The Icelandic Success Story
Iceland went after the people who caused the crisis — the bankers who created and sold the junk products — and tried to shield the general population. But what Iceland did is not just emotionally satisfying. Iceland is recovering, while the rest of the Western world — which bailed out the bankers and left the general population to pay for the bankers’ excess — is not. Iceland’s approach is very much akin to what I have been advocating — write down the unsustainable debt, liquidate the junk corporations and banks that failed, disincentivise the behaviour that caused the crisis, and provide help to the ordinary individuals in the real economy (as opposed to phoney “stimulus” cash to campaign donors and big finance). And Iceland has snapped out of its depression. The rest of the West, where banks continue to behave exactly as they did prior to the crisis, not so much.
Europe's Scariest Chart - Update
Despite Draghi's insistence that 'significant' progress has been made, that the ECB's efforts have not been "killer medicine", that stocks are higher and spreads are lower (implying the ECB "has already done much that is needed"), and how optimistically-biased cherry-picked economic surveys are positive despite weak economic projections; the fact of the matter is that youth unemployment is only getting worse - much worse. Euro-zone youth unemployment is at a record 23.9% but Spain and Italy saw the biggest jumps (to 55.9% and 36.5% respectively). Greece remains the worst at over 56% based on last data, while Germany rests at 8.1%.
[Brain dead, bleed-the-poor and jobsworth politicians want to raise the price of alcohol to stop jobless youngsters drinking. What they should be doing is burying the green dogma stimulants and spending the frittered billions - £7.9bil the latest - in getting energy-cost stalled industry restarted.]
ak_khanna - I keep wanting to believe real commerce can survive, but every day I am bombarded by evidence that it can't.
99% of retail commerce in the USA is dictated by publicly traded channel stuffed bullshit inventory produced for pennies on the dollar in some 3rd world country, for the explicit purpose of manipulating sales data to boost stock prices so directors can grant themselves stock options taxed at the minimal capital gains rate.
If you produce a product with no intention of attempting to court investors for an eventual IPO, you have a near zero chance of geting major retail placement for your product. If you try to go direct to consumer, you have no chance of success without partnering with one of the big outlets, because they already own all of the media buys. Then you must produce your product to sell at a pre-determined price point and give them 90% margin. In the end you'll be lucky to pull in $.10 per item sold at a $19.99 consumer price.
If you are lucky enough to be chosen as the next scam, the handlers will allow you to perhaps make a few million to allow them to facilitate the transfer of billions into their pockets. Knowing that if you even try to go for more or attempt to make a businss decision, they can make your cash disappear in the blink of an eye. You are not a business, you are a facilitator of fraud.
Commerce has been eliminated, replaced by a system to funnel cash directly to a select group of hands. It is insanity to try and conduct real honest business. I can't believe I don't have a head of gray hair at 36. I wish I could think different but I trust my eyes.
adr - All the efforts of politicians, government, central banks etc are focused on saving banks instead of targeting job creation which is the only way economy can recover.
Jobs can be created by initiating the following :
Replace the top management of the too big to fail banks, put the existing ones in prison and charge them with fraud and misrepresentation. Break the banks into smaller ones so that they are no longer a risk to the whole financial system. Implement the Glass Stegall Act.
Use the reclaimed billions of dollars from the arrested bankers and use them to improve the infrastructure of the country. This would create jobs instantly and the improved infrastructure would give the confidence to the small businessman to hire more people.
Tax the richest 5% of the population heavily as they no longer create jobs in the country but outsource the jobs to the low cost developing nations. Stop completely the funding of election candidates by corporates and rich individuals so that their influence on politicians to make rules beneficial to themselves is clipped.
Stopping speculation and derivatives in commodity markets would reduce their prices substantially which would be beneficial to the majority of the population. This would lead to a better standard of living for the middle class families and they would go out and spend helping the revival of the economy.
But in the real world we can keep on dreaming.