Iceland was right all the way

Scofflaw

Cavehill Red wrote: »

Only the simplest of analysts (some Irish journalists and politicians currently among them) would argue that "we should have done what Iceland did" without accommodating the different circumstances of the two nations.
The value of commentators like Davidsdottir is that they unveil the myth and show that Iceland didn't do what such analysts think they did for starters, and secondly that what they did do has not had universally positive consequences. In other words, they correct the fairy tale narrative.

Sure - and indeed Davidsdottir offers regular correctives to some of those common myths. Unfortunately, she does rather swallow uncritically some of the myths about Ireland.

Cavehill Red wrote: »

That said, it is just as preposterous a notion as the "we should have done what Iceland did(n't)" fairytale to swing to the opposite end of the pendulum and conclude that we have nothing to learn from Iceland's experience, either at the time of the crisis or indeed today.

And I would agree - but most analysts are in need of correction, first on Iceland's myths, and then on Ireland's myths, before you ca learn anything from their comparisons bar the dangers of mythology in public discourse.

Cavehill Red wrote: »

I'm going to pass on your invitation to speculate on alternative histories, tempting though that is, and attempt to look at where we are now. Are there elements of the Icelandic experience we could usefully seek to emulate? Undoubtedly. Hard negotiation with bank creditors, a limited debt relief programme for those perma-submerged by unpayable mortgages, prosecution of errant bankers - all of these for starters seem eminently sensible options that remain open to us even today, when our options are much more limited than they were two or three years ago.

As far as I'm aware, the negotiations with those classes of bank creditors chosen for haircuts was pretty hard, while prosecution of errant bankers doesn't seem to be entirely off the agenda, if apparently somewhere close to the bottom, quite possibly in the hopes it falls off. Debt relief...I don't know, really, I haven't yet made up my mind on that.

cordially,
Scofflaw

Cavehill Red

I think the Icelandic model indicates that perhaps we didn't choose anywhere near enough bank creditors to sit in the barber's chair.
Which myths about Ireland do you believe Davidsdottir is culpable of propagating?

[Jackass]

Godge wrote: »

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

Oh the currency collapse of Argentina and resulting hyper inflation, yes that's exactly the point that's being made here about Irish monetary control, by disinflation, I really meant an all out currency collapse is what we should do to be competitive in the export market and cheapen our labour relative to competitors for investment. You are smart and understand stuff. Good for you..

nice_guy80

did anyone watch the programme on TG4 last night about Iceland??

scary stuff

Good loser

nice_guy80 wrote: »

did anyone watch the programme on TG4 last night about Iceland??

scary stuff

What program was that, please?

books4sale

nice_guy80 wrote: »

did anyone watch the programme on TG4 last night about Iceland??

scary stuff

Yeah, I saw it. Needless to say, i'm happy that I live in Ireland and the path we have chosen.

For anyone coming on here telling me Iceland is in a better position, do yourself a favour and get a reality check! They spent the money like it was growing on trees, now they don't want to pay anyone back.

They couldn't even be bothered to protect their older generation. All their retirement savings wiped out, what future exists for them? Who wants to have to keep working to survive at 75 or 80. A joke and complete immoral in a developed country.

books4sale

Good loser wrote: »

What program was that, please?

Fiorsceal, last Tuesday.

The title thread should be changed.

'Ireland right all the way!'

karlth

books4sale wrote: »

They[Iceland] spent the money like it was growing on trees, now they don't want to pay anyone back.

They couldn't even be bothered to protect their older generation. All their retirement savings wiped out, what future exists for them? Who wants to have to keep working to survive at 75 or 80. A joke and complete immoral in a developed country.

Really! And where did you this information? (It's false by the way).

Good loser

I would say for the average person in Iceland the devaluation lowered the standard of living by the appropriate amount - possibly 30%?

IN Ireland if everybody agreed to lower their standard of living by the appropriate amount we could resume growth. Except everybody whinges when asked to cut or pay the necessary taxes. It has taken five years to adjust to current levels with another 3/4 to go.

We want the Icelandic result (so called) without the effort or pain.

karlth

Good loser wrote: »

I would say for the average person in Iceland the devaluation lowered the standard of living by the appropriate amount - possibly 30%?

IN Ireland if everybody agreed to lower their standard of living by the appropriate amount we could resume growth. Except everybody whinges when asked to cut or pay the necessary taxes. It has taken five years to adjust to current levels with another 3/4 to go.

We want the Icelandic result (so called) without the effort or pain.

Well there has certainly been pain but because it is the currency that took the hit the negative effects have been spread fairly evenly around, and thus is perhaps less noticeable.

I'm not sure how options Ireland had when the crisis hit. You rely less on natural resources than we do so it is more important for Ireland to maintain normal financial relations. Iceland had the option of dumping the banks and I'm not so sure that Ireland really could. If it could have, would it have made things better? A working currency is pretty important!

The thing is though that Iceland and the rest of Scandinavia(in the 90s) have all gone on a binge and then have had to clean house, i.e. our banks all went bust. We've gone through the purging process and in my opinion there is a lot of cleaning still to be done in the rest of Europe.

Scofflaw

Good loser wrote: »

I would say for the average person in Iceland the devaluation lowered the standard of living by the appropriate amount - possibly 30%?

IN Ireland if everybody agreed to lower their standard of living by the appropriate amount we could resume growth. Except everybody whinges when asked to cut or pay the necessary taxes. It has taken five years to adjust to current levels with another 3/4 to go.

We want the Icelandic result (so called) without the effort or pain.

The whole argument over levels of growth always strikes me as odd. Is it really such an advantage to achieve growth by lowering the living standards? Is that not equivalent to deciding to take a cut in salary because you've an increment coming up and you'd like a "higher rate of salary growth"?

slightly perplexed,
Scofflaw

karlth

Scofflaw wrote: »

The whole argument over levels of growth always strikes me as odd. Is it really such an advantage to achieve growth by lowering the living standards? Is that not equivalent to deciding to take a cut in salary because you've an increment coming up and you'd like a "higher rate of salary growth"?

A lot of the GDP growth numbers we've seen here in Iceland are exactly that, just normal adjustment due to the massive hammer blow that struck us 4 years ago.

In the end it all comes down to the basics: Are private individuals spending too much? Is the government spending too much? And is the country spending too much? If so then you are in trouble (possibly because of an over-valued currency).

I don't know about Ireland but in Iceland we forgot about those fundamentals before 2008.

Good loser

Scofflaw wrote: »

The whole argument over levels of growth always strikes me as odd. Is it really such an advantage to achieve growth by lowering the living standards? Is that not equivalent to deciding to take a cut in salary because you've an increment coming up and you'd like a "higher rate of salary growth"?

slightly perplexed,
Scofflaw

Didn't think of that. Just assumed growth is 'a good thing' all round.

The lowering of living standards is a reality which, in the abscence of a devaluation, has to be spread through and negotiated with all the interests in society. This makes it messy especially when the strong resist.

So the 'cut in salary' you theorise is forced - not a choice.

Is that so?

Scofflaw

karlth wrote: »

A lot of the GDP growth numbers we've seen here in Iceland are exactly that, just normal adjustment due to the massive hammer blow that struck us 4 years ago.

Yes, that's what I thought - first collapse GDP from $20.5bn to $12bn, then grow again, and you get idiots saying "we should do that, then we'd be growing!". It strikes me as - well, "odd" is the politest version.

In the end it all comes down to the basics: Are private individuals spending too much? Is the government spending too much? And is the country spending too much? If so then you are in trouble (possibly because of an over-valued currency).

karlth wrote: »

I don't know about Ireland but in Iceland we forgot about those fundamentals before 2008.

I think we might be able to say that we might perhaps have done that a little bit. Also, perhaps, are your banks bigger than your economy? Is your tax revenue balanced on a property bubble?

cordially,
Scofflaw

Villa05

books4sale wrote: »

Yeah, I saw it. Needless to say, i'm happy that I live in Ireland and the path we have chosen.

For anyone coming on here telling me Iceland is in a better position, do yourself a favour and get a reality check! They spent the money like it was growing on trees, now they don't want to pay anyone back.

They couldn't even be bothered to protect their older generation. All their retirement savings wiped out, what future exists for them? Who wants to have to keep working to survive at 75 or 80. A joke and complete immoral in a developed country.

So the old people are sacrosanct in Ireland, the same old people who voted for Fianna fail in large numbers. The same old people whose standad of living has improved during the crisis as their pensions have not been cut. Check out the social welfare budget and see how much is being spent on these pensioners.

Is it not immoral to mantain pensions at these levels and then pass the bill on to generations to come, who will never benefit from pensions at current levels

srsly78

Retirement savings does not just mean old people, it also means the rest of us too. So you would be punishing prudence.

edit: The government is taking 0.6% out of every private pension fund as it is.

antoobrien

Villa05 wrote: »

Is it not immoral to mantain pensions at these levels and then pass the bill on to generations to come, who will never benefit from pensions at current levels

But reconcile that with the agenda that it's immoral to cut these pensions as they have worked, have not contributed to the boom blah blah blah (yes I think it's a load of blather).

Everyone is saying why me, why don't you cut them, when in reality we're all going to have to take cuts.

Sand

srsly78 wrote: »

Retirement savings does not just mean old people, it also means the rest of us too. So you would be punishing prudence.

People who save in a horribly run and incompetent bank are not prudent. If they were prudent, then practically by definition they wouldn't need to be rescued at great expense to their fellow citizens.

Spindle

Sand wrote: »

People who save in a horribly run and incompetent bank are not prudent. If they were prudent, then practically by definition they wouldn't need to be rescued at great expense to their fellow citizens.

So that would make people who took out huge mortgages they couldn't afford from these same banks prudent then would it?

Head The Wall

No, and Idon't think you understand what the word prudent means.

books4sale

Villa05 wrote: »

So the old people are sacrosanct in Ireland, the same old people who voted for Fianna fail in large numbers. The same old people whose standad of living has improved during the crisis as their pensions have not been cut. Check out the social welfare budget and see how much is being spent on these pensioners.

Is it not immoral to mantain pensions at these levels and then pass the bill on to generations to come, who will never benefit from pensions at current levels

Where did I mention pensions?

Next time, read a post before you go off on your wild west 'hang em high' style rant.

That's half the problem with this country, too many hot headed ranting and raving types while not enough level headed constructive doers.

View

Sand wrote: »

People who save in a horribly run and incompetent bank are not prudent.

You really expect the "ordinary consumer" to be able to pass judgment on the prudence or not of their bank's policies?

The banking regulator is supposed to do that job.