Archive for the ‘Market’ Category

Here we go again…

Saturday, August 6th, 2011

Had we not agreed to collectively stick our heads in the sand and wait this thing out?

But here we go again…

On the ratings agencies:

To listen to European and US figureheads pour scorn over the credit ratings agencies is quite surreal. The ratings agencies´position in global finance is no coincidence. They are in fact perfectly rational entities enabled by dominant ideology and policy on both sides of the Atlantic, especially in the nations now most vulnerable (US, UK, Italy, Greece, Ireland, Spain, Iceland, Portugal, EU as a whole…etc.).

If you hand over regulatory responsibility to the free market itself then of course you are going to be at the mercy of S&P, Moody´s, Fitch et al.

On politics:

Complaining about a loss of sovereignty is an easy foxhole for populist politicians like Berlusconi and the Tea Party nut-jobs to run into at this moment. The crisis is a result of policies pursued for decades by politicians and policy-influencers since Reagan, Thatcher, Friedman and others bent on dismantling the post WWII Keynesian system. The outcome of the crisis probably depends on whether Western nations pool together on further fiscal and regulatory co-ordination across borders or each go their own way.

On democracy:

The voting public plays a key role in deciding the course and might be completely overwhelmed. Susceptible to populism, extremism, nationalism and isolationism at the best of times, why are voters going with parties which clearly oppose their general interests, such as the Tea Party, Independence Party and the People of Freedom?

The role of new media makes this one hard to predict. How will the public´s perception be shaped? Surveying the major Icelandic media and internet sites you´d be forgiven for thinking that the main issues of our times were a overly hyped outdoor festival in Vestmann Islands, the beginning of the new English Premier League season or whether Icelandic cross-fit athletes should pay taxes.

The public is still living in a bubble. Will it burst?

Monday certainly looks interesting.

 

 

Related posts:

  1. Fitch, Seriously? Moody’s, No Really?
  2. The Worst News Ever
  3. Who Was Rating Iceland, How and Why and When?

Render Unto Caesar…Or Not

Friday, July 29th, 2011

For the next couple of weeks Icelanders can head down to the tax office and check out what their neighbours and co-workers are rendering unto Caesar for the year 2010.

The tax returns might not make as exciting read as in the heady days of 2004-2008 but they still give the public valuable information about how wealth is spread throughout society. Last year for example, Gudbjorg Matthiasdottir, the fishing magnate from Vestmann Islands topped the list a year after getting out at the last moment with her Glitnir wealth, and courtesy of making her money in a foreign currency she could afford to make former PM and CB governor David Oddson the highest paid media person in the land albeit paying him in the depleted Icelandic krona.

Unsurprisingly, David Oddson’s close allies at the libertarian website Andriki (anti-gov) and AMX.is (claimed to be also funded by the Fisheries Association) have voiced their concerns with the information being made public. And now they are asking why there is not a similar list published of those receiving benefits from the state.

So right wing libertarians in Iceland are fighting the same battle as they are in the US and the UK. Attacking entitlement payments and taxes, and making innocent souls believe they are of the same kind.

It would be interesting to see cold, hard statistics, but due to underground economies and Central European and Caribbean tax havens they might be hard to come by. Yet it is not hard to imagine that tax-evasion by the wealthiest Icelanders is of far greater cost to society than false benefits collected by the poorest.

Yet we are all supposed to feel enraged towards jobless losers who feed off our honest work, while admiring the business smarts of people who can find ways to pay less taxes than they should.

Related posts:

  1. The Icelandic Discourse in A Nutshell
  2. Why The Fuzz About A Man Getting A Job?
  3. Why I Don’t Want To Pay For IceSave

Breivik´s legacy

Wednesday, July 27th, 2011

Anders Breivik´s obviously cares deeply about his legacy. He appears hopeful that his actions will spur a Western revolution against muslims, feminists, atheists and left wing liberals shaping our world to his mind.

It might turn out otherwise. With Breivik having reminded us that muslims are not Europe´s chief source of terrorism, Norway having reminded us that not all nations are either with or against, and right wing dogmatists proving on all sides of the Atlantic that they know nothing about financial management, his legacy might be to serve as a reminder of what populist, nationalist, conservative ignorance will get you. Chaos and terror, just as bad as it is when served up by the left wing extremists they decry.

 

Related posts:

  1. Olafur Ragnar’s Legacy: A Lost Symbol Of Unification
  2. Election Will Move Iceland to the Left

First the Economic Crisis, Then the Social Crisis

Tuesday, July 26th, 2011

The first shock of the 2008 economic crisis encouraged Iceland to apply for EU membership, but its social effects and local political dispute appears to be turning the tide towards a rejection in a national referendum. The social effects of the crisis appear to manifest themselves in fear and distrust of local individuals and organizations and heightened sense of nationalism with bunker mentality towards foreign influence.

Having been hit by the worst economic crisis in modern times, Iceland applied for full European Union membership in 2009. As a member of the European Economic Area since 1994, Icelandic society had undergone radical changes towards modernity through the subsequent effects of globalization and a policies with a libertarian emphasis on a free market economy. But a corrupt political elite privatized many of the state‘s institutions around the turn of the century, including banks which were sold to individuals with little experience in banking but close ties to the coalition parties in government. The three major banks all went under in the span of less than a week in October 2008.

The parliament elections of 2009 saw the ousting of the dominant right wing libertarian party, the Independence Party and a first ever clear majority for a leftist coalition between the Social Democrats and the Left Greens. Having recieved most of the popular votes and running on a mandate of applying for EU membership, the Social Democrats formed a government with the Eurosceptic Left Greens with an application as a high priority. Icelanders for EU membership claim that it offers an economic and defensive shelter for the small nation through the European Central Bank, the Euro and the ESDP and that Iceland‘s place in a globalized world is within Europe. Those against membership claim loss of sovereignty and independence, as well as strong resentment against the union itself, arguing that Iceland‘s future is best assured outside it or through bi-lateral agreements with nations from Canada and the USA to even India and China, even proposing unilateral adoption of their currencies.

Following an economic crisis where the nation‘s wealth is being redistributed, interest groups in society are fighting for power. Budget cuts, higher taxes and a prolongued debate with the UK and the Netherlands over the IceSave agreement have enabled opposition politicians and various demagogues to use nationalistic rhetoric to bitterly divide the nation on matters where it must be united.

Thus the economic crisis has spawned a social one which will shape Iceland‘s destiny in the 21st century, which could prolong the economic crisis locally and globally it could perhaps mean the stalling of further EU enlargement to the west.

Related posts:

  1. EU Membership – The Time and The Place of the Social Democrats
  2. Congratulations! Tax Queen Emerges Victorious From The Economic Crisis
  3. Iceland warms to the EU

They don’t fake it in the Vatican – Iceland President And Pope Trading Untruths

Monday, May 16th, 2011

Political scientist Jack Snyder claims that individuals and groups can gain significant power if they can convince others of their ideas, as those become the norms and ideas which shape our reality.  Iceland’s president, Ólafur Ragnar Grímsson’s official visit to the Vatican in March 2011 raised some interesting questions about agents of powerful positions, be they individual actors or organizations. The first is how both the president of Iceland and the Pope as agents of power can use their positions and the strength of their organization to create norms and “truths” out of assertions which lack sufficient evidence to be determined true. The second is how both use their offices to lend credibility to each other’s agenda, thereby trading in untruths. This leads to the question of whether agents in the international arena should consider carefully who and what causes they are granting credibility to by engaging in diplomatic dialogue and beyond, and finally whether experts and academics should assume a more vigilant role against politicians who attempt to spin their versions of truth around their own agenda.

On March 4, 2011 Pope Benedict XVI hosted a private audience for the president of Iceland, Ólafur Ragnar Grímsson at his office in the Vatican. The two officials discussed the importance of the Icelandic Sagas in Christianity and how early European discoverers in North America had brought the religion to the continent earlier than commonly assumed. They also talked about the consequences of the economic crisis in Iceland and the Pope received a warm message from the Catholic bishop in Iceland.

The main event of the visit was a seminar on medieval-and church history in the first centuries of Iceland’s settlement and a gift presented to Pope Benedict by Mr. Grímsson on the behalf of residents of Snæfellsnes peninsula in Iceland, a statue of Guðríður Þorbjarnardóttir, the main female character in Eirík’s Saga and Greenland’s Saga. Born sometime around 980 in Iceland, the legend has it that she and her father left the country for Greenland after she refused to marry the son of slave. There she married Þorsteinn, the son of Greenland’s first European settler Erik the Red, and brother of Leifur Eiríksson. Leifur is considered the first European to land in North America, in an area of Newfoundland then known as Vínland. Þorsteinn died on the way back from the expedition and Guðríður married Þorfinnur Karlsefni and together with him left to attempt settlement in Vínland. While in the New World she gave birth to their son, Snorri Þorfinsson who is said to be the first European born in the New World. The family returned to Greenland shortly thereafter where Þorfinnur died. With Christian conversion sweeping Iceland, Guðríður adopted the new faith and according to legend headed south on a pilgrimage to Rome, visited the Pope and told him of her travels. Returning home, she became a nun and lived in a church her son built on their estate.

The international media and independent bloggers reporting on the president’s visit certainly found the story of the well-travelled Icelandic woman riveting. Rome Reports, an independent television news agency based in Rome, specializing in coverage of the Pope and the Vatican  reported on the visit with the headline “President of Iceland speaks about Icelandic missionary in America 1000 years ago” on its YouTube page. The reporter claimed that Guðríður “visited the new world of America on a religious journey” and that she was considered as one of the great heroes of Icelandic culture. The television station interviewed president Grímsson who stated that “she was the first person in world history to be both in America and in Rome five hundred years before Christopher Columbus arrived on the scene”, “she was a Christian woman so her journey to America a thousand years ago was a missionary journey, she had some priests with her so her life story embraces the world of Christianity”. The report concludes with a note from the president that “this remarkable Icelandic woman is not just an important figure for the people of Iceland but also for the entire Catholic world because she was the first person to bring Christianity to America one thousand years ago”.  A search of “Icelandic missionary in America” on Google.com on April 20, 2011 returned seven results on the first page, all with a similar headline, “President of Iceland speaks of Icelandic missionary in America”.

They don’t fake it in the Vatican

The president of Iceland says that the Pope’s decision to accept the statue of Guðríður Þorbjarnardóttir as a present is a historical even. Thereby the Vatican officially acknowledges that Christopher Columbus was not the first Christian person in America. In a press conference today, Ólafur Ragnar Grímsson said that a strong argument could be made for Guðríður being one of the most important, if not the the most important female explorer in world history. She had also played a notable part in Christianity and was the first person in the world to visit both Rome and America. When the Pope recieved her statue in the Vatican, he was making a historical acknowledgement of her place in world history. - Visir.is, February 24, 2011

While the story of Guðríður is certainly interesting and her reputation has been enhanced in the last couple of decades, there is little or no consensus amongst Icelandic academics on such claims that she was a Christian missionary on her trip to Vínland, and the only indication of her ever visiting Rome is a short passage in Greenland’s Saga which merely states that she “walked south”, which is certainly open to interpretation. Eirik’s Saga makes no mention of a southward journey, yet Guðríður plays an even more central role there.   While the president visited the Vatican, historian Guðni Th. Jóhannesson spoke at a seminar sponsored by the Science and Technology Policy Council held at Reykjavík University. The topic was “How do we distribute public funds to projects in science and innovation, in order to maximize quality and gains?” Guðni indicated that the role of academia to inform the public discourse was undermined by a low emphasis on public funding for independent research. He brought up the role of the History and Policy Network in the United Kingdom which aims to dismantle historical myths in contemporary debate and expose political and public relations spin of history.

Jóhannesson used president Grímsson’s visit and the promotion of the story of Guðríður Þorbjarnardóttir as an example of such “bad history” and showed the audience bits from a mailing list conversation which had taken place between Icelandic historians and academics a week earlier.

These are the same clichés that were being bandied about in 2000. This version of historical events was harshly criticized back then. But the politicians did not want research, they wanted images. - Úlfar Bragason
We can not guarantee any of this as historical facts, but neither dismiss this as nonsensical myths, we can only estimate the likelihood of each part by itself, from Guðríður existing (good odds), to her visiting Rome (rather implausible). - Helgi Skúli Kjartansson
It is hardly encouraging to attempt to engage in discourse with politicians and those who aspire to lead the public. - Sigurður Gylfi Magnússon
Looking back, is it not rather odd, considering the given importance of the issue, that it is Ólafur Ragnar Grímsson who is knocking on the Pope’s doors instead of the Pope making the first move. - Sigurður Gylfi Magnússon
I should also mention that I was on the radio … Channel 2 two days ago … talking about this issue with Guðríður. There I could refer to my article from Approaches to Vínland from 2001 … where I emphasise how suspicious it is that Guðríður walking south is only mentioned in Greenland’s Saga, but not in Eirik’s Saga, where yet she is the main character.- Helgi Þorláksson
“Isn’t this a bit of historical pompousness my dear Guðmundur. History is not the private property of those with a BA degree or more in history; not anymore than psychosis is only the business of pshychiatrists.” Yes it is probably true what you say, discussing these matters with politicians will get us nowhere.  - Guðmundur Magnússon reciting a Facebook-conversation with a politician.

From these discussions between leading academic historians in Iceland it can be safely assumed that the story being told of Guðríður in the Vatican is considered at least debatable within their circles. Helgi Þorláksson who is a leading research authority on Guðríður’s story has appeared on several radio and television programs to dampen the hype surrounding it. As Úlfar Bragason mentions, the same myths were resurrected around the year 2000 when the one thousandth anniversary of Christianity and the discovering of America by Leifur Eiriksson was celebrated in Iceland. On his popular blog, television host Egill Helgason pointed out that back then, feminist historian Þorgerður Þorvaldsdóttir claimed that there were commercial interests at play, that the discovery of America was supposed to be a sellable product, including a thousand year old image of a woman who had suddenly become a national hero, as the first woman to bear a white child in America, yet mostly unfamiliar to Icelanders. Þorgerður herself, “can not recall ever hearing of this woman”. Helgason wrote that the president’s visit to the Vatican was a good example of how the past is designed, history being produced so to speak.

Snyder says that the study of international relations is supposed to tell us how the world works and explains that it can puncture illusions and strip away simplistic assumptions and brand names used in popular discourse.  Þorgerður Þorvaldsdóttir’s point of Guðríður Þorbjarnardóttir’s commercial value is an interesting one. Accompanying the president of Iceland to the Vatican was Guðrún Bergmann leading a small group of inhabitants from the Snæfellsnes peninsula. The group appeared unfazed by the discussion taking place back in their home nation, about the vagueness of Guðríður’s story. Asked about the claims made by the president about the role of Christianity in Guðríður’s life and her making the trip to Rome, Bergmann replied,  “We do not know this but we intend to strike a deal on cooperation between the University of Iceland and the Árni Magnússon Institute for Icelandic studies on one hand and a catholic university in Rome on the other to research documents in the Vatican and other things relating to these events in early Christianity”.  Another visitor to the Vatican, Guðmundur Kristjánsson, owner of one of Iceland’s largest fisheries and an influential member of the Snæfellsnes society brushed off the concerns by stating that the Vatican had studied the story thoroughly, that “there were dozens of people and they knew what they were talking about. They don’t fake it in the Vatican”.

Trading untruths

Ecclesiastical principalities are acquired either by ability or by fortune; but are maintained without either, for they are sustained by ancient religious customs, which are so powerful and of such quality, that they keep their princes in power in whatever manner they proceed and live. – Macchiavelli

To gain an understanding of the reasons and motives behind the president’s visit, the constructivist approach of Alexander Wendt explains how cooperation between actors who have their own agendas, egoists as he puts it, is a process of reconstructing their interests in terms of shared commitments to social norms.   States and actors agree on certain norms and realities and their sovereignty is dependent on recognition from other actors. In the case of the Icelandic president and the Pope, each has a story to tell, stories lacking evidence and facts. So they seek approval from each other. What is Pope Benedict getting in return for his approval of the story of Guðríður Þorbjarnardóttir? He receives accreditation. By making an official visit to the Vatican, heads of state acknowledge the Pope’s role as the representative of God on Earth, furthermore granting credibility to a deity and a belief system which not only lacks in scientific evidence but has also been criticised for the manifestations of its power.

The Catholic church receives regular criticism for is its conservative approach towards women, which includes banning them from entering priesthood, a high degree of tolerance of children’s abuse by its officials and a tough stance against contraceptives and abortion which has grave consequences in the developing world. When the church issues statements or policies they sometimes revolve around matters of life and death. For centuries it maintained that unbaptized children would end up in limbo forever denied access to heaven, then one day Benedict XVI, the same Pope who hosted the Icelandic delegation, suddenly abolished it as if it had never mattered at all.   When the Icelandic delegation met with the Pope, observers in Iceland noticed that they covered their hair with veils out of respect to Vatican tradition. Is it simply an innocent sign of common courtesy for representatives of liberal democratic states to discount their values in the presence of agents of conservative states or does such show of respect lend credibility to their values, beliefs and actions?

In contemporary world society actions are carried out by actors who dominate the cultural stage in virtually all cultural theories. Individuals, organizations and states are legitimated entities expected to act as agents of their interests. No single actor has central control and the legitimated actors are supposed to have similar goals. Supporting this cultural framework yields collective authority as proper actors legitimate each other. Norms and ideas then define the actors and their actions. Nation states, ritualized and structured actors are more isomorphic and more uniformly reactive than is commonly believed.  Christianity and its branches are certainly amongst the biggest influences on Western culture in the past two millennia. The Catholic Church has withstood both the Reformation and the Age of Enlightenment and remains a powerful enough force in world politics for the president of Iceland to seek the Pope’s accreditation. Guðrún Bergmann at least seemed overawed as she described the group’s reaction when it visited the Vatican, “One fills with respect, walking through halls inaccessible to the public. We talked amongst ourselves that a billion people would like to trade places with us. This was a big moment.”

A perspective

When a democratically elected president speaks publicly as his nation’s representative, he is listened to and therefore his words matter as well as who he is speaking to. That is where his responsibility lies. The president strived to present a polished, hubristic and nationalistic image of Icelandic superiority, based on ancient heritage. – Althingi’s Special Investigation Report.

What is concerning about the before mentioned discussion in the historians’ mailing list is the resigned attitude many of the academics display towards politicians shaping their own versions of the truth. It appears as if they consider themselves unable or at least unwilling to go up against seasoned political debaters and spinsters in a public debate. It is truly a shame as the public would surely benefit from their expert insight. During a course named The Crash in an academic light at University of Iceland in the summer of 2010, associate professor in translation studies, Gauti Kristmannsson pondered the musings of Antonio Gramsci about whether academics were an isolated group in society or whether elite groups exalted their own preferred scholars. Kristmannsson expressed his concerns that academics were being suppressed in Iceland, through muted threats of lawsuits or assaults on their academic integrity by politicians, members of the business community and even from their own politically involved colleagues in the academic profession.  Balancing the public discourse is not solely an Icelandic concern. Political spin on facts and history is common everywhere as is evident by the need organizations such as History and Policy in the UK.

In his seminar, Guðni Th. Jóhannesson’s conclusion is that science and research is far too important to be locked up within small research communities and that academics must engage the public and expose it to their work. When considering the benefits of academia in Iceland, the emphasis often seems to be on innovation and value creation, market driven rewards mirroring the emphasis on the libertarian theory so dominant in Iceland. But there is certainly also value in academic criticism and in experts seeking to balance the public discourse and the actors of powers who try to mould it as they see fit.

In 2009 Alþingi, the Icelandic parliament appointed a Special Investigation Committee (SIC) to compile a report on the causes of the Icelandic banking collapse of 2008. It included a section on ethics in Icelandic society where politicians are criticized for neglecting their duties towards the public, by amongst other things refraining from consulting independent expert advice on the bank’s true position. The report claims that “the state was systematically neglected, as dominant belief in self-regulation by private actors was the mantra of the day. Disbelief in experts and expert opinion has been apparent within Icelandic politics, probably because it is thought to dampen the power of elected officials,” and “political culture in Iceland has been overly characterized by power struggles and debates where the truthfulness of statements are insignificant”.

According to the SIC, the Icelandic media participated in shaping the discourse which promoted the success of the Icelandic banks instead of offering healthy criticism. It also makes a point of noting that academics could have participated more in the public discourse, but admits that they would probably not have been received well, and even silenced.  Finally, a critical mention is made of the president’s role in promoting ideas of the superiority of Icelandic bankers. French philosopher and political scientist, Michel Focault asked if there was a common thread between the fields of knowledge and power. He believed there was a general consistency, which could not be reduced to identity, between modes of interpretation and operations of power. Focault claimed that power and knowledge were mutually supportive and directly implied one another. This helps in understanding how operations of power holders fit with the social and political fabric of the world. This contradicts the orthodox scientific account that knowledge should be immune from the influence of power. Here Focault is in opposition to Immanuel Kant‘s claim that the possession of power must inevitable corrupt the free judgement of reason. Scholarly work, including studies in International Relations is often supposed to require a suspension of values, interests and power relations and lead researchers to an objective conclusions. Focault countered the production of knowledge as a cognitive matter by explaining it as a normative and political.

The role of the president of Iceland as performed by Ólafur Ragnar Grímsson in the years leading up to the banking collapse in 2008 was severely criticized by the SIC report which asked whom the office was really serving? The report finds the president’s support for private institutions and the access he granted wealthy businessmen to the office concerning. It also describes how Icelandic historians reacted to his speech to the Walbrook Club in London in 2005, which was mostly repeated at the Icelandic History Society in 2006, as being filled with “generalizing, nationalistic arrogance and outdated interpretations of history not based on modern research nor modern theories”.  Icelandic historian Guðmundur Hálfdánarson draws on Barrés and Renan’s assertions that identities and thereby nationalities are shaped by common history and memories of the past and how people are united under historic interpretation which forgets an inconvenient past and enhances the versions which fit a convenient truth. Hálfdánarson explains how traditionally Icelandic politicians celebrate a glorious past of the Icelandic Saga’s to mould a uniting story of a special people.   Similarly journalist David Campbell explains In National Deconstruction, his account of the Bosnian war, how narratives shape how we sense reality. He cites White‘s observation that events in a chronicle are real, not because they occurred, but because they are remembered by ex post facto accounts. The historical field is simply to wast and heterogeneous to be able to draw conclusions from a single account. For there to exist a historical account of events, they must be used in a narrative which is neither given nor determined by the events themselves. Scholars as well as the public must therefore be on guard for the possibility of different interpretations of events when pay close attention to the narratives available when drawing conclusions from them. Campbell warns that the same events can be represented in markedly different ways with significantly different effects. Events must therefore be examined through perspective.

When in Rome

Politicians who are able to construct reality around their versions of events are able to obtain and hold onto power. When the facts do not add up, they are able to seek support from other powerful actors. The Icelandic president is far from alone amongst state leaders and politicians in mishandling historical events to fit an agenda. Enhancing the reputation of an Icelandic woman who lived 1.000 years ago might lead to increased cooperation between Icelandic and foreign institutions, there might be research money to be had from sources that otherwise would not be available, and tourists might arrive in greater numbers at sites of historical significance.  Yet perspective gives cause for caution. In Christian Reus-Smith’s introduction to constructivism it is explained how institutionalized norms and ideas define the meaning and identity of the individual actor and the patterns of appropriate economic, political and cultural activity it engages in. Through reciprocal interaction, actors create the relatively enduring social structures by which identities and interests are defined. Norms and ides shape identities through three mechanisms; imagination, communication and constraint. A president in an established liberal democracy will use strategies to enhance his or her power within the norms expected.

According to the SIC report and academics Icelandic politicians are notorious for disregarding facts and expert opinion. The report states that citizens in a democratic state are responsible for their elected officials, and that to be able to carry this responsibility the conditions for forming enlightened opinions must be favourable.  So is the nation responsible for creating conditions where it is represented by a head of state that is repeatedly criticized for bending facts and shaping history to his own accord? When in Rome it might be considered appropriate to do as the Romans. But the Pope is no ordinary head of state but a representative of an ecclesiastical principality on Earth, albeit a very powerful one. Unlike the Icelandic president, he is not democratically elected and his subjects are actively ordered to not question his policies, words or actions. The Pope’s official visit to Britain in 2010 was met with a high level of public criticism, led by academics such as Richard Dawkins and media figures such as Stephen Fry.  Seeking credibility by trading untruths with an absolute monarch is highly questionable for a democratic leader and it should certainly be challenged by academics, experts and critical thought but as the Special Investigative Committee admits and Guðmundur Hálfdánarson has described, the conditions for a challenging debate has historically little traction in Iceland.

There is a difference in claiming knowledge and exhibiting desire to find the truth. In a television interview with Rome Reports, president Grímsson without exhibiting much constraint, makes blunt statements about the importance of a vague historical figure. Unsuspecting persons searching for known facts and preserved stories on Guðríður Þorbjarnardóttir might take him for his word and put faith in what he says because of his position. The question remains for experts, academics and critical thinkers, if untruths are not challenged by society, what other stories might persons in the office of a president construct to fit their own agenda?

Related posts:

  1. Bloomberg: Iceland Banks Didn’t Violate Rules, President Grimsson Says
  2. The Disappearance Of A President
  3. The End Of History

Real Reform Or Just More Of The Same?

Friday, January 28th, 2011

If a whole election would be ruled illegal by the supreme court in any civilized nation, the minister responsible for the election would surely resign.

In the case of the Icelandic constitutional assembly elections, that would be the minister of interior. But try to tell that one to Ogmundur Jonasson.

After all, the call for constitutional reform was not just to change around a few words on a piece of paper. It was a demand for political reform. A new way of doing things, including politicians assuming more responsibility.

The most serious charge against the vote as it was carried out is that the ballots were easily identified by barcodes and numbers. A mind-boggling oversight on the parts of the organizers. Yet, things remain the same in Iceland. Blame is assigned elsewhere by anyone remotely connected to the execution.

But of course things are more complicated than that. The Supreme Court is part of what needs to reform. It might have had perfectly good reasons to overturn the whole election, but the way the justices have been appointed does little to enhance trust in the judicial system. It does not take a whole lot of stretch of imagination to question the motives of the three Independence Party insiders who ran and were the only ones out of 498 candidates who lost who saw reason to question the process.

There are no precedents of nationwide elections being ruled illegal in Iceland. There are six examples of local elections though, the most interesting being the one in Borgarbyggd in 2002, when outside ballots were questioned. In that case the Independence Party’s representative was against invalidating the result and went to court to try to overrule the decision. The vote was eventually repeated. The IP rep was one Odinn Sigthorsson, the very same who is one of the three who challenged the constitutional assembly vote.

And now they bark about money down the drain and that the whole thing should be called off.

The truth of the matter is that Iceland probably can not afford not to repeat the vote. This has to go through.

Because if there are going to be words on a piece of paper for politicians to ignore, it is better that those words are written by the people, for the people. Even if some of the people don’t care for that at all.

But if the current government is serious about reform, then one or two resignations every now and then will enhance its reputation in the minds of the 50% of Icelanders who currently do not put their trust in any particular party.

Related posts:

  1. Skafti Hardarson Will Inherit Iceland
  2. A Cause For Concern On Constitutional Reform
  3. For Iceland To Get Back On Its Feet Important Reform Is Needed Within Independence Party

How Things Really Work In Iceland

Tuesday, January 25th, 2011

Still scratching your head over the power plays surrounding the constitutional assembly?

Well scratch away as the Employers’ Association under the leadership of the Independence Party’s Vilhjalmur Egilsson has threatened that it will not participate in pending talks on wage reform with the unions and employers associations unless the government reneges on its intentions to dismantle the current fishing quota system.

Blogger Jon Danielsson points out that this would be an understandable demand from the Fisheries’ Association, but from the Employers’ Association it makes little sense. It only counts 190 out of 2.426 of the businesses it represents as fisheries or 7.8%. Of the 56.100 employees working for their members, only 4.700 or 8.4% are with the fisheries.

The fisheries stance on the wage negotiations and the support they get from the Employers’ Association  means that more than 90% of the employers working for the latter’s members will have to wait for better pay for a while yet.

About half of them will probably succumb to some libertarian slogans and nationalistic rhetoric and end up believing that this is how things are supposed to be.

And that is how things really work in Iceland.

Related posts:

  1. The Monkfish That Destabilized Iceland
  2. Dirty fish at HB Grandi
  3. Why Iceland Continues Whaling

Skafti Hardarson Will Inherit Iceland

Tuesday, January 25th, 2011

Skafti Hardarson will inherit Iceland.

For those who are not fluent in Icelandic, Skafti is the Icelandic version of Glenn Beck, albeit with a much smaller following, a blog site instead of a TV show and where he lacks in props he more than makes up for in derisory and outraged vocabulary.

Skafti thinks the idea of a constitutional congress is a waste of money and senseless in the current unstable environment. He has made no secret of this opinion, along with other opinions about the horrors of the current leftist government, protesters and special investigations. When Skafti first arrived on the blogging scene, people debated on Facebook whether he was real or not. His hatred of Jon Asgeir Johannesson, Baugur, the Social Democrats and professions of admiration in David Oddsson were considered too blind, too outrageous and too deep-seethed to be written by anyone who is not a comical character or a lunatic fanatic.

Others then begun pointing out similarities between Skafti’s writing style and the one used by his long time friend and libertarian ally Hannes Holmsteinn Gissurarson. But whoever wrote Skafti’s words, sure did not like the idea of Iceland holding a constitutional congress.

So Skafti did something unexpected. He ran for the congress with a mandate that the constitution should be left unchanged. Skafti was one of almost 500 people who ran and he did not win a place. But then he did something which was not so unexpected. He challenged the execution of the election on technical details. Of the 498 other candidates who ran, only Skafti and two other Independence Party members and supporters, Odinn Sigthorsson and Thorgrimur S. Thorgrimsson went to court attempting to get the result overturned.

The threesome complained that the voting ballots were traceable, that there was not enough privacy in the voting booths, that they were not allowed to have a representative present during counting. All debatable points in the first personal vote Iceland has conducted with so many candidates.

It is worth remembering why the constitutional congress was held in first place. Iceland had gone through a crash which was not only economic, but also moral, political and social. A political elite had abused the democracy and institutions of Iceland.  Icelanders have called for constitutional reform for decades but it has so far drowned in committees, assigned and arranged by the political parties themselves. The system of old was broken and finally after 2008, an opportunity to debate and enact necessary reform opened up.

So it was up to the Supreme Court to decide on the threesome’s complaints. To counter the threesomes’ argument they were presented with a precedent from previous elections where the result stood in spite of minor technicalities having gone wrong on the grounds that there was no evidence of malicious intent.

But the Supreme Court still ruled the election illegal. No constitutional congress. Skafti won, Odinn won, Thorgrimur won, David Oddson won and Hannes Holmsteinn Gissurarson won. Inga Lind Karlsdottir, the soft news television presenter who ran as a candidate aligned with the Independence Party and got in was immediately indignant in the media. Pressan.is owned by benefactors from the old system immediately questioned whether ministers should resign and debated the waste of money.

The supreme court ruling was performed by the following justices:

Arni Kolbeinsson and Jon Steinar Gunnlaugsson, both bridge partners of David Oddsson and Gardar Gislason, Gunnlaugur Claessen, Pall Hreinsson og Vidar Mar Matthiasson. All justices were appointed to the court in by justice ministers of the Independence Party during a period in Icelandic history which has been criticized harshly for corruption and bad governance, for example in the Special Investigation Report which Pall Hreinsson presented last year.

Constitutional reform is directed against the old system. The old system does not want reform.

Someone said in December 2008, “they will wreck havoc, and keep hold of their power and influence by any means necessary”.

It is indicative of the problems Iceland faces, that those responsible for the constitutional congress did not cover all their bases.

And using and abusing every little crook and nanny, legal or otherwise, Skafti Hardarson will inherit Iceland.

Related posts:

  1. Real Reform Or Just More Of The Same?
  2. First Law Against David Oddson’s Type Of Governance
  3. Its All Gone Fucking Fuck In Iceland

In Whose Name?

Tuesday, January 25th, 2011

Remember Indefence? The group which persuaded the president of Iceland not to sign the IceSave agreement last year. Which many believe has saved Icelandic taxpayers some serious amounts with the agreement of better terms a year later, while others maintain that it has delayed the reconstruction of Iceland by keeping away foreign direct investment because of percieved political uncertainty and hindered the availability of good credit eventually chasing away home grown blue chips like Ossur.

This all remains to be seen and the real effects will probably not be known for another twenty years. But the political manouverings of Indefence are interesting to say the least. Here is a non governmental organization which has sprung forth in two years as a major policy influencer. How and why? Remember Bjarni Benediktsson’s conversation with the US Embassy?

Bendiktsson said that, in an attempt to force the issue into the courts, he intends to oppose the government-sponsored Icesave bill when it comes up for a vote in Parliament.  (Note:  Benediktsson, along with most of his

opposition Independence Party colleagues, abstained when the previous law was passed in August.  End note).  He acknowledged, however, that the coalition government probably had the votes necessary to pass the measure through parliament.  He also admitted that, were he to have his way and the bill fail in parliament, it could further stall Iceland’s recovery efforts.  It would certainly mean no further loans from the IMF and, without that cash inflow, the government would be unable to lift its capital control restrictions and would likely have to issue Euro bonds to raise the necessary capital.  He also said he was not anxious to assume leadership of the government, but preferred to remain in opposition until after the May 2010 municipal

elections to benefit candidates from his party.

So how about this from the opposition political leader? First we will throw any obstacle we can in the way of the government so that it is weakened in the eyes of the voters. Secondly we will use this to ride a wave of discontent back into the seats of power. Thirdly, it does not matter whether the nation as a whole suffers, as long as the party is back on its feet.

But how do the two most unpopular political organizations of 2009-2010 go about advancing their agenda? Supporting and influencing an organization battling vehemently against key issues for the government would seem like a good idea. Indefence anyone?

Olafur Eliasson of Indefence has scoured internet forums and blog comments to deny this. He maintains that the group’s agenda is to prevent the people of Iceland assuming massive debts which will hinder prosperity in Iceland’s future. He states that himself and Agnar Helgason had the original idea of creating the Indefence group and have fought to keep it bipartizan in nature.

It would be imprudent to accuse those two of holding political beliefs which they might not, but it is hard to look past the company they keep. Amongst the first prominent Indefence members was Sigmundur David Gunnlaugsson, who soon thereafter assumed the leadership of the Centre Party. He has now hired Johannes Skulason, another vocal Indefence member to be his assistant. Another, Magnus Arni Skulason has held positions on behalf of both the Independence Party and the Centre Party. Eirikur S. Svavarsson is a pronounced supporter of Gudlaugur Thor Thordarson, the former IP minister who was instrumental behind the giant donations the party got from Landsbankinn and FL Group in 2006. Lawyer Helgi Ass Gretarsson has been one of the most active legal supporters of the current fishing quota system so precious to the Independence Party and the Centre Party and Sigurdur Hannesson represented the Centre Party on the committee on foreign investment last year. Least we forget the “invisible member” of Indefence, David Blondal who is the son of one of the Independence Party’s most vocal members of Althingi Petur Blondal.

Perhaps Olafur Eliasson and others were working in good faith in something they absolutely believed in. But one lesson from Indefence and the events of 2008-2011 in Iceland is that in democracies, NGO’s can influence national policy and adapt it to their goals.

The only question is, who elects them to do so and whose agenda are they pushing?

Related posts:

  1. InDefence: Request For A Meeting With The Dutch Finance Committee
  2. IcelandTalks: The Indefence group, Kaupthing and the Progressive party
  3. From The Ashes, Dirt Rises With New Iceland

Who Was Warned?

Monday, January 24th, 2011

The most interesting twelve months in modern Icelandic history is the one between October 2007-October 2008.

Who was warned?

Interestingly very little has been written about this period. Except that former ministry director Baldur Gudlaugsson is on trial for selling his Landsbanki shares after a meeting with Alistair Darling in the summer of 2008.

Recent news suggest that former Icelandic national team goalkeeper and Glitnir private banking employee Birkir Kristinsson sold billions in Glitnir stock well in advance of the crash.

Interesting period indeed.

Related posts:

  1. Who Got The Calls From The Invisible Hand?
  2. Bankers Bonuses And Perspectives
  3. Did Svafa Get The Call?

You Can Keep This Junk!

Monday, September 20th, 2010

An Icelander who has moved abroad sent a letter to former minister of social affairs Arni Pall Arnason and Althingi MP’s.

I like his style, the letter is titled “You Can Keep This Junk” (excerpts from Pressan.is):

I have paid all my debts religiously from the first day of the collapse. I have had enough of this society which you are taking part in creating and have moved abroad with my family. We are both college-educated and had good jobs in Iceland and there was nothing to indicate that we were about to lose them. Still we decided to get away when we saw the direction things were heading.

Those who robbed us of all our belongings still walk around and get their debts written off like there is no tomorrow but we have to pay all the unfair debts surrounding us and assume the price hikes due to the inflation which is the consequence of the business genius of these same robbers.

As the title of my letter indicates, I am seriously considering stopping paying for this bank-robbery and you can keep this house which I am supposed to “own” in Iceland, everything else has been taken away anyways.

Where I live today I have it good.  I have a good salary and a great job. What is most important is that here they handle criminals the way they ought to, and impotent politicians take responsibility for their work.

It would never be tolerated that a minister would hire his friend to a position, but then it would turn out that the friend has left behind him scorched earth wherever he has tread, gets hundreds of millions written off and jumps away from the job after one day. The minister and his friend then to appear in front of the nation to shovel more dirt onto the heap to hide the crap which has already begun building up.

No thank you and good luck with this endless comedy you so enjoy playing. For the love of God, keep acting like clowns because otherwise there will be no material for Spaugstofan and Aramotaskaupid (comedy shows).

Related posts:

  1. Morgunbladid Drawing The Line?
  2. Why whales?
  3. Pigs are flying

Exponential Growth In The Insane Dreamland

Saturday, September 18th, 2010

In the last ten years I have found myself becoming much more cynical. It might be a part of growing up from being a blue eyed college student to becoming a supposed grown up.

It is easy to long for the days when the biggest worry was “will she pick up the phone”, when pondering the dimensions of economic security in a world which has reneged on the promises made to us who grew up in the eighties and nineties. When Reagan and Thatcher seemed to have it all going on and everyone listened.

According to Chris Martenson who gave an excellent lecture at the University of Iceland last week, the suburban home and SUV might soon become heavy burdens on today’s families. And judging by the latest discussion in the UK, families themselves might become a burden to modern man…and woman.

If you haven’t seen Martenson’s Chrash Course then you should:

Martenson is one of the growing band of thinkers who are criticizing the economic mantra that growth is the most vital thing in any society. Just like Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi in their report to French president Sarkozy, he challenges the wisdom behind anticipating growth on top of growth. It requires ever more creation of wealth, at a compound rate in a world where resources are heading the other way.

Andri Snaer Magnason, who wrote the book Dreamland while everyone was enjoying the spoils from the Karahnjukar dam bubble and then turned into a documentary wrote a hair raising article in Frettabladid a week ago, In the land of the insane males. He continues with his Dreamland theme of exposing the political interests behind turning Iceland into the largest aluminium manufacturer in the world.

“It is insane to increase your banking sector at a tenfold rate in seven years. We know that now.”

“Iceland’s energy output was doubled from 2002-2007. To double energy production in a developed country in only five years is not only unheard of but it would also be considered outrageously crazy in all our neighbouring countries.”

“We did not have linear growth but exponential growth. The insane period was supposed to be followed with utter and complete madness. The madness was supposed to be financed with the public utilities companies taking on 400-500 billion 100% loans. Almost two million per every man, woman and child in Iceland – all tied to the price of aluminium and secret energy prices which is utter delusion. This was portrayed in the media as just another job creation”.

“The insanity is now obvious in the geothermal energy sector. The developments there had been even and steady since the introduction of geothermal heating during the earlier recession years. Now it appears as if people have drilled down on a cocaine source and filled up their noses.”

“In the county of Thingeyjarsysla they are aiming for tenfold energy production to serve a new Alcoa smelter in the next five years. Is that not a 1.000% increase?”

“In our country, madness is portrayed as the norm, even as vital and insanity is the highest virtue – everything is considered normal if  a “local” wants it. There is nothing as insane in Iceland as the holy “local”. If a local wants unknown people to build oil refineries in his land – then it is considered his holy right, not least if he uses the word “job creation” to justify his actions. The magical word which empties the minds of the insane males and cripple critical thought. Amounts which would be deemed considerable in the economic numbers of neighbouring countries, energy resources and pillars which larger nations think of as important parts of their “defence strategies” are under the heel of “locals”. The nation’s energy resources and nature is in the hands of few small local governments which lack the staff and expert knowledge while the largest part of Icelanders living in the nation’s capital area is nowhere considered as “locals. An aluminium company run by the mafia? Suspect mercenaries? World famous polluters? Utilization rights for 120 years? Icelanders are prepared to go as far as possible to please their prince charming that they become like the ugly sister in the adventure, and cut of their toes to pull on the glass slipper”.

“All obstacles were cleared to save Alcoa 200 million dollars in energy costs per year. It is the amount you would pay 10.000 teachers. It is insane to hurt the employment of so many to create 400 jobs”.

“At an aluminium conference such a man would invoke more lust than an exotic dancer. A western nation with the legal and moral approach of a third world country. Yum!”

“The workers unions do not want rules, professionalism or forward planning in the energy sector. It only wants “all obstacles removed”.” (ed: an actual quote from the unions)

“We are in the midst of a revolution but they don’t call themselves aluminium revolutionaries. The define themselves as normal even if the scale is insane. They even consider themselves persecuted. That is how warlords are always persecuted peace loving men who just want to invade the neighbouring country in the name of peace. Those who do not participate with the mob are considered insane or traitors.”

“Polls through the years have shown that a large portion of males of the age of 40-70 have been in favour of the insanity – to double and then double again. The largest problem is amongst the voters of the Independence Party where a large majority of males have even considered the insanity vital to life in Iceland. In addition, many of them want to relax environmental regulation. There is the most serious political virus in Iceland. If everything were normal, our males should be conservative, frugal, risk averse, religious, thrifty, to have regular habits and even be a bit boring. This is an important group to each society. There are many typical fathers in their group, the pillars of our communities, of our sports clubs, executives of companies, influential figures, members of Althingi and even journalists and editors in chief. These are men with the power to define what normal is and what is over the top. It is very serious when this group goes insane. It is unique in the world that a nation drowns its companies in debt in order to double energy outputs and then double it again and disturb many areas in the environment in such a short time.  It is unique that a western nation assumes such risks and sacrifice as much for unclear and secret profits from doing business with American corporations. What Western nation would indebt itself to the amount of two million per person for such louts as Century or Alcoa?”

“The mob seems to detest nothing more than young, educated women who use words such as “professional” or “process”.”

“The decay of the Independence Party is best portrayed in the fact that Katrin Fjeldsted is moved aside. She is a well educated, logical, smart doctor and their only member of Althingi who questioned the insanity. Instead they bring out mad men like Jon Gunnarsson and Tryggvi Thor (Herbertsson) who are already punking Thjorsarver. All obstacles shall be removed”.

Icelandic households and consumer understand Martenson’s point on their own skin. They are the most indebted in the world. We have already withdrawn from our future bank accounts and are now finding them running increasingly low. And more people are realizing the insanity which Andri Snaer is describing. I heard of an Independence Party voter who almost started crying when he finally watched the Dreamland documentary this week and realized how he had been oblivious to what was really going on.

Unfortunately Icelanders find it hard to concentrate on the big issues in any debate. Icelandic females are hardly better than their insane males after all. They managed to take offence on the part of the mentally ill to Andri’s use of the words insane and madness. Icelanders are a nation of storytellers, but not philosophers. Many tend to go out of their way to miss a point.

But the insane males do not give up.  Today Tryggvi Thor Herbertsson’s reply arrived with Frettabladid. (Remember Tryggvi and his report with Frederic Mishkin which contributed more than almost anything else to delaying action being taken on the impending economic disaster.)

Aptly named the Alchemist, his article’s main point is;

“If production is not increased and there is no growth, then we can not improve the life of the disabled unless we take from something else. That is why we need to produce more today than yesterday”.

Chris Martenson would disagree with this thinking. But then again, he has not held the role of economic advisor to a government which lead its nation towards financial ruin.

Hopefully some will listen to Martenson, even if he is not local. Unfortunately there were no Icelandic politicians at his lecture.

That is insane.

PS: The picture on top accompanied a famous fable published in Morgunbladid years ago and named “Icelandic Mountainsales inc.” The legend goes that David Oddson used his influence to affect the employment prospects of the minister who wrote it, Orn Bardur Jonsson.

Related posts:

  1. Iceland = Dreamland
  2. Pillars of growth
  3. Reykjavik Energy Believes ISK Will Weaken More In Seven Years

No Empty Microphones For Jon Gnarr

Friday, September 17th, 2010

In the history of Icelandic politics, no person has ever had to answer as much for their words and actions as the Best Party’s Jon Gnarr.

And in the history of Icelandic politics, no person has ever answered as much for their words and actions as the Best Party’s Jon Gnarr.

I am really pleased that my vote went to the mayor and his party.

They have been a breath of fresh air into the stale career politics of the big four parties who don’t know how to deal with the novelty.

The Independence Party’s Hanna Birna Kristjansdottir lurks with a knife behind his back. The Left Green Soley Tomasdottir pelters him with cheap shots from her glass house.

Morgunbladid literally bullies Jon Gnarr. If he were to save an old lady from drowning in the Reykjavik pond, the paper would criticize him for scaring the ducks.

Channel 2 asks him what kind of porn he watches but does not ask Bjarni Benediktsson how much his failed business have cost the taxpayers.

The Grapevine’s interview before the election was remarkable for the unusually sharp conversation between a journalist and a politician. That such an enquiry should be spent on the newcomer, the guy who is standing up to the failed system, the satirist, the comedian and not the corrupt, career politicians also shows that the media continues to allow the big four to play it like puppets.

While Soley Tomasdottir tries to score cheap points on outrage over a sarcastic joke made on porn, Jon Gnarr protests human rights abuse in China.

While Hanna Birna Kristjansdottir tried her utmost to distinct herself from her party in the election and postponed necessary reform at Reykjavik Energy to score better in the polls, Jon Gnarr went to work with a big broom and executed the difficult decision of raising energy prices 20%.

While Jon Gnarr wins elections, Oddny Sturludottir gets to stand behind him in a photo op.

Unlike the big four, Jon Gnarr does not speak into empty microphones.

Related posts:

  1. The luckiest people alive
  2. Longing For Another Kiss of Death
  3. Water From The Empty Bucket

While You Were Sleeping…

Thursday, September 16th, 2010

…interesting things were happening in the sub-divisions of the Independence Party.

A new group ascended to power within Heimdallur, its Reykjavik youth organization last night.

It has been hailed by the Icelandic “Fox News”, the website AMX.is as “idealistic people with a clean slate” lead by newcomer Hlynur Jonsson.

Alarm bells!

Behind AMX.is are Milton Friedman’s most loyal disciple Hannes Holmsteinn Gissurarson, chairman of Icelandic libertarians Fridbjorn Orri Ketilsson, former minister Bjorn Bjarnason and former Morgunbladid editor Styrmir Gunnarsson. All revolve around the sun which is David Oddson, and Morgunbladid does not spare the kind words towards AMX’s propaganda.

AMX’s take on the two groups fighting for influence within Heimdallur is unequivocal. The newcomers are clean of all the corruption surrounding the outgoing clique, the group connected to the website Deiglan and sometimes called Geir’s-arm to explain their supposed more liberal stance (and relations as his daughter and stepson are both involved) displayed by its members.

AMX managed this week to connect a couple of young ladder-climbers from the Deigla group to the massive grants received by the Independence Party from FL Group and Landsbankinn in 2006 and IceSave. So David’s re-writing of history is in full blown swing.   Or do you really believe as AMX would like you to that Andri Ottarsson, a young guy in his twenties groomed for success with a couple of months in the job could have pulled off the biggest revealed donations in Icelandic history? Or that Thorlindur Kjartansson, an obedient party puppy whose job at Landsbankinn was to market IceSave, was responsible for the saving account’s existence?

The truth hits closer to home, more exactly in the vicinity of David’s close ally Kjartan Gunnarsson who at the time was the party’s CEO and on the board of Landsbankinn.

The Heimdallur revolt is similar to the revolt which happened in the party’s National Youth Organization last winter where a “new and clean” group hijacked the elections. The Deigla group thought it had gotten away with hiding the general meeting away in the west-fjords and appeared set for an election victory when a plane arrived in the small town with a large group of “new, young and clean” pretenders to the throne. Someone paid for their flight and all their membership dues on the spot and their candidate strolled to victory.

Ah, the wonders of democracy.

That candidate, Olafur Orn Nielsen is a Morgunbladid employee, a libertarian activist and very much favourable to David’s group.

The new and clean leader of Heimdallur is Hlynur Jonsson, the son of Jon Steinar Gunnlaugsson who is one of David’s oldest friends and allies. Obviously people should not be held accountable for the sins of their fathers but the signs are ominous. Ignore these developments at your peril.

The question Independence Party members soon have to ask themselves is whether to prepare for David’s return as his libertarian group is actively securing its influence within the party.

a) Do they succumb and play along?

b) Do they have the bravery in them to take the fight?

c) Or do they do the rest of the nation the favor of marginalizing the Independence Party on the fringe by leaving en masse?

Related posts:

  1. InDefence Honored By Young Independence Party Members
  2. The Independence Party’s Successful Projection Of Baugur and IceSave
  3. Silly Debate On IceSave

The Islands Mountain Glacier Volcano (Video)

Tuesday, April 20th, 2010

Quit your whining over the Icelandic volcano, The Islands Mountain Glacier Volcano.

As Kenyan farmers lose billions in revenue, as British office workers don‘t get their fruit salad for breakfast, as Pep Guardiola and Rafa Benitez whine their ways to Milan and Madrid by bus and train this eruption can act as a serious kick up the scientific and innovation community‘s behinds.

As with so much else in the nineties and the noughties, the most celebrated innovations of our times might not necessarily be the ones that do us the most good in the long run. Viagra, Facebook, iPod are all good for their use but we live on a perilous planet, where the quest for instant gratification (literally in the case of Viagra) often takes precedent over long term future planning.

Little has changed of note in the airline industry for decades. The cry for the opening of potentially dangerous airspace by the airline lobby shows how willing it is to play chicken with its planes, passengers and staff because of profit. Maybe the precautions have been too strict somewhere but the old adage of running with the volcano experts away from danger instead of towards it does not seem to apply where quarterly earnings are the major benchmark.

The fact that the volcano is actually contributing to a „greener“ planet by halting  European flights also sends two swollen thumbs down the way of those who neglect to act on global warming.

So serious thought must be given to how the world plans to continue its travel and trade operating in the case of a major eruption. This is a great chance for innovators and scientists to push for change.

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Volcanolypse 2010
www.thedailyshow.com
Daily Show Full Episodes Political Humor Tea Party

Related posts:

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“Temporary” Resignations To Clear “Good” Names

Saturday, April 17th, 2010

Illugi Gunnarsson and Bjorgvni G. Sigurdsson resign as MP’s. Not because they have done something wrong but because they want an opportunity to clear their “good names”.

That is also what Bjorn Ingi Hrafnsson said when he stepped down as editor of Pressan.is

Now Thorgerdur Katrin Gunnarsdottir has also resigned…”temporarily”.

The lessons learned for the rest of us should be that they have no shame. And that maybe the rest of the corrupt politicians need to have their homes under siege before resigning?

Thorgerdur’s husband Kristjan Arason, a CEO of Kaupthing transferred billions in debt into a company a few days after she was warned in a government meeting about the impending situation. According to them, they are safe and financially sound afterwards. What kind of voters are going to let her back into the political arena?

Photo: A trustworthy economic management is the biggest welfare issue when all things are considered. – Geir Haarde and Thorgerdur Katrin Gunnarsdottir in an Independence Party ad for the 2007 election.

Related posts:

  1. Us And Them
  2. Bank Corruption As Bad As It Gets
  3. More resignations

“Temporary” Resignations To Clear “Good” Names

Saturday, April 17th, 2010

Illugi Gunnarsson and Bjorgvni G. Sigurdsson resign as MP’s. Not because they have done something wrong but because they want an opportunity to clear their “good names”.

That is also what Bjorn Ingi Hrafnsson said when he stepped down as editor of Pressan.is

Now Thorgerdur Katrin Gunnarsdottir has also resigned…”temporarily”.

The lessons learned for the rest of us should be that they have no shame. And that maybe the rest of the corrupt politicians need to have their homes under siege before resigning?

Thorgerdur’s husband Kristjan Arason, a CEO of Kaupthing transferred billions in debt into a company a few days after she was warned in a government meeting about the impending situation. According to them, they are safe and financially sound afterwards. What kind of voters are going to let her back into the political arena?

Photo: A trustworthy economic management is the biggest welfare issue when all things are considered. – Geir Haarde and Thorgerdur Katrin Gunnarsdottir in an Independence Party ad for the 2007 election.

Related posts:

  1. Us And Them
  2. Bank Corruption As Bad As It Gets
  3. Generational gap

Five Dimensions of Icelandic Shelter Stability – Concerns and Reactions

Saturday, April 17th, 2010

Currently there appears to be an undercurrent of social instability not seen in Iceland in modern times.  To respond, we should examine five dimensions on the security spectrum which can be considered to be especially revelant in Iceland in the present.

These dimensions are:

-          Traditional Military

-          Economic vulnerability and  instability

-          Breakdown of order, no “rule of law”.

-          Social vulnerability and instability, disorder, alienation,

-          Uncontrolled migration, refugeeism, IDPs

These five dimensions are all especially relevant to Icelanders in the wake of the economic disaster of 2008. It can be argued that effects of the crash were especially potent because Iceland had pursued a reckless economic strategy, without having secured proper safeguards by way of international co-operation. The result is a social vulnerability unprecedented in modern times.

Shelter stability

Although there is a broader view to be taken of Iceland’s security concerns, together these dimensions can form a chain of consequences which need to be adressed in Iceland’s current state. Together they can be examined and “packaged” as Shelter Stability concerns. Traditional military and economic security are pillars which need to be protected and upheld in order not to become the causes which consenquate a breakdown of the other three dimensions of order, social instability and migration/internal displacement.

Although a tradtitional domino effect might see the first one in line push the other ones in a straigth line towards a collapse it might be more useful to couple the military and economic concerns together as the possible catalysts for the other three. Military and economic stability enhances the strenght within the others. But if one or both of the former crumble then the others are in danger too. A small nation like Iceland, with a miniscule economy, a tiny currency and militarily dependent upon others is especially vulnerable to shifting winds of change in world politics and the global economy.

Traditional Military

From the early days of the republic, Iceland had been provided with the necessary military support it needed by the United States of America. The US felt its presence was necessary to first counter Nazi and then Cold War threats to its mainland from the North Atlantic. Iceland benefitted handsomely from the arrangement through the presence of the world’s strongest military power as well as the financial assistance provided through the Marshall plan which helped Iceland take a giant step from a third world agricultural society to a modern state in the twentieth century. After the collapse of the Berlin wall in 1989 and the accompanying fall of communism in Eastern Europe and the Soviet States, global security concerns moved away from the North Atlantic to different parts of the world. That point at the end of history as proposed by Francis Fukuyama seemed to signal the beginning of the end of US military presence in Iceland and so it became that in 2006 the last fighter jets departed from Iceland.

Iceland was a founding member of NATO in 1949 and the organization assumed the responsibility of providing the country with the required military security. Iceland now runs the Icelandic Air Defence System (IADS) which is a part of the NATO Integrated Air Defence System (NATINADS). Apart from air policing from NATO, Iceland does not have a direct military presence anymore. What the US had provided though was not only military or economic security but also support on the international stage, as was evident by the Cod Wars between Iceland and the United Kingdom. In turn Iceland would more often than not support the US’s global endeavours, most notoriously as a member of the Coalition of the Willing which supported the US decisison to invade Iraq in 2003. The special relationship between the two nations epitomised tit for tat politics on the international level. When Iceland was no longer militarily important for the US, the extended support on which it could count on evaporated as well.

Although armed conflict is currently constricted to different parts of the world, there is no reason for the country to take the status quo for granted.  The Risk Assessment Report from 2008 does not consider Iceland’s participation in the Coaltion of the Willing to have upped the risk for terrorism, and downplays the possibilities of such acts being carried out on Icelandic soil. Iceland similarly does not have anything but basic contingency plans for WMD attacks within its borders or in the vicinity, and concentrates on suppording the Interntional Atomic Energy Agency (IAEA). But it does touch on the changing nature of global interests, such as possible show of ambition from Russia and in Iceland’s case, especially in the High North. As shipping routes could possibly open due to global warming, the rush to secure interests by larger nations could affect Iceland directly. A possible NATO expansion towards Russian borders could also provoke a harsh response from Moscow.

Economic vulnerability and  instability

In October 2008 an economic crash in Iceland wiped out three of the countries largest banks. The asset depreaciation in Iceland amounted to 280 percent of nominal GDP, being nearly five times larger than the second biggest depreaciation of all times which happened in Indonesia in 1998. Scheduled for an earlier release, the Risk Assessment Report ended up having to be re-written with a massive increase in the emphasis on economic security. The vulnerability of a small state with an open economy is clear throughout the report. “The free transfer of capital and the permission obtained by Icelandic banks to operate branches in other countries within the EEA, enabled them to borrow from other banks and accept savings in foreign currencies and therefore experience a rapid growth. But all supervision was in the hands of domestic entities.”

In 1993 Iceland had joined the European Economic Area  (EEA) to gain access to the markets of Europe. But while opportunites beckoned for Icelandic businesses, economic policy and management proved hard to control. “The Central Bank here was small and weak and so was the state treasury. The state’s finances were admittedly just about free of any foreign debt but interests remained high and caused foreign capital (Glacier Bonds for example) to flow into the country and push the currency up. It lead to a purchasing power which had no base in reality”.

The Icelandic economy would have imploded without the global economic crisis which started with homeowners defaulting on their mortgages in the United States in 2007. As money markets shut their doors and there was no more borrowed money available to support the ill-fated bubble, Iceland’s crisis hit home hard. What then followed caught many Icelanders by surprise. All of a sudden the country appeared to have few friends in the world who were willing and ready to help. The Central Bank sought assistance from Washington but was rejected, and the Nordic countries were surprisingly slow to come to the rescue. Of course everyone was busy dealing with the crisis in their own backyard but Iceland seemed to have no safe haven to turn to, which it had hitherto counted on the US to provide. With its tail behind its legs, Iceland turned towards the International Monetary Fund (IMF), as had been suggested to the Central Bank by the European Central Bank earlier in 2008 and described by US Treasury Secretary Timothy Geithner  as the “kiss of death”.

Then there was the matter of the IceSave accounts which stripped thousands of individuals, charities and municipalities in the UK and the Netherlands of their savings. Landsbankinn’s online savings account had proven popular for offering the highest rates of return but the money was lended out at the other end, usually against collateral of little or no value. The Icelandic government had guaranteed all savings in Icelandic banks but not in their foreign branches on the eve of the economic crash. This and the subsequent failure to conclude an agreement with the Dutch and the British governments has appeared to block Iceland’s assistance from the IMF. Dominique Strauss-Kahn, the managing director of the IMF said on March 30, 2010 that the board needed a majority of votes to approve futher assistance, and he was not sure if it was guaranteed. “I have always said Icesave is not a condition for the IMF, but we need to have a majority in the board. If the Icesave question is solved, I’m sure there will be a majority. If the Icesave question is not totally solved, I don’t know if there’ll be a majority on the board.”

So it is that in the spring of 2010, Iceland finds itself in an economic and military limbo. A small state swimming alone in the sea of international turmoil for the time being. While Iceland is still in the aftershock of the events of 2008, it is interesting to examine the possible effects.

Social unrest

Breakdown of order, no “rule of law”.

Interestingly the Risk Assessment Report does not mention breakdown of order, or the possibility of internal civil unrest. But in January 2009, an angry crowd protested (mostly peacefully) outside Althingi and other official buildings until the government was forced to resign, an unimaginable scenario in Iceland just a few months earlier. Although payment systems withstood the pressure of an economic crash and daily operations of the society were not interrupted, the public faced with great uncertainty showed unexpected volatility and willingess to display hostility towards officials and the government.

It appears as if the business-blocks which controlled the banks were milking them by lending to themselves with little or nothing of worth backing those loans up. This happened with political parties on the watch which had actively sought funding from these very business blocks. One and a half year later, no individuals from the business side or the political side have been charged with wrongdoings or inappropriate behavior. The “broken windows” theory of urban decline states that minor forms of pulic disorder can lead to serious crime and a downward spiral of decay. In matters of urban decay the visual cues are graffiti, public disorder, trash and ill-kept properties which indicate that residents are indifferent to their neighborhood. Applying this to society as a whole, citizens who get the feeling that crime and injustice goes unpunished may become indifferent towards the social order.

Social vulnerability and instability, disorder, alienation,

At a seminar at Bifröst University in February 2010, political science professor Ólafur Þ. Harðarson from the University of Iceland disclosed his findings that 20% of voters polled had participated in demonstrations in the last few years, a very high number in his opinion. His findings also indicate that the public has become slightly more interested in politics, but more disillusioned with the political parties. This indicates an alienation from the democratic process and the political elite. Trust in the parties is at an all time low according to Ólafur and it emphasises the need for reform in the political arena. With increased alienation, social vulnerability rises.

Uncontrolled migration, refugeeism, IDPs

According to Statistics Iceland, the population of the country decreased for the first time since 1889 in the twelwe month period between January 1, 2009 and January 1, 2010, from 319,368 to 317,630 (Statistics Iceland, 2010). For a country which has enjoyed a long streak of increase in its population and an annual average growth of 1,6% in the past five years, this is something of an anomaly and prescriped by most as due to the effects of the economic crisis.

Icelanders are seeking opportunities abroad, in Canada and Norway for example. The benefits of collecting wages in a foreign currency are obvious if your debts are in Icelandic Krona’s which has plummeted more than one hundred percent since 2007. Another benefit is escaping the decrease in social welfare which comes with the large national debt. If scores of able citizens leave the country at a dire moment then the recovery is going to be harder and take longer time. If young people and skilled workers sense that their opportunities are better abroad then the long term social consequences of the economic crash might end up being costlier than anyone dare calculate.

Challenges and solutions

Comparing Iceland’s general approach to security with that of other Nordic countries, professor Alyson Bailes and Þröstur Freyr Gylfason observe what stands out for most observers is the relative detachment of the general population and the dislike for preparedness and planning.

This description perhaps strikes to the heart of the matter on what Icelanders can generally improve to tackle these five dimensions of security? Bailes and Gylfason remarked that Iceland presented an “intriguing arena to “test drive” and further probe the qualities of, the social security concept.” Pointing out the need for reassessment and new approaches to security in the wake of the US military leaving, the authors are concerned with the lackadaisical approach to forward planning in Iceland.

Certainly, Iceland is hardly alone amongst small states in the way that it needs to face its security dilemma in a pro-active way. According to professor Baldur Þórhallson, Iceland was the only small state within Europe that had not secured for itself a political or economic shelter was also first state to fall victim to the economic crisis of 2008. “A small state like Iceland, needs a strong economic shelter provided by powerful neighbors or international organizations to withstand international economic turmoil and protect its interests in the international community.”

Small states like Iceland need a cohesive strategy in its security planning, more even than most others according to Bailes in another paper. So to wrap up the discussion on the five security dimensions are suggestions on five areas where Iceland could begin work to improve its shelter stability outlook.

1) Strengthen the seperation of powers

By neglecting constitutional reform since the beginning of the republic, Icelandic politicians have stood idly by while the executive powers of the government have grown disproportionally against the legislative and judicial branches. The executive branch is traditionally formed by the majority in the legislative branch, and until 2009 it was almost unheard of that all ministers did not occupy a place in both. The executive branch also appoints judges to power positions in the judicial branch and therefore it can be argued that it holds an advantage over both, whereas it can exert pressure on or reward those who owe their postions to towing a party line.

A constitutional assembly scheduled for late 2010 is a step in the right direction and hopefully it will strengthen the seperation, perhaps by making it impossible for individuals to occupy seats in two branches at the same time, and/or holding seperate elections for each branch.

2) Pro-actively seek further international co-operation

“Whereas most other nations have modified their implicit concept of sovereignty to include as an important component the right to participate in international organizations and sit at the table where regional and global decisions are being made, a majority of Icelanders have stuck to an older notion of sovereignty as freedom from outside infl uence—freedom to remain “special” in the ranks of nations.” – Robert Wade, professor at London School of Economics.

So what options are there on the table for Iceland? Firstly a dedicated approach towards European Union membership talks with the goal of full participation. Membership of the EU and participation in the common currency would provide Iceland with a economic shelter  likely to help it withstand storms in global financial markets. According the Thorvald Stoltenberg’s report to the Nordic foreign ministers, Nordic Cooperation on Foreign and Security Policy from 2009 there is a widespread desire within all Nordic countries to strenghten their cooperation on military security, as well as larger cooperation with NATO and the EU. Finland, Sweden and Denmark are all members of the EU, while Norway’s oil fund and NATO membership enables it the financial  and military security to stand outside the union, but with participation the EEA. Iceland’s military security position would be greatly enhanced as a fully fledged participant in a Nordic’s security initiative and as a member of NATO.

Membership in the EU would enhance that dimension further, as well as the economic security dimension. Scholars like Eirikur Bergmann have argued for the enhancement of Iceland’s sovereignty by taking a pro-active approach.

3) Build, support and listen to entities which can produce a full range analysis and outside the box thinking

In the computer industry, hacking contests are a big deal when it comes to developing computer security. Instead of chasing down hackers, they are invited to attack the systems which are being tested, with rewards on offer for those who can find faults which can be exposed. In 2002, the government of David Oddson dismantled the National Economic Institute which had been entrusted with the task of monitoring the national economic climate and performance and performing econimic research with the aim of advising the government and Alþingi in economic affairs. While many of the institute’s tasks were transferred to Statistics Iceland, many bemoaned the absence of a seperate, critical entity when the economic collapse was impending. A resurrection of such an institute would be a good move, as well as the conception of a National Security Institute, focusing on monitoring the security dimensions relevant and irrevelant to Iceland at any given time, thinking outside the box to challenge pre-fixed ideas of security and possible risks.

4) Engage in active and open discussion and debate with non-state actors

Non-government organizations play an important role in providing checks and balances towards government policies, action and inaction. When Richard Thomas, an analyst for Merril Lynch criticized the state of the Icelandic banks and the government’s policy towards them in June 2008, then minister of education, Þorgerður Katrín Gunnarsdóttir questioned his motives in the media and suggested he needed re-educating. This was similar to the response from Icelandic officials and financial institutes when Danish newspapers and analytical institutions criticized the business model of the Icelandic banks. The Icelandic government,and for that matter the Icelandic media needs to be more welcoming towards critical debate and discussion with non-state actors such as foreign and domestic media, financial analysts, academics, charities and organizations. Those actors often operate with a focus and knowledge on certain issues, which can be useful for state actors concerned with a larger picture. A country which takes such discussions seriously can do wonders for its reputation if people get the feeling that the governing body listens to concerns just as well as praise.

5) Emphasis on critical thought and forward planning

Lastly, it is important for a country in need of reform to  enhance the freedom Immanuel Kant emphasised, which is to use reason publicly in all matters. Perhaps the most ambitious but necessary step is to enhance the role of critical thought in Icelandic society. Through the education system, students should be purposefully taught to apply critical thought to matters small and large. It would be more likely to deliver more alert citizens into society and into private and public workplaces. An Icelandic society built upon values which emphasise critical thought would be more likely to learn from its mistakes and prepare for the future.

Related posts:

  1. A “Special” Iceland
  2. EU Membership – The Time and The Place of the Social Democrats
  3. The taxpayer’s deep pockets

Five Dimensions of Icelandic Shelter Stability – Concerns and Reactions

Saturday, April 17th, 2010

Currently there appears to be an undercurrent of social instability not seen in Iceland in modern times.  To respond, we should examine five dimensions on the security spectrum which can be considered to be especially revelant in Iceland in the present.

These dimensions are:

-          Traditional Military

-          Economic vulnerability and  instability

-          Breakdown of order, no “rule of law”.

-          Social vulnerability and instability, disorder, alienation,

-          Uncontrolled migration, refugeeism, IDPs

These five dimensions are all especially relevant to Icelanders in the wake of the economic disaster of 2008. It can be argued that effects of the crash were especially potent because Iceland had pursued a reckless economic strategy, without having secured proper safeguards by way of international co-operation. The result is a social vulnerability unprecedented in modern times.

Shelter stability

Although there is a broader view to be taken of Iceland’s security concerns, together these dimensions can form a chain of consequences which need to be adressed in Iceland’s current state. Together they can be examined and “packaged” as Shelter Stability concerns. Traditional military and economic security are pillars which need to be protected and upheld in order not to become the causes which consenquate a breakdown of the other three dimensions of order, social instability and migration/internal displacement.

Although a tradtitional domino effect might see the first one in line push the other ones in a straigth line towards a collapse it might be more useful to couple the military and economic concerns together as the possible catalysts for the other three. Military and economic stability enhances the strenght within the others. But if one or both of the former crumble then the others are in danger too. A small nation like Iceland, with a miniscule economy, a tiny currency and militarily dependent upon others is especially vulnerable to shifting winds of change in world politics and the global economy.

Traditional Military

From the early days of the republic, Iceland had been provided with the necessary military support it needed by the United States of America. The US felt its presence was necessary to first counter Nazi and then Cold War threats to its mainland from the North Atlantic. Iceland benefitted handsomely from the arrangement through the presence of the world’s strongest military power as well as the financial assistance provided through the Marshall plan which helped Iceland take a giant step from a third world agricultural society to a modern state in the twentieth century. After the collapse of the Berlin wall in 1989 and the accompanying fall of communism in Eastern Europe and the Soviet States, global security concerns moved away from the North Atlantic to different parts of the world. That point at the end of history as proposed by Francis Fukuyama seemed to signal the beginning of the end of US military presence in Iceland and so it became that in 2006 the last fighter jets departed from Iceland.

Iceland was a founding member of NATO in 1949 and the organization assumed the responsibility of providing the country with the required military security. Iceland now runs the Icelandic Air Defence System (IADS) which is a part of the NATO Integrated Air Defence System (NATINADS). Apart from air policing from NATO, Iceland does not have a direct military presence anymore. What the US had provided though was not only military or economic security but also support on the international stage, as was evident by the Cod Wars between Iceland and the United Kingdom. In turn Iceland would more often than not support the US’s global endeavours, most notoriously as a member of the Coalition of the Willing which supported the US decisison to invade Iraq in 2003. The special relationship between the two nations epitomised tit for tat politics on the international level. When Iceland was no longer militarily important for the US, the extended support on which it could count on evaporated as well.

Although armed conflict is currently constricted to different parts of the world, there is no reason for the country to take the status quo for granted.  The Risk Assessment Report from 2008 does not consider Iceland’s participation in the Coaltion of the Willing to have upped the risk for terrorism, and downplays the possibilities of such acts being carried out on Icelandic soil. Iceland similarly does not have anything but basic contingency plans for WMD attacks within its borders or in the vicinity, and concentrates on suppording the Interntional Atomic Energy Agency (IAEA). But it does touch on the changing nature of global interests, such as possible show of ambition from Russia and in Iceland’s case, especially in the High North. As shipping routes could possibly open due to global warming, the rush to secure interests by larger nations could affect Iceland directly. A possible NATO expansion towards Russian borders could also provoke a harsh response from Moscow.

Economic vulnerability and  instability

In October 2008 an economic crash in Iceland wiped out three of the countries largest banks. The asset depreaciation in Iceland amounted to 280 percent of nominal GDP, being nearly five times larger than the second biggest depreaciation of all times which happened in Indonesia in 1998. Scheduled for an earlier release, the Risk Assessment Report ended up having to be re-written with a massive increase in the emphasis on economic security. The vulnerability of a small state with an open economy is clear throughout the report. “The free transfer of capital and the permission obtained by Icelandic banks to operate branches in other countries within the EEA, enabled them to borrow from other banks and accept savings in foreign currencies and therefore experience a rapid growth. But all supervision was in the hands of domestic entities.”

In 1993 Iceland had joined the European Economic Area  (EEA) to gain access to the markets of Europe. But while opportunites beckoned for Icelandic businesses, economic policy and management proved hard to control. “The Central Bank here was small and weak and so was the state treasury. The state’s finances were admittedly just about free of any foreign debt but interests remained high and caused foreign capital (Glacier Bonds for example) to flow into the country and push the currency up. It lead to a purchasing power which had no base in reality”.

The Icelandic economy would have imploded without the global economic crisis which started with homeowners defaulting on their mortgages in the United States in 2007. As money markets shut their doors and there was no more borrowed money available to support the ill-fated bubble, Iceland’s crisis hit home hard. What then followed caught many Icelanders by surprise. All of a sudden the country appeared to have few friends in the world who were willing and ready to help. The Central Bank sought assistance from Washington but was rejected, and the Nordic countries were surprisingly slow to come to the rescue. Of course everyone was busy dealing with the crisis in their own backyard but Iceland seemed to have no safe haven to turn to, which it had hitherto counted on the US to provide. With its tail behind its legs, Iceland turned towards the International Monetary Fund (IMF), as had been suggested to the Central Bank by the European Central Bank earlier in 2008 and described by US Treasury Secretary Timothy Geithner  as the “kiss of death”.

Then there was the matter of the IceSave accounts which stripped thousands of individuals, charities and municipalities in the UK and the Netherlands of their savings. Landsbankinn’s online savings account had proven popular for offering the highest rates of return but the money was lended out at the other end, usually against collateral of little or no value. The Icelandic government had guaranteed all savings in Icelandic banks but not in their foreign branches on the eve of the economic crash. This and the subsequent failure to conclude an agreement with the Dutch and the British governments has appeared to block Iceland’s assistance from the IMF. Dominique Strauss-Kahn, the managing director of the IMF said on March 30, 2010 that the board needed a majority of votes to approve futher assistance, and he was not sure if it was guaranteed. “I have always said Icesave is not a condition for the IMF, but we need to have a majority in the board. If the Icesave question is solved, I’m sure there will be a majority. If the Icesave question is not totally solved, I don’t know if there’ll be a majority on the board.”

So it is that in the spring of 2010, Iceland finds itself in an economic and military limbo. A small state swimming alone in the sea of international turmoil for the time being. While Iceland is still in the aftershock of the events of 2008, it is interesting to examine the possible effects.

Social unrest

Breakdown of order, no “rule of law”.

Interestingly the Risk Assessment Report does not mention breakdown of order, or the possibility of internal civil unrest. But in January 2009, an angry crowd protested (mostly peacefully) outside Althingi and other official buildings until the government was forced to resign, an unimaginable scenario in Iceland just a few months earlier. Although payment systems withstood the pressure of an economic crash and daily operations of the society were not interrupted, the public faced with great uncertainty showed unexpected volatility and willingess to display hostility towards officials and the government.

It appears as if the business-blocks which controlled the banks were milking them by lending to themselves with little or nothing of worth backing those loans up. This happened with political parties on the watch which had actively sought funding from these very business blocks. One and a half year later, no individuals from the business side or the political side have been charged with wrongdoings or inappropriate behavior. The “broken windows” theory of urban decline states that minor forms of pulic disorder can lead to serious crime and a downward spiral of decay. In matters of urban decay the visual cues are graffiti, public disorder, trash and ill-kept properties which indicate that residents are indifferent to their neighborhood. Applying this to society as a whole, citizens who get the feeling that crime and injustice goes unpunished may become indifferent towards the social order.

Social vulnerability and instability, disorder, alienation,

At a seminar at Bifröst University in February 2010, political science professor Ólafur Þ. Harðarson from the University of Iceland disclosed his findings that 20% of voters polled had participated in demonstrations in the last few years, a very high number in his opinion. His findings also indicate that the public has become slightly more interested in politics, but more disillusioned with the political parties. This indicates an alienation from the democratic process and the political elite. Trust in the parties is at an all time low according to Ólafur and it emphasises the need for reform in the political arena. With increased alienation, social vulnerability rises.

Uncontrolled migration, refugeeism, IDPs

According to Statistics Iceland, the population of the country decreased for the first time since 1889 in the twelwe month period between January 1, 2009 and January 1, 2010, from 319,368 to 317,630 (Statistics Iceland, 2010). For a country which has enjoyed a long streak of increase in its population and an annual average growth of 1,6% in the past five years, this is something of an anomaly and prescriped by most as due to the effects of the economic crisis.

Icelanders are seeking opportunities abroad, in Canada and Norway for example. The benefits of collecting wages in a foreign currency are obvious if your debts are in Icelandic Krona’s which has plummeted more than one hundred percent since 2007. Another benefit is escaping the decrease in social welfare which comes with the large national debt. If scores of able citizens leave the country at a dire moment then the recovery is going to be harder and take longer time. If young people and skilled workers sense that their opportunities are better abroad then the long term social consequences of the economic crash might end up being costlier than anyone dare calculate.

Challenges and solutions

Comparing Iceland’s general approach to security with that of other Nordic countries, professor Alyson Bailes and Þröstur Freyr Gylfason observe what stands out for most observers is the relative detachment of the general population and the dislike for preparedness and planning.

This description perhaps strikes to the heart of the matter on what Icelanders can generally improve to tackle these five dimensions of security? Bailes and Gylfason remarked that Iceland presented an “intriguing arena to “test drive” and further probe the qualities of, the social security concept.” Pointing out the need for reassessment and new approaches to security in the wake of the US military leaving, the authors are concerned with the lackadaisical approach to forward planning in Iceland.

Certainly, Iceland is hardly alone amongst small states in the way that it needs to face its security dilemma in a pro-active way. According to professor Baldur Þórhallson, Iceland was the only small state within Europe that had not secured for itself a political or economic shelter was also first state to fall victim to the economic crisis of 2008. “A small state like Iceland, needs a strong economic shelter provided by powerful neighbors or international organizations to withstand international economic turmoil and protect its interests in the international community.”

Small states like Iceland need a cohesive strategy in its security planning, more even than most others according to Bailes in another paper. So to wrap up the discussion on the five security dimensions are suggestions on five areas where Iceland could begin work to improve its shelter stability outlook.

1) Strengthen the seperation of powers

By neglecting constitutional reform since the beginning of the republic, Icelandic politicians have stood idly by while the executive powers of the government have grown disproportionally against the legislative and judicial branches. The executive branch is traditionally formed by the majority in the legislative branch, and until 2009 it was almost unheard of that all ministers did not occupy a place in both. The executive branch also appoints judges to power positions in the judicial branch and therefore it can be argued that it holds an advantage over both, whereas it can exert pressure on or reward those who owe their postions to towing a party line.

A constitutional assembly scheduled for late 2010 is a step in the right direction and hopefully it will strengthen the seperation, perhaps by making it impossible for individuals to occupy seats in two branches at the same time, and/or holding seperate elections for each branch.

2) Pro-actively seek further international co-operation

“Whereas most other nations have modified their implicit concept of sovereignty to include as an important component the right to participate in international organizations and sit at the table where regional and global decisions are being made, a majority of Icelanders have stuck to an older notion of sovereignty as freedom from outside infl uence—freedom to remain “special” in the ranks of nations.” – Robert Wade, professor at London School of Economics.

So what options are there on the table for Iceland? Firstly a dedicated approach towards European Union membership talks with the goal of full participation. Membership of the EU and participation in the common currency would provide Iceland with a economic shelter  likely to help it withstand storms in global financial markets. According the Thorvald Stoltenberg’s report to the Nordic foreign ministers, Nordic Cooperation on Foreign and Security Policy from 2009 there is a widespread desire within all Nordic countries to strenghten their cooperation on military security, as well as larger cooperation with NATO and the EU. Finland, Sweden and Denmark are all members of the EU, while Norway’s oil fund and NATO membership enables it the financial  and military security to stand outside the union, but with participation the EEA. Iceland’s military security position would be greatly enhanced as a fully fledged participant in a Nordic’s security initiative and as a member of NATO.

Membership in the EU would enhance that dimension further, as well as the economic security dimension. Scholars like Eirikur Bergmann have argued for the enhancement of Iceland’s sovereignty by taking a pro-active approach.

3) Build, support and listen to entities which can produce a full range analysis and outside the box thinking

In the computer industry, hacking contests are a big deal when it comes to developing computer security. Instead of chasing down hackers, they are invited to attack the systems which are being tested, with rewards on offer for those who can find faults which can be exposed. In 2002, the government of David Oddson dismantled the National Economic Institute which had been entrusted with the task of monitoring the national economic climate and performance and performing econimic research with the aim of advising the government and Alþingi in economic affairs. While many of the institute’s tasks were transferred to Statistics Iceland, many bemoaned the absence of a seperate, critical entity when the economic collapse was impending. A resurrection of such an institute would be a good move, as well as the conception of a National Security Institute, focusing on monitoring the security dimensions relevant and irrevelant to Iceland at any given time, thinking outside the box to challenge pre-fixed ideas of security and possible risks.

4) Engage in active and open discussion and debate with non-state actors

Non-government organizations play an important role in providing checks and balances towards government policies, action and inaction. When Richard Thomas, an analyst for Merril Lynch criticized the state of the Icelandic banks and the government’s policy towards them in June 2008, then minister of education, Þorgerður Katrín Gunnarsdóttir questioned his motives in the media and suggested he needed re-educating. This was similar to the response from Icelandic officials and financial institutes when Danish newspapers and analytical institutions criticized the business model of the Icelandic banks. The Icelandic government,and for that matter the Icelandic media needs to be more welcoming towards critical debate and discussion with non-state actors such as foreign and domestic media, financial analysts, academics, charities and organizations. Those actors often operate with a focus and knowledge on certain issues, which can be useful for state actors concerned with a larger picture. A country which takes such discussions seriously can do wonders for its reputation if people get the feeling that the governing body listens to concerns just as well as praise.

5) Emphasis on critical thought and forward planning

Lastly, it is important for a country in need of reform to  enhance the freedom Immanuel Kant emphasised, which is to use reason publicly in all matters. Perhaps the most ambitious but necessary step is to enhance the role of critical thought in Icelandic society. Through the education system, students should be purposefully taught to apply critical thought to matters small and large. It would be more likely to deliver more alert citizens into society and into private and public workplaces. An Icelandic society built upon values which emphasise critical thought would be more likely to learn from its mistakes and prepare for the future.

Related posts:

  1. A “Special” Iceland
  2. EU Membership – The Time and The Place of the Social Democrats
  3. The taxpayer’s deep pockets


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