burma, anti-capitalists in London and Thailand, students in Spain, shoe-throwers in Iraq- all over the world, people put their lives on the line, get beaten up or worse, to do what is actually needed to dislodge the elites and the thugs. It's true that in America some courageous people have done the same thing. Most of them are in the environmental community, such as Earth First, animal rights, and the people who right now are protesting against mountaintop coal mining in Appalachia. Cindy Sheehan, Code Pink, and other brave anti-war protesters deserve appaluse too. But for the most part, the rest of us liberals and progressives are passive, afraid and weak. Until we show the same guts and determination that this article reports, we will be ruled by monsters, and we will know deep in our souls that we are cowards. Talk is cheap. Action is necessary. When will Americans today display the same direct action courage that hippies, Black Panthers, and others displayed in the 60's when we stopped the Vietnam War and got rid of Nixon?

Any thoughts on this article and/or Michael Hudson's overall economic analysis?



You already know what I think of Hudson's analysis. It is a repeat of "Shock Doctrine", stated with different words. It always comes down to this:

They did it.

They meant to do it.

They are evil.

The first part, "They did it", is always an opportunity to produce a most useful expose of what happened. I think it is great.

The second part, "They meant to do it", is always contrived. I have to admit that there is some Judeo-Christian thing about "intent" going on that I don't fully grok. In any case, no matter how radical sounding the analysis, the second part turns it into the evil intent of specific people rather than a systemic issue which operates independently of any and all intent. It also makes the initial analysis silly. "They" created a worldwide economic crisis for the purpose of strip mining Iceland. Whatever it may have sounded like, this a liberal narrative. Bad people doing bad things...

The third part, "they are evil", finishes the job. Who is "they" (as important a question as, who is "we")? The "they" is "corporatists", greedy bankers, the bitburger-skull-NWO conspiracy... whatever. This is a total diversion, about regulation, or eliminating conspiracies, or human nature or somethin'. Whatever it is, its crap.

I can never decide about these people whether they can't make themselves look into the abyss or whether they consciously divert the issue because they don't like the conclusions. There is also an "idealist" element to it all. Nothing can happen unless someone specifically decides to make it happen. The "plot" has primacy. There is a very middle-class element to it, related to but different from the "intent" thing.

Nobody engineered the Icelandic crisis. The two Icelandic parties saw an opportunity to make a few years GNP by simply speculating on global markets like a small size corporation. They got caught. When they got caught, they had nowhere to turn (they were overleveraged). They had no choice but to turn themselves over to the mercies of international banking. Banking has no mercy. They are in the process of getting kilt. The IMF will opportunistically take the whole island. It happens every day.

My beef with guys like Hudson is that they create as much confusion as clarity.

Any thoughts on this article and/or Michael Hudson's overall economic analysis?



You already know what I think of Hudson's analysis. It is a repeat of "Shock Doctrine", stated with different words. It always comes down to this:

They did it.

They meant to do it.

They are evil.

The first part, "They did it", is always an opportunity to produce a most useful expose of what happened. I think it is great.

The second part, "They meant to do it", is always contrived. I have to admit that there is some Judeo-Christian thing about "intent" going on that I don't fully grok. In any case, no matter how radical sounding the analysis, the second part turns it into the evil intent of specific people rather than a systemic issue which operates independently of any and all intent. It also makes the initial analysis silly. "They" created a worldwide economic crisis for the purpose of strip mining Iceland. Whatever it may have sounded like, this a liberal narrative. Bad people doing bad things...

The third part, "they are evil", finishes the job. Who is "they" (as important a question as, who is "we")? The "they" is "corporatists", greedy bankers, the bitburger-skull-NWO conspiracy... whatever. This is a total diversion, about regulation, or eliminating conspiracies, or human nature or somethin'. Whatever it is, its crap.

I can never decide about these people whether they can't make themselves look into the abyss or whether they consciously divert the issue because they don't like the conclusions. There is also an "idealist" element to it all. Nothing can happen unless someone specifically decides to make it happen. The "plot" has primacy. There is a very middle-class element to it, related to but different from the "intent" thing.

Nobody engineered the Icelandic crisis. The two Icelandic parties saw an opportunity to make a few years GNP by simply speculating on global markets like a small size corporation. They got caught. When they got caught, they had nowhere to turn (they were overleveraged). They had no choice but to turn themselves over to the mercies of international banking. Banking has no mercy. They are in the process of getting kilt. The IMF will opportunistically take the whole island. It happens every day.

My beef with guys like Hudson is that they create as much confusion as clarity.




I've read Hudson on more than one occasion, been swayed by some of his better realized arguments, drew back as he drifted into Naomi Klein-esque superpablum (super-imperialism) and then came back to chew on the meatier parts of his presentation

In the end though, I think the "they did it" part is a bit of a diversion as well. Sure "they did it" and its important to document, but if we're going to get lost in "financialization" we've kind of lost the plot regarding who "we" is. And in this case financialization is surely the nexus where "they did it" arrives and departs just as invariably and directly as that road leads to "they meant to do it and/because they are evil"

In one sense, Hudson's whole schtick is akin to the argument that nefarious corporate execs wake up each morning and decide to dump deadly toxic waste and pollute the environment just because it fills them with such malevoent glee. We pollute because we can. Why are we so evil? Just because! Its a cartoon plot..

Good analysis there anax.

Striving and upscale people always start with individualism, with self-improvement, with self-realization, and see everything from that point of view. Social problems must then be seen as caused by evil individuals, and the solution to social problems must be seen as a matter of becoming better individuals.

In one sense, Hudson's whole schtick is akin to the argument that nefarious corporate execs wake up each morning and decide to dump deadly toxic waste and pollute the environment just because it fills them with such malevoent glee. We pollute because we can. Why are we so evil? Just because! Its a cartoon plot..


Exactly. Well said.

I've read Hudson on more than one occasion, been swayed by some of his better realized arguments, drew back as he drifted into Naomi Klein-esque superpablum (super-imperialism) and then came back to chew on the meatier parts of his presentation

In the end though, I think the "they did it" part is a bit of a diversion as well. Sure "they did it" and its important to document, but if we're going to get lost in "financialization" we've kind of lost the plot regarding who "we" is. And in this case financialization is surely the nexus where "they did it" arrives and departs just as invariably and directly as that road leads to "they meant to do it and/because they are evil"



I'm not a big reader of Hudson but I'm not sure I completely agree. Let me take the generic case.

The combination of the outrages of Bush's administration, the docility of the press, the lack of a genuine "left" press, and the emergence of the web has created a flood of material from dozens of websites.

The material is uneven, admittedly. The farthest left portion tends to be radical liberal with only a few scattered exceptions. The "Shock" types tend to be much more numerous. Nevertheless, the sheer volume of it powers hundreds of websites (including this one).

Yes, the politics is confused, but taken as a whole, the infrastructure created is for real, as is the social criticism. I tend to think that it is all good. The prescriptions tend not so much to be "wrong" as they are nonexistent. As a whole, it ain't Tolstoy or Gogol (or even, Upton Sinclair) but it isn't nothin', either.

http://www.nytimes.com/slideshow/2009/04/11/world/0411_THAI_index.html