Spanish society in freefall...

Spain currently has a mass unemployment rate of 24.1% and youth unemployment rate (15-24 y/o) that exceeds 50%, up from 18.2% in 2007.  In comparison Italy's youth unemployment is 29%; Portugal is 30%; and 24% of young people in France are without employment.  The Spanish economy has been contracting each of the past two quarters and is officially back in recession.  As the financial sector attempts to wade through the morass of over-development, massive consolidation of the banks and the crippling of credit has occurred.

The root cause of much of this disaster lies in the corrupt nexus between local bankers and regional politicians, which happen in many instances to be one and the same.  Lax lending standards, cheap foreign labor, and easy inflows of European capital all lead to a massive over-development.  The days of cheap credit ended with the financial crash of 2008.  Private debt was absorbed by the balance sheets of the state and ultimately the collective nations of the Eurozone.

Whereas the chicanery that lead to this bloody mess is a story that needs to be told, I'm interested today in discussing the impact on real people and the current generation of people who will have to pay for this economic catastrophe for the rest of their lives.  The decline and hopelessness felt across Spain has been chronicled in a number of newspapers and journals.  Here are some of the highlights.

In the Spanish daily La Pais, a 9-March article titled Generation Nimileuristra described the lives of young people who see opportunities denied and their lives stagnating with either low or no paying jobs.  

In 2005 youth unemployment was about 20%. Now [reaching] 50% while doubling the European average (22.4%) . The best educated generation has the worst outlook since the transition and feels a victim of the excesses of others...

In Spain there are 10,423,798 people between 18 and 34... Their average net income (including the unemployed), is 824 euros per month. And those who are working earn on average 1,318 euros a month (data from the Youth Council of Spain)...  Professions that seemed safe... are not. The Polytechnic University of Valencia followed the first steps in the process of engineers and architects who graduated in 2008: one in four did not reach [jobs with salaries over 1000 euros/month]. And what is worse: the [educated with jobs with salaries under 1000 euros/month] had advanced by 8% compared to graduates a year earlier.

In many cases youth are forced to abandon independence and relocate into their family's homes.

It has been established that even small levels of protracted unemployment in developed countries can have serious implications for the unemployed.  Those include reduced lifetime wages, reduced employment opportunities, and higher mental health issues.  With respect to society at large, depressed wages will promote educated youth emigrate to other jurisdictions, resulting in a brain-drain to the nation.  Undereducated and unemployed male youth on the other hand are statistically more likely to participate in criminal activity.

In many OECD countries the unemployment rate is substantially higher than the general population. An Economist article from Sept-11, 2011 discusses the various disadvantages and impacts under-employment and unemployment will have on these people.

Unemployment of all sorts is linked with a level of unhappiness that cannot simply be explained by low income. It is also linked to lower life expectancy, higher chances of a heart attack in later life, and suicide. A study of Pennsylvania workers who lost jobs in the 1970s and 1980s found that the effect of unemployment on life expectancy is greater for young workers than for old. Workers who joined the American labour force during the Great Depression suffered from a persistent lack of confidence and ambition for decades.

The implications of this situation are severe.  Not only will youth not be entering the work force, they will not be participating in the economy and doing normal things, such as buying cars, homes, furniture. So there is a negative cascade felt across the nation on all levels. Secondly, since they will not be paying taxes, who will bear the burden of maintaining the welfare state that Europeans are so proud of?   As fewer people are contributing to these pay-as-you-go programs, older generations will see a reduction in benefits.

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The financial crisis has lead to governments across Spain to drastically cut programs, services, and cash transfers to lower levels.  A New York Times article elaborates:

Just as Spain’s national and regional governments are struggling with the collapse of the construction industry, overspending on huge capital projects and a pileup of unpaid bills, the same problems afflict many of its small towns.

One town's mayor discusses his small community's problems:

“We lived beyond our means,” Mr. García said. “We invested in public works that weren’t sensible. We are in technical bankruptcy.” Even some money from the European Union that was supposed to be used for routine operating expenses and last until 2013 has already been spent, he said.

The banking upheavals have brought similar troubles to small and medium scale businesses, which represent "60 percent of the economy, and 80 percent of the jobs".  The vicious cycle has resulted in the shuttering of more than 500,000 small business according to the NY Times.  

“The cuts in credit have been so abrupt that some businesses not only lost specific projects they were working on,” said Carlos Ruiz Fonseca, the director of economy and innovation at Cepyme, Spain’s association of small and medium-size companies. “Some companies have just gone out of business.” 

How is any of this supposed to engender confidence in the international markets?  The same banks which are cutting credit lines, reducing exposure to risk, and contracting their businesses are simultaneously being downgraded by the various credit agencies.  Billions of Euros are being requested by the financial sector to keep these debt ridden entities from further collapsing and imploding the entire Spanish economy.

The net result of all these events is a society that is in freefall.  If these trends continue, not only will Europe have generated legions of angry, unemployed persons, they will have created the same foundations that gave rise to the extremists of the last century.

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Update: video link about squatters taking over an vacant apartment complex, built during the construction boom, in Seville

Feasting on Ecocide!

Over the past decade, countries across the world have been discussing the profound damage that has been occurring through deep-sea fishing. The Pew Environmental Group has been tracking the situation:

Since 2004, the international community, through the United Nations (U.N.) General Assembly, has called on fishing countries and regional fisheries management organizations (RFMOs) to urgently act to protect deep-sea life. Beginning in 2006, U.N. resolutions that outlined a plan to safeguard this fragile biodiversity passed. Many governments supported an outright moratorium on high-seas bottom trawling, but countries operating deep-sea vessels instead promised to take action to make fisheries more sustainable and protect vulnerable marine ecosystems. Ultimately, they agreed to conduct a formal assessment after a few years to determine how well the resolutions had been implemented.

Preliminary findings released in June 2011 by the Deep Sea Conservation Coalition (DSCC), "highlight serious failures by countries and Regional Fisheries Management Organizations (RFMOs) in efforts to protect vulnerable deep-sea biodiversity and high seas fish species."

Research conducted by scientists and published in the journal Marine Policy are recommending a complete halt to all deep sea fishing.  Instead of permitting industrial fleets from disrupting these extremely delicate aquatic ecosystems, scientists are further recommending that fishing be confined to more productive coastal fisheries nearer to consumers.

The following summary from Eurekalert outlines the problem:

Life is mostly sparse in the oceans' cold depths, far from the sunlight that fuels photosynthesis. Food is scarce and life processes happen at a slower pace than near the sea surface. Some deep-sea fishes live more than a century; some deep-sea corals can live more than 4,000 years. When bottom trawlers rip life from the depths, animals adapted to life in deep-sea time can't repopulate on human time scales. Powerful fishing technologies are overwhelming them. 

"The deep sea is the world's worst place to catch fish" says marine ecologist Dr. Elliott Norse, the study's lead author and President of the Marine Conservation Institute in Bellevue, Washington USA. "Deep-sea fishes are especially vulnerable because they can't repopulate quickly after being overfished." 

The deep sea provides less than 1% of the world's seafood. But fishing there, especially bottom trawling, causes profound, lasting damage to fishes and life on the seafloor, such as deep-sea corals, these experts say. 

Since the 1970s, when coastal fisheries were overexploited, commercial fishing fleets have moved further offshore and into deeper waters. Some now fish more than a mile deep. 

"Because these fish grow slowly and live a long time, they can only sustain a very low rate of fishing," says author Dr. Selina Heppell, a marine fisheries ecologist at Oregon State University. "On the high seas, it is impossible to control or even monitor the amount of fishing that is occurring. The effects on local populations can be devastating."

The Washington Post has a good article discussing the topic and revealing the moral cowardice of the Europeans in reigning in their colleagues in Portugal, Spain, France, and Denmark from destroying these ecosystems.

Europe's inverted socialism

And most Northern Europeans also seem to believe that the bailouts have gone to lazy Southern Europeans. In fact, their purpose has been to shore up the fragile Northern European financial systems. German banks are among the weakest in Europe; some of them (especially the state-owned landesbanks) are effectively bankrupt. If they were forced to mark down their Southern European debt, they might well collapse in a heap, and the European financial system could grind to a halt. Just as in the United States, the real impact of the European bailout has been to shore up the continent’s banks – not to help the continent’s debtors. The recent downgrading of two of France’s most important banks, due to their holdings of Greek debt, reminds us of how exposed Northern Europe’s financial systems remain. And rumors of a recent IMF report that European banks are over $270 billion short of the capital they need to confront their current problems served to drive the point home.

- Jeffry Frieden, "Europe's Lehman moment"

Europe's financial problems have escalated to the point where a world-wide contagion has become again possible.  Economists and international leaders are sounding alarms that have rarely been spoken in unison, since the inception of the 2008 financial crisis.  Christine Lagarde, the managing director of the International Monetary Fund, said "We have entered into a dangerous phase of the crisis." Her words come at a point where the Greek debt crisis appears to be reaching its climax.  Moody's Investors Service downgraded two of France's top banks, Societe Generale and Credit Agricole, stating that it had concerns about the two banks funding and liquidity profiles, due to their exposure to Greek debt.  A recent analysis indicates that 43 large European banks hold debt in the PIIGS equivalent to 65% of the book value of those institutions. Gretchen Morgenson of the NY Times explains the current situation:

Some of these [European] banks are growing desperate for dollars. Fearing the worst, investors are pulling back, refusing to roll over the banks’ commercial paper, those short-term i.o.u.’s that are the lifeblood of commerce. Others are refusing to renew certificates of deposit. European banks need this money, in dollars, to extend loans to American companies and to pay their own debts.  

As a result several central banks have mounted a coordinated effort to inject US dollars into the financial system to stimulate market confidence.  The Guardian newspaper elaborates:

The Bank of England joined the US Federal Reserve, the European Central Bank, the Swiss National Bank and the Bank of Japan on Thursday to announce that they would flood money markets with dollars over the coming months.

Gus Faucher, director of macroeconomics at Moody's Analytics, states "The big question is: is this enough in the short term to get us to a longer term solution? There is a potential for a really huge financial crisis in Europe. Things are bad now, but they could get a lot worse."

Many observers are looking at the current European situation and seeing similarities between Lehman Brothers demise and the 2008 crisis.

Adding to the peril is that these banks are funded primarily by short-term investors, like buyers of commercial paper, rather than by depositors, as is more often the case with American banks. This was the same problem faced by Bear Stearns and Lehman Brothers, which collapsed after short-term lenders fled in panic.

Economist Barry Eichengreen says that, "The euro’s survival and, indeed, that of the European Union hang in the balance."  He says long term proposals on restructuring Europe's sovereign debts are not of immediate concern, rather the continent needs to act decisively in stabilizing its banks.  The European Financial Stabilty Facility (EFSF) and even the IMF should be used to re-capitalize Europe's weak banks.  The second move should be to give Greece sufficient room to maneuver by asking its creditors to relax its fiscal targets.  Third, governments need to end this futile dalliance with austerity and proceed with stimulus projects that would create real growth.  He states, "Without growth, tax revenues will remain stagnant, and the capacity to service debts will continue to erode. Social stability, similarly, depends on it."

Economist Paul Krugman at the beginning of this week had some serious words for European governments.  He states, "We’re not talking about a crisis that will unfold over a year or two; this thing could come apart in a matter of days. And if it does, the whole world will suffer"  Likewise, he is telling Europe to use the ECB to continue buying up Spanish and Italian debt to contain the risk of default. The moral argument for inaction or worst punishing Europe's peripheral nations and the Mediterranean nations of Spain and Italy, will drive the continent -if not the world- into another economic abyss.

The reality is Greece's debt problems have been growing and not diminishing over the past two years.  The country is not in any position today or in any foreseeable future to repay the totality of its debt.  Under the current regime imposed on the country, Simon Johnson a former IMF chief economist concludes that "The tax revenue needed to service [the Greek] debt would burden businesses and households for decades – enterprising and productive people will move their fortunes and their futures elsewhere in the euro area or to the United States." Throwing billions of dollars at the nation, only to prop up banks in the northern economies of Europe and hoping that the situation will be resolved at a later date, has now been shown to be an unfeasible and irresponsible position.  Europe needs to first stabilize its banking sector immediately and then proceed in an orderly default of Greece's debt. An unorderly default will plunge the entire Eurozone into chaos.  Spain and Italy will face unprecedented pressure, whereas the remaining nations of Portugal, Ireland, and Greece may well face economic collapse.

Recession Watch: one dip, two dips,... we all fall down

The trend lines are undeniable; the US economy is heading into another recession.  Debate between economic analysts entail whether what is occurring is an entirely new recession, a double-dip recession, or the continuation of even larger economic contraction that began initially with the 2008 financial crisis (which some would argue is an extension of the 2001 recession) and has properties that are unlike previous recessions.  Each of these arguments have some validity in explaining the current situation, but all conclude that this new decline, while not likely to be as severe as the 2008 crisis, will last longer in duration and given the current political weaknesses of the major industrial nations, be more difficult to mitigate.

Leaving aside the debt crisis and economic malaise that is occurring in Europe for the moment or the possible hard landing that has been predicted about China and the entailing risks these situations pose to the global economy, America's economic position is clearly weak.

First, the jobs position is dismal.  Last month, zero jobs were added and only a fraction of the jobs necessary to compensate for population growth alone have been achieved in the previous four months.  The NY Times summarizes:

Over the last 50 years, every time that job growth has been as meager as it has been over the last four months, the economy has been headed toward recession, in a recession or in the immediate aftermath of one.

The collapse of job creation is not about businesses fearing regulatory uncertainty, creeping hyper-inflation, or the need for further tax-cuts to stimulate big businesses already bloated corporate coffers, but rather it is due to insufficient aggregate demand.  People without jobs, people forced to take inferior paying jobs, people concerned that they may lose their jobs, people forced to subsidize their spouse, adult children, parents, and/or relatives, and people loaded with debt, aren't engaged in making major purchases, because they can't afford to.  Consider the following:

But the latest indicators suggest that even if the economy does not continue to worsen, it appears to be too weak to add enough jobs each month — roughly 125,000 — even to keep pace with population growth. Anything less, and the share of the population that is employed will continue to fall.

The stimulus program offered by Mr. Obama was insufficient to meet the full demands of the  financial crash of 2008.  This blog has been saying for the past three years (here, here, and here) that the weak recovery was an illusion.  Joseph Stiglitz said back in 2009 that, "We need a larger and better designed stimulus."  Paul Krugman has been waging a public policy crusade to convince the public that a second more robust stimulus is needed.  President Obama, instead of listening to these and similar minded economists, decided to split the difference and offer everyone a little of what they wanted: a little bit of tax cuts and some stimulus over a couple years.  The problem was that while averting a more severe recession, it failed to create enough power to re-inflate the economy to pre-recessionary levels.  Now that the stimulus dollars have been used, the economy is drifting back into negative territory and with a recalcitrant Republican dominated House of Representatives, there is virtually no chance that anything of substance being passed.

Other indicators such as GDP, consumer confidence, consumer consumption, factory employment diffusion index, and housing are all trending downwards.  Volatility in the market place, with abundant talk of debt crises across the western hemisphere, has investors and business worried.  Last month Asian banks cut credit lines to French banks.  Central banks across Europe, Japan, and America have made the unexpected move to offer dollars to European banks to ensure liquidity.

What had been in 2008 a financial crisis has migrated into a sovereign debt crisis.  Nouriel Roubini expands:

We are running out of policy bullets. The policymakers don't have monetary bullets; they don't have fiscal bullets; they cannot even backstop their own financial system. That's why it's more scary than a year ago, two years ago, or three years ago -- when we had all these policy bullets. Now we are running out of them.

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Ken Rogoff, Harvard professor and former chief economist at the IMF, has said, "the real problem is that the global economy is badly overleveraged, and there is no quick escape without a scheme to transfer wealth from creditors to debtors, either through defaults, financial repression, or inflation."  As a result, Rogoff points out that many policy makers have badly misunderstood the overall problems associated with this second great contraction, as he puts it.  He offers the suggestion that, "If governments that retain strong credit ratings are to spend scarce resources effectively, the most effective approach is to catalyze debt workouts and reductions."

Solutions to both individual and national debt problems should be addressed as follows:

For example, governments could facilitate the write-down of mortgages in exchange for a share of any future home-price appreciation. An analogous approach can be done for countries.  For example, rich countries’ voters in Europe could perhaps be persuaded to engage in a much larger bailout for Greece (one that is actually big enough to work), in exchange for higher payments in ten to fifteen years if Greek growth outperforms.

Another approach offered by Rogoff to reduce the painful deleveraging process and years of unnecessary slow growth, would be for central banks to pursue a policy of moderate inflation of 4-6% for several years.

At this stage, none of the policies suggested by Stiglitz, Krugman, Roubini, or Rogoff appear on the table in either Washington DC or the capitals of Europe.  Instead of sustained and ambitious solutions, we are left with blathering idiots telling us of austerity programs that will magically generate confidence, while keeping away the terrible bond vigilantes.  The incompetence and stupidity of our leaders is nearly blinding.

Krugman on the toxicity of American Politics

Paul Krugman talks about the toxic atmosphere created by the right-wing and their corporate supporters in the media, that has lead America to this current and deadly state of affairs.  In the article he exposes the primary source for the vitriol.

The point is that there’s room in a democracy for people who ridicule and denounce those who disagree with them; there isn’t any place for eliminationist rhetoric, for suggestions that those on the other side of a debate must be removed from that debate by whatever means necessary.

And it’s the saturation of our political discourse — and especially our airwaves — with eliminationist rhetoric that lies behind the rising tide of violence.

Where’s that toxic rhetoric coming from? Let’s not make a false pretense of balance: it’s coming, overwhelmingly, from the right. It’s hard to imagine a Democratic member of Congress urging constituents to be “armed and dangerous” without being ostracized; but Representative Michele Bachmann, who did just that, is a rising star in the G.O.P.

He realizes that Fox News and Rush Limbaugh provide people who watch and listen to them exactly what they want; an endless stream of drama, in which they play the victim in their own pretentious and morally debased theater of the absurd.  However, that does not imply that just because the obscene can be monetized, that it should be given public disclosure.

But even if hate is what many want to hear, that doesn’t excuse those who pander to that desire. They should be shunned by all decent people.

This tragedy, isn't about limiting free speech.  This is about dangerously ignorant people, pursuing an ideology that demands the liquidation and elimination of all opponents and persons, who do not faithfully adhere their warped and deranged version of reality.  Krugman summarizes the critical conceit in this whole sordid affair.

It’s important to be clear here about the nature of our sickness. It’s not a general lack of “civility,” the favorite term of pundits who want to wish away fundamental policy disagreements. Politeness may be a virtue, but there’s a big difference between bad manners and calls, explicit or implicit, for violence; insults aren’t the same as incitement.

If there are those who do not believe the above, then they should ask what countries and explicitly, what Western democracies, allow their media and politicians to engage in such lawless behavior? The answer is that no Western European nations nor countries like Australia, Canada, or New Zealand, would tolerate the type of incitements to public violence as what routinely occurs in America.  On the other hand, third world countries with limited experience in democracy, failed nations engaging in sectarian conflict and ethnic cleansing, and countries like Venezuela and Iran, which are subsumed in managing their population through class and ideological warfare, are the ones in which America's political landscape most resembles.

Obama, bagman for Bush's torture adventures

McClatchy Press has an excellent summary, through Wikileaks, of the Machiavellian maneuvers made by the Obama White House to undermine both international law and justice.

This blog has in the past described how the administration of Barack Obama over the past two years, has given "support and comfort" to the torturers and fiends of the Bush junta (here, here, and here). A number of prominent political and legal commentators have equally concluded that Obama, his AG, and members of his administration are now as culpable as their predecessors in concealing acts of torture, manipulating foreign governments to forsake investigations of American criminality, and failing to vigorously uphold constitutional prerogatives in prosecuting those who have violated domestic laws and international treaties, to which America is signature to.

In 2009, the Obama administration sent Republican Senator Mel Martinez to Spain to cajole the Spanish judiciary into abandoning investigations lead by Spanish magistrate, Baltasar Garzón into six Bush lawyers who laid, "the foundation for abuse of detainees in the months following the Sept. 11, 2001, attacks." The Spanish investigations concerned Alberto Gonzales, who described parts of the Geneva conventions "quant" and "obsolete" after 9-11; Bush lawyers John Yoo and Jay Bybee; David Addington, Vice President Dick Cheney's counsel; William "Jim" Haynes, Defense Department General Counsel; and Doug Feith, a Pentagon undersecretary who handled policy issues for Defense Secretary Donald Rumsfeld.

The Spaniards were not swayed and told Martinez and the American ambassador to Spain, that "The independence of the judiciary and the process must be respected.''  Michael Ratner, a civil rights attorney affiliated with the Center for Constitutional Rights, states that "The U.S. prides itself on our own independent judiciary... But here you have the hypocrisy of the U.S. government trying to influence an independent judicial system to bend its laws and own rules.''

The timeline of the above diplomatic maneuvers coincides with Obama's attempt to marginalize Bush's crimes:

But by the time Spain's Association for the Dignity of Prisoners filed the torture complaint that U.S. diplomatic circles found so troubling, the Obama White House was resisting calls to set up a Truth Commission or assign a special prosecutor to examine the legal framework that set up Guantánamo and permitted "enhanced interrogation techniques'' that included waterboarding high-value detainees.

"Generally speaking, I'm more interested in looking forward than I am in looking backwards," Obama said on Feb. 9, 2009.

How Mr. Obama, a man who taught constitutional law at the University of Chicago, could become protector and defender of his predecessor's criminality, will be an issue that historians will grapple with for decades.  The emotional cheers of "change you can believe in" lie exposed as election based propaganda, told by the architects of Empire to confuse the guilible masses into believing that their opinion actually matters.

Possible Causes of Honeybee Colony Collapse Found

US scientists associated with the US Army and the University of Montana, have ascertained a possible cause for the annual decline in honeybee colonies in the USA.

To contextualize, the phenomenon is not unique to the United States and has been found to be affecting bee populations across the globe for a number of years.   In 2004, apiarists started to discover that large portions of their colonies were either dying or not returning to their hives.  Substantial losses year-over-year both in North America and Europe, have lead to a concerted global effort to ascertain the causative agents behind this situation.  Francis Ratnieks, a biologist at University of Sussex in Brighton, has stated in Wired magazine that there is no single rational at the global level, why bee populations are in decline.  He elaborates that honeybees are "probably dying for all kinds of different reasons from loss of their foraging grounds to increased exposure to global pathogens."  Pesticide usage, monoculture agricultural practices, urban sprawl, and climate change are also a few of the other causes that investigators have looked at to understand why bees are in decline.

The NY Times is reporting that American scientists, utilizing military research tools, have identified a fungus and virus pair that is present in 100% of all colony collapse cases evaluated in their labs.  Their findings suggest that "both the virus and the fungus proliferate in cool, damp weather, and both do their dirty work in the bee gut, suggesting that insect nutrition is somehow compromised."

The article reports on the host-parasite interaction:

“It’s chicken and egg in a sense — we don’t know which came first,” Dr. Bromenshenk said of the virus-fungus combo — nor is it clear, he added, whether one malady weakens the bees enough to be finished off by the second, or whether they somehow compound the other’s destructive power. “They’re co-factors, that’s all we can say at the moment,” he said. “They’re both present in all these collapsed colonies.”

The mechanisms that the fungus-virus pair is utilizing to undermining the bee populations is yet to be determined.

Still unsolved is what makes the bees fly off into the wild yonder at the point of death. One theory, Dr. Bromenshenk said, is that the viral-fungal combination disrupts memory or navigating skills and the bees simply get lost. Another possibility, he said, is a kind of insect insanity.

Further research into this phenomenon is necessary to understand a means of preventing future outbreaks.  However, we also know as in a case study in Britain where changes have been made to enhance the natural environment of bumblebees, such as "putting in pollen and nectar-rich flower margins to fields, growing red clover hay meadows and rotating the grazing of animals on land," that immediate improvements in the health of local bees could be achieved.

Please Mind the Gap!

The above chart culled from a posting at Kevin Drum's MotherJones blog, illustrates what has been discussed substantially since the inception of the 2008 global financial meltdown, but has not been widely understood amongst the general population.  If growth averages at or below 2% for the remainder of the decade, unemployment will remain nearly twice at which it was during the 1990's and much of the 2000's.  Similar to Japan's continuing economic malaise, America appears to entering a period of turbulence in which as much as 10-years of marginal or no economic growth will occur.

Both Harvard's Ken Rogoff and Yale's Robert Shiller have also discussed the likelihood that neither America nor much of the Industrialized world will return to pre-recessionary growth levels within the short term.  Based on Rogoff and Carmen Reinhart's 2009 research on economic crisis's over the past 800-years, they state that a "slow, protracted recovery with sustained high unemployment is the norm in the aftermath of a deep financial crisis."  Given the weak stimulus package introduced by the Obama administration and the ascent of austerity economics amongst many European nations, there is no reasonable chance that on either side of the Atlantic unemployment will reside, economic output will markedly increase, or that the fiscal situation will improve by 2012.

Shiller notes that in Rogoff and Reinhart's examination, the following rates are derivable:

median annual growth rates of real per capita GDP for advanced countries were one percentage point lower in the decade following a crisis, while median unemployment rates were five percentage points higher.

With the introduction of further uncertainty, whether through China's economy crashing or other yet to be determined causes, the world is faced with grim economic prospects for the foreseeable future.

Fat and Lazy: It's Not Just for Americans Any More!

As everyone knows America is not a healthy country.  For example, French fries and ketchup are considered vegetables, and 68% of the population is overweight, with a scale tipping 34% of the overall population obese.  Yet because of America's infatuation with sports, athleticism, and that California "good-look" epitomized on television and the movies, exercise venues and sports clubs are an ubiquitous part of the cultural landscape.

In France, the idea of a thin European smoking cigarettes and sipping coffee or wine still impregnates the imagination.  In 2004, a book was written by Mireille Guiliano titled, French Women Don't Get Fat.  However, the idea of a svelte and upwardly mobile Frenchwomen appears to be more fiction than fact, if one considers what the LA Times had to say back in 2007:

Already, 42% of the French population is either overweight or obese, according to the National Institute for Health and Medical Research, known by its French initials, Inserm. The rate among children and adolescents has quadrupled in the last 25 years and has been growing almost as fast as in the United States.

"If you look at the statistical curve, we're now where the U.S. was in the 1970s," said Olivier Andrault, a food expert with the French Union of Consumers. "It means if we do nothing, in a few years the French will be as fat as Americans."

Like every other Western society, France is seeing an unprecedented acceleration in its health care costs.  The increased girth of the population has put pressure not just on waistbands, but also on the finances of the country.  An obvious solution to the health of its citizenry is for the French to migrate towards the workout routines or fitness lifestyle as seen in America.  However, for both cultural and economic reasons, this solution do not appear likely.

"It appears to me that more people are sitting in cafes smoking cigarettes and drinking coffee than working out ... the French don't see fitness as a lifestyle," says American-born fitness consultant Fred Hoffman, who has lived in Paris for 21 years.

Only 5.4 percent of French people belonged to a health club in 2008, according to the International Health, Racquet and Sportsclub Association, compared with 9.5 percent for Italy, 11.9 percent for the United Kingdom and 16.6 percent for Spain.

For a society that invented the French kiss and a noon time excursions between the sheets, it strikes me as odd that the French don't like to sweat.  I've had others too, exclaim that they didn't like sweating.  Obviously no likes perspiring in public and looking like a big fatty, but the excuse seems terribly lame given the upside.

A Reuters article describes the economic and additional societal reasons why fitness clubs don't appear to taking hold.  Vive la Fatties!

The Dismal Science Redefined

Current economic theory is less a science than an ideology peculiar to a certain period of history, which may well be nearing an end...

[Economists are] the jilted lovers of the science world – the more rigidly they approach their subject, the more it mocks them with spurious and headstrong behaviour.

Since this blog started, I've been constantly commenting on the dearth of empirical evidence that lies behind many of the attributed economic theories of our time and the persistent irrationality, if not complete fraud, of proponents of modern economics.  Many noted persons who are economists, like Paul Krugman and J. Brad DeLong, have likewise stated how the field has become a self-serving entity, that is in many cases polluted beyond the point of usefulness.  The above quotes, culled from a Globe and Mail newspaper opinion piece by Brian Milner titled "Economists and their fairy tale world of prognostication," is another indictment of the dismal science's ability to actually be a science.  The central basis of any science is its ability to factually explain natural phenomenon, testability of theories, reproducibility of experiments, and its ability to predict future events.  Economics, or at least that set of dogma pedalled in the MSM, doesn't pass any of the above criteria. 

If economists want their profession be taken seriously, then they should start actually calling out those on their side who have perennially gotten it wrong and banish them.

The entire fable of sustainable capitalism is disintegrating all around us like the dreamscape in the movie Inception.  The communists of China, through their mercantile and corrupt practices, are acquiring natural resources across the globe and buying friends everywhere.  The new globalization that peaked in the last decade is slowly devolving.  The financial system that imploded in 2008, has only been patched together with band-aid remedies and awaits further paralysis in the near future.  China, Europe, and America are all betting against the odds, that growth will magically return and the masses will defer sharpening their pitchforks until another day.

Peak Oil: The Germans and British Understand the Outcome

A series of recent reports have been released by both the German and UK governments on the implications of Peak oil.  Jeff Rubin, former chief economist of Canada's CIBC World Markets, discusses both reports in his Globe and Mail blog.  In it he summarizes that the emerging global consensus amongst policy makers and long term government planners is that deficiencies in accessing and utilizing petroleum will lead to severe economic disruptions, social instability, and a collapse of the current global trade arrangements.

Rubin disputes the reassurances made by governments and industry supporters that peak-oil is not a concern.  As I've outlined in previous blog entries (here and here), many persons who have had a close examination of the situation believe that we reached peak-oil in 2005.  The German study states that there is "some probability that peak oil will occur around the year 2010 and that the impact on security is expected to be felt 15 to 30 years later."  Rubin concedes that while we may not have reached "geological peak-oil" from the economic perspective we certainly have.  As global oil prices maxed out at near $150/bbl it became abundantly clear that our current economy and way of life is completely incapable of sustaining these costs.  Furthermore, it is only at these very high levels of crude that many of the untested extraction technologies and difficult to obtain reserves can be made to be profitable.  Hence, in reality, accessible global oil reserves are not growing any further.

Der Spiegel International, outlines a series of potential situations that may arise:

1. Oil will determine power
2. Increasing importance of oil exporters
3. Politics in place of the market
4. Global market failures
5. Relapse into planned economy
6. Global chain reaction
7. Crisis of political legitimacy

Altogether, the implications of this fact are severe.  Rubin summarizes:

The German study paints a bleak picture of the post-peak world: political power quickly shifts from major oil-consuming economies to major oil-producing economies. Less and less oil is traded on the open market, while more and more is traded between nation states, with national oil companies entering into long-term supply agreements that are tied to broader political and military considerations. And military alliances coalesce around the security of energy supply, rather than between countries with shared political or economic principles.

In the UK, the Guardian newspaper also heralds the dangers associated with a post-peak oil world in an article titled "Peak oil alarm revealed by secret official talks."  Previous estimates by the International Energy Agency indicated that there would be "sufficient reserves to meet demand till 2030 as long as investment in new reserves is maintained."  However, major industry players, economic skeptics, and government analysts believe the situation could be considerably less solvent.

But an internal IEA source said: "Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible, but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources."

Coupled with climate change concerns, which includes the possibility of severe drought, famine, resource scarcity based conflict, and socio-economic collapse everywhere, we are not just talking about a realignment in global powers, but the possibility of wholesale disintegration of human civilization.

Quote of the Day: ECB Austerity Proponents are Dunces

The ECB’s arguments look to me like scraping the bottom of the intellectual barrel. The truth is that it is not fear of government bankruptcy, but governments’ determination to balance the books, that is reducing business confidence by lowering expectations of employment, incomes, and orders. The problem is not the hole in the budget; it is the hole in the economy.

- Robert Skidelsky, "Fixing the Right Hole", Project Syndicate

Tony Judt, Political Historian, Dead at 62

“A well-organized society is one in which we know the truth about ourselves collectively, not one in which we tell pleasant lies about ourselves.”
- Tony Judt.

Tony Judt, a historian of postwar Europe, Israel, and America's foreign policies, was one of those academics who was loathed by persons on both the right and left of the political spectrum.  As The Guardian UK newspaper succinctly put it:

In his guise as a political and historical essayist, he was a fearless critic of narrow orthodoxies and bullying cliques, from communist apologists to the Israel lobby, from "liberal hawks" to progressive educationists. And his political writings have proved not only perceptive but often prophetic.

The obituaries in the NY Times, The Guardian, and other pieces such as Stephen M. Walt's Foreign Affairs tribute, define a man of commanding intellect and fierce moral clarity. 

Mark Lilla, a professor of history, stated in the NY Times Obit that Judt, "had the unusual ability to see and convey the big picture while, at the same time, going to the heart of the matter...Most academics do neither — they float in between. But Tony was able to talk about the big picture and explain why it matters now”

The Guardian describes Postwar, Judt's seminal work on Europe, as:

A History of Europe Since 1945... it was recognised as a masterpiece, acclaimed by scholars and a bestseller in several languages. It described how Europe had remade itself after the horrors of war, totalitarianism and mass murder, helped by some degree of wilful amnesia, although towards the end of the century many repressed memories were at last being recovered.

Whereas Stephen Walt comments:

Postwar is easily the best history of post-World War II Europe yet written, and it provides a compelling account of how a battered and divided continent rebuilt, rose again, and charted a new course for itself. It weaves social, political, and cultural commentary in a clear and compelling narrative, but there are fascinating detours along the way and no shortage of heroes and villains to identify and assess. It is a tour de force that demonstrates Judt's broad and deep learning, sharp critical powers, and a masterful command of language.

His scholarship lead him to clash with intellectual classes of France, European communists, Zionists, the right-wing neo-conservatives who instigated America's Iraq war policy, and the American liberal intelligentsia who likewise supported the failed Iraq war and post-9/11 perpetual warfare narrative.

Tony Judt died at the age of 62 from a variant of the motor neurone disease known as amyotrophic lateral sclerosis, or popularly referred to as Lou Gehrig's disease.

Nick Clegg, The Iraq Invasion was illegal!

During question period in the British House of Commons this week, Nick Clegg, the current Deputy Prime Minister of the UK coalition government, attacked the morally bankrupt and perennially dishonest Labour Party for its role in the 2003 invasion of Iraq.  He lashed out at Jack Straw by proclaiming, "We may have to wait for his memoirs, but perhaps one day he will account for his role in the most disastrous decision of all: the illegal invasion of Iraq."

No one outside the coterie of miserable propagandists who sold the lies advocating for the invasion of Iraq consider the facts in dispute.  Kofi Annan, as Secretary-General of the United Nations, told the BBC in 2004 that the US-led invasion of Iraq was an illegal act that contravened the UN charter.  The egregious falsehoods, exaggerations, and manufactured evidence posited by Tony Blair's Labour Party, Bush's bipartisan fraud-fest, and the usual suspects in the media and military-industrial complex now lie tattered and recognized for what it actually was.  The new UK coalition government, unlike the cowards in the Obama administration, have created an Iraq War inquiry to understand the details surrounding the decision to go to war.  Already, some startling details have been exposed.  For example, former MI-5 intel chief Baroness Manningham-Buller stated that "we regarded the threat, the direct threat from Iraq as low."

Tom Ricks summarizes on his Foreign Policy blog,

As for al Qaeda and Iraq, she said, "there was no credible intelligence to suggest that connection and that was the judgment, I might say, of the CIA. It was not a judgment that found favour with some parts of the American machine, as you have also heard evidence on, which is why Donald Rumsfeld started an intelligence unit in the Pentagon to seek an alternative judgment."

Furthermore, Baroness Manningham-Buller elaborated that the invasion of Iraq, instead of diminishing the overall risk and likelihood of terrorism on British soil, in fact exacerbated the threat from indigenous Muslim radicals.  The blowback of the 7/7 London transit system was not unexpected.  Most damning of all was her stated opinion that the intelligence on Iraq's threat was not "substantial enough" to justify the action.  Of course, much of this is old news.  Opponents and skeptics of the institutional claims have long been aware of Blair's dodgy dossier consisting of "sexed-up" warnings and memos disclosed by whistle-blowers describing how Mr. Blair and Mr. Bush had predetermined the outcome of invasion.

However, the above revelations were not what caught the attention of the press.  Rather, as the Guardian newspaper outlines, was that others considered Clegg's statement in parliament to be a 'gaffe' with the potential that Britain may face charges in some future International court.  The government, more interested in covering their collective asses, distanced themselves by saying that Clegg was expressing his "long-held view" about the Iraq conflict as leader of the Liberal-Democrats.  Downing Street further stated that the government would await the findings of the Chilcot inquiry prior to reaching a view on the war.  It's an odd statement, since Tony Blair's own attorney general, Lord Goldsmith, prior to the war explicitly said, "I remain of the view that the correct legal interpretation of [UN security council] resolution 1441 is that it does not authorise the use of military force without a further determination by the security council."

That Strange Concept Called Accountability!

Something remarkable happened last month that the press seems to have thoroughly overlooked here in the Americas.  The newly formed Conservative-Liberal Democrats coalition government in Britain told the country that they were going to reform civil liberties that had been badly diminished under Labour and equally, hold the previous government accountable their years of participating in the kidnapping, rendition, and torture of persons across the globe.

Nick Clegg, Deputy Prime-Minister, made a speech declaring that the coming changes would be the biggest shake-up in UK democracy since 1832.  He railed against a litany of previous Labour government policies that formed the basis of Britain's surveillance state:

• ID Card schemes
• national identity registers
• biometric passports
• the storing of Internet and email records
• DNA databases
• proliferating security cameras
• repressive restrictions on free speech and assembly rights

Mr. Clegg's party before the election didn't mince words.  The Liberal-Democrats stated in their party platform that, "The Government believes the British state has become too authoritarian, and that over the past decade it has abused fundamental human rights and historic civil liberties."  He further inveighed against the current criminal justice system which imprisons too many citizens without improving public safety, and "pledged radical reform to empower citizens" over entrenched and wealthy interests.

William Hague, the Foreign Secretary, announced that an independent judge will investigate whether the British government was complicit in the torture of terror suspects.  The Guardian summarizes:

The judicial inquiry announced by the foreign secretary into Britain's role in torture and rendition since September 2001 is poised to shed extraordinary light on one of the darkest episodes in the country's recent history.

It is expected to expose not only details of the activities of the security and intelligence officials alleged to have colluded in torture since 9/11, but also the identities of the senior figures in government who authorised those activities. . . . Those who have been most bitterly resisting an inquiry -- including a number of senior figures in the last government -- may have been dismayed to see the Conservative-Liberal Democrat coalition formed, as this maximised the chances of a judicial inquiry being established.

Glenn Greenwald describes the mindset of Barack Obama, who claimed during the 2008 election that it was his desire to hold the Bush junta to account for their crimes.  To date the Obama administration has held none of the fiends who lied and took America to war on bogus premises, engaged in wholesale torture across the globe, and violated the Geneva conventions.  George W. Bush has already admitted that he knew his top national security advisers discussed and approved specific details of the CIA's use of torture.  Earlier this month, he further admitted that "Khalid Sheik Mohammed, the self-proclaimed mastermind of the 9/11 attacks, was waterboarded by the US, and said he would do it again 'to save lives'." This is consistent with Dick Cheney's bold statement to the world, back in February,where he announced that he was a "big supporter of waterboarding."

Andrew Sullivan and Scott Horton have both said that president Obama and his AG are now obligated to prosecute both Messrs Bush and Cheney.

[T]he attorney general of the United States is legally obliged to prosecute someone who has openly admitted such a war crime or be in violation of the Geneva Conventions and the UN Convention on Torture. For Eric Holder to ignore this duty subjects him too to prosecution. If the US government fails to enforce the provision against torture, the UN or a foreign court can initiate an investigation and prosecution.... Cheney himself just set in motion a chain of events that the civilized world must see to its conclusion or cease to be the civilized world. For such a high official to escape the clear letter of these treaties and conventions, and to openly brag of it, renders such treaties and conventions meaningless.

How far down the rabbit hole have we all gone, where the Conservatives of Britain are willing to hold their people to account, while the Obama administration gives the worst government in the history of the American republic another "get-out of jail" card and the press doesn't bother talking about any of it?

Quote of the Day: New Labour is a Parasite!

George Monbiot in yesterday's Guardian UK describes why Gordon Brown's new Labour cannot be trusted any longer:

There's a parasite called Toxoplasma gondii that colonises the brains of rats, altering their behaviour to attract them to the scent of their predators. The rats seek out cats and get eaten, allowing the parasite to keep circulating. This is New Labour. It has colonised a movement that fought for social justice, distribution and decency, rewired its brain and delivered it to the fat cats who were once its enemies.

He challenges the voters in the UK to admonish the most right-wing government in the UK since 1945.  The party that once claimed to support working class people, introduced legislation that criminalized public protest, eviscerated civil liberty laws, engaged in torture, subordinated national defense and international affairs to Washington's Imperial whims, and turned the nation into a quasi-police state, with more CCTV cameras than anywhere in the world and a 41% increase of prisoners since Labour took office.

UK Conservative Party Candidate Believes Gays are Possessed!

Today's Guardian newspaper has a story that speaks about the bizarre socio-political beliefs of Mrs. Philippa Stroud, who is "a high-flying prospective Conservative MP, credited with shaping many of the [Conservative] party's social policies, [and] founded a church that tried to 'cure' homosexuals by driving out their 'demons' through prayer."

As ridiculous as the claims appear, Ms. Stroud is not being misrepresented by the center-left newspaper.  In her book, God's Heart for the Poor, she discusses how to deal with people showing signs of "demonic activity". For example, an excerpt below should provide any rational person evidence of her enlightened state of mind:

One girl lived in the hostel for some time, became a Christian, then choked to death on her own vomit after a drinking bout. Her life had changed to some extent, but we wondered whether God knew that she hadn't the will to stick with it and was calling her home.

They wondered if an omniscient, omnipresent, and omnipotent deity, who supposedly created this woman and for whatever reasons allowed her to become possessed, knew the girl was a "loser" to which they could not cure.

I realize that this is election season in the UK and these outcropping of absurdity are bound to avail themselves.  However, these religious fanatics, election time or not, aren't doing anyone a favor by proselytizing this rubbish and engaging in what is clearly psychological abuse. 

The fact that this woman is not your average nutter, but a prominent member of the Conservative Party and a close confident of David Cameron, the Conservative party's leader, should convince everyone that these jackasses will never change and need to be permanently exiled to some Scottish island in the North Sea, where they can believe all the dogmatic malarkey they wish and practice their bizarro-land witchcraft preferably on their own rancid offspring or a stray local goat.

Religious frauds are a danger to us all.  And if 9-11 has taught anyone anything, it is the portentous evil that can be caused by zealots of all stripes advancing their religious objectives upon civilized people.

You should know Nick Clegg and the Lib Dems

For Americans, Nick Clegg, the leader of the UK"s Liberal Democratic Party, remains a nobody.  After all who in the land of rape and honey would know about the leader of a party which at the dissolvement of parliament held a meager 3rd place standing in Westminster?  However, something extraordinary has happened since the first television debate held between the three leading parties a couple of weeks ago to which all persons in the West should be aware of. 

The people of Britain, who to this day remain weary of the Thatcherites and the mealy-mouth platitudes of the Conservative party and have grown equally unsatisfied with the perennial deceit of New Labour, decided that maybe it was time to give someone else a chance at governing.  The Liberal Democrats in the past few weeks have rocketed in national polls from 3rd place standing  to overtake both the Conservatives and Labour at different times.

Unlike the twedledum and twedledee politics of Labour and the Conservatives, the Liberal Democrats have embraced real ideas and proposed real changes to make the UK a better and different place.  As today's Observer newspaper states,

The Lib Dems have in recent years developed a habit of getting things right. They were first of the big three to embrace environmentalism, first to kick back against the assault on civil liberties, alone in opposing the Iraq war.

However, it is Mr. Clegg who has infused the imagination of those who dare to think that the lesser of two evils is no longer an acceptable choice.  Unlike the slick talking David Cameron, leader of the Conservatives, and the woefully dour Mr. Brown of Labour, Mr. Clegg appeared during those debates to be a very rare type of politician: a man with principles who could generally be described as decent. The Observer editorial elaborates,

Mr Clegg's mettle cannot be fully tested until he is in office. But he did manage, in the televised leaders' debates, to articulate sensible, liberal positions on immigration and on European integration that many Labour ministers might share but would be afraid to express. He resisted the temptations of casual populism and stated his case with passion and clarity.

On this side of the Atlantic, Andrew Sullivan's blog has been providing us with many key quotes and analysis during the British election.  Yesterday, he posited a quote made by Mr. Clegg that I thought was beyond anything I have heard from any serious politician during an election:

Every time I go back to Beckett he seems more subversive, not less; his works make me feel more uncomfortable than they did before. The unsettling idea, most explicit in Godot, that life is habit – that it is all just a series of motions devoid of meaning – never gets any easier.

It's that willingness to question the things the rest of us take for granted that I admire most about Beckett; the courage to ask questions that are dangerous because, if the traditions and meanings we hold so dear turn out to be false, what do we do then?

But amid the bleakness, there is also humour, and it's no surprise that there are so many comedians among Beckett's fans. His appeal lies in his directness – the sparse, unembellished prose that can make his meticulous stage directions unexpected. He leaves you with a sense that you knew what he meant, even if explaining it back would leave you lost for words. Direct and disturbing – it is impossible to grow tired of Beckett.

Can you imagine George W. Bush and his armada of maladroits possibly contemplating Beckett, much less philosophizing on the inherent existential meanings of his work?  In America, politicians that don't spout prefabricated and dogmatic responses are feared as subversive elite who couldn't possibility understand the woes of self-absorbed fatties who blame the world for their ills!

The people of the UK have a once in a lifetime chance to simultaneously throw-the-bums-out and reform their government while embracing modernity, everyday environmentalism, and pro-Europeanism in a single vote.  I wish them and Nick Clegg much luck on Thursday.

The Definition of Human Selfishness

Representatives of the human race have voted and decided to liquidate another species in the name of Mammon and short-term economic gain.

Delegates from 175 countries, representing the Convention on International Trade of Endangered Species of Wild Fauna and Flora, voted on a series of measures to eliminate international trade on the Bluefin Tuna and a variety of other animals that are posed for extinction.  According to the Washington Post,

The adult population of eastern Atlantic and Mediterranean bluefin tuna has declined 74 percent over the past half-century, much of it in the past decade, and the population has dropped 82 percent in 40 years in the western Atlantic.

The proposal originally initiated by Monaco and agreed upon by the USA and several EU states, failed to achieve a majority position at the Doha, Qatar conference; with 20 nations in favor, 68 against and 30 cowards abstaining. 

Japan the greatest consumer of worldwide Tuna, imports nearly 80 percent of commercially traded Atlantic bluefin.  Similar to its extensive campaign to dissuade any international body from preventing it from harvesting whales, Japan has used its considerable economic clout to prevent limitations on any trade embargo or harvesting constraints in international waters.  Few deny that the motivations behind their stance are purely commercial.  As Susan Lieberman, director of international policy at the Pew Environment Group said, "This was a case of just plain ignoring the science for short-term economic gain."

Japan is not alone in its posturing; however.  Canada, a country that has made itself into an environmental pariah by its fealty to dirty oil-sands production and the persistent refusal by its conservative government to acknowledge and address climate change, has actively sided with the Japanese on the tuna issue.  Canada's Minster of Fisheries, Gail Shea, applauding the defeat of the trade ban and touting Canada's own policies, which have permitted over the decades the devastation of Atlantic fisheries and the current collapse of Pacific Sockeye Salmon.  So when Canadians say they have a plan to manage fishery stocks, you can be certain that that species will be decimated.

To highlight the absurdity of the entire trade system, consider how Bluefin Tuna is cultured in Spanish waters; as relayed by the BBC.  The fish are initially kept alive in off-shore pens, where they are fed vast amounts of expensively caught fish (around 10-kg of feed fish serve to make the tuna put on 1-kg of body weight).  They are then harvested by hand using divers, packaged at a purpose-built factory, and flown -on the same day- to Asian markets.  All this so some silly twit can eat sushi with his/her choice of dipping sauce.

***

Additional background stories and commentary on this subject can be found here, here, and here.

Icelanders tell UK & Dutch Governments to Screw Themselves!

I was hoping to find a newspaper somewhere, anywhere declaring solidarity with the people of Iceland against the tyranny of the high-priests of high-finance.  But alas nary a headline could be found stating "We are all Icelanders Now!"

To review, in 2008 all three of Iceland's banks collapsed due to their inability to refinance short-term debt and a concomitant run on deposits by European clients who had sought the supposed advantages of high-interest accounts offered by these banks and their Internet subsidiaries (i.e. Icesave).  The commercial collapse crippled the Icelandic economy and precipitated a severe economic recession that devalued the nation's currency by 90%, contracted GDP by 5.5% within the first six-months of 2009, and has already been estimated to exceed 75% of Iceland's GDP in total cost.  

In what may have become the most obscene misuse of legal authority, the government of the UK used anti-terrorism rules to take control of assets held in Britain by Landsbanki Islands hf.  Stephen Timms, financial secretary to the Treasury, said in Britain's Parliament that "To protect U.K. economic interests the government has frozen the funds and financial assets held by Landbanksi."  When Landsbanki failed, the UK government bailed out its citizens deposits.  However, the UK made it clear that it wanted this money returned from the Icelandic government, despite the fact that it never guaranteed the deposits.

In December 2009, the President of Iceland vetoed a bill, pushed by the UK and Netherlands, that would have effectively placed a usurious burden upon the citizens of Iceland by their European counterparts, for what was effectively bad private investments made by Europeans looking for easy money.  According to the Economist magazine:

The Landsbanki debts alone amount to over €12,000 for each of the country’s 320,000 citizens; total debts are approaching 1,000% of GDP. Such sums would take many decades to repay, and would strangle the economy in the meantime.

In addition, the governments of the UK and Netherlands have made both public and private threats that they were willing to force Iceland off the cliff and into financial oblivion.  The threats have including denying Iceland the opportunity for future EU membership and freezing current IMF loans, unless the citizens of the sovereign nation accepted Treaty of Versailles-like repatriations.  For example, the deal would require each Icelander to pay approximately $135 USD a month for eight years; the equivalent of 25% of an average four-member family's salary.

A referendum at the beginning of this month (March 2010) on the specifics of the debt-repayment scheme was rejected by more than 93% of the Icelandic population.  As the Christian Science Monitor notes:

a large portion of voters viewed the deal as an unfair result of their own government's failure to curtail the recklessness of a handful of bank executives, including those who expanded operations to seduce British and Dutch customers with generous returns from online savings.

Furthermore, another perspective is that Icelanders are convinced that the UK/Dutch duo are acting in bad faith and demanding excessive requirements on a country that provided the chieftains of high-capital exactly what they wanted: banking deregulation, pro-business policies, trans-national mobility of capital, and favorable financial products for European clients.  

What the citizens of the West should be saying is that the blackmailing of the people of Iceland by the dunces who have shown themselves equally inept at running their own economies, is not acceptable.  None of these assholes should be telling anyone what to do with their money.  All these bankers and useless government charlatans who turned a blind eye when the priests of high-capital were doing their dirty deeds need to be hung from a tree for facilitating the greatest economic collapse in human-history.  Instead the media has dismissed the issue as a peripheral item about a small and relatively unimportant country that grew too fast and too big.