Corporations are not our friends. They do not have our best interests at heart. They don't care about you or your economic well-being.
It's time we did something about that.
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Mainly out of some vestigial attachment to his birth region, Fosco has found himself covering the complete economic collapse of Elkhart, Indiana (former RV capital of the world!). Thanks to the BeeMaster and his Consort, Fosco has a bit of good news to share:
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The first part of a two-part post on the Icelandic economic crisis. 
Fosco has mentioned before that he loves Iceland immoderately. He and his college roommate lboom went to Iceland twice in the late 1990s and fell in love with the place. So much so that Fosco has fantasies about living the rest of his life in coolest city in the world, Reykjavík. That way, he could spend at least one day a week submerged in the coolest spa in the world: the Bláa lónið (aka the Blue Lagoon. No, not that one).
Sadly, you've probably heard that things in Iceland aren't very stress-free as of late. As Fosco noted last fall, Iceland's entire banking system has collapsed. Fosco is actually surprised that this story hasn't received more press attention so far. After all, the media usually loves disasters when they happen to white people (and Icelanders are indeed quite white--almost transparent, actually). Maybe the Icelandic crisis just can't compete with our own American crisis (although Iceland's in a lot more trouble); or perhaps no one wants to suggest that what could happen in Iceland could perhaps happen elsewhere (like here).
Whatever the reason, Fosco is here to fill in the blanks. This is what you need to know about the Icelandic financial crisis.
One thing about Icelanders: they are a generally a practical and reasonable people. During the immediate aftermath of their economic collapse, foreign reporters had a hard time finding much of a "human story," owing to a general lack of hysteria. This piece from The Daily Beast found one major difference: "No One's Eating Pie Anymore." Hmmm. What could that mean?
In some ways, Icelanders are a lot like Americans. They look like they’re from Portland, Maine. I attended a party here and the host cooked three pies: apple, pumpkin and pecan – then we all sat around and watched the U.S. presidential debate. To say that these people are more dedicated to U.S. politics than Americans is an understatement.Part of the reason for the lack of despair, the article notes, is that Icelanders aren't terrified by the possibility of poverty:
[...]
Until food and supplies run out, the country remains in the quiet before the storm. During the first week, the main shopping street was jammed with cars filled with families driving slowly, aimlessly. They didn’t know what to do. The restaurants were empty. The only rejoicing to be found was in expat hangouts, where dollars, recently worth 70 krona, were suddenly worth 150.
Maybe Americans could learn that kind of equanimity... but I'm not holding my breath.It’s only as the long slow slide continues that Icelanders will make it very clear that they’re not like Americans. Americans don’t know how to be poor. Witness the millions of us who live totally on credit, and the fact that we have no idea how to sustain ourselves. We make reality TV shows about our attempts at hunting and survival, while Iceland was still a poor farming country just twenty years ago. There’s an old guy in Reykjavik who grew up in a nearby cave. Yeah, caveman. They may look like us and talk like us, but they can also do stuff like farm and knit and fish. The editor of one of the two major newspapers here told me, “I’ve always assumed that if my editing or music career doesn’t work, I can always gut fish.” It was his teenage job.
Of course, that doesn't mean that some Icelanders weren't angry. Take pixie chanteuse Björk, for example. Right after the collapse, Björk wrote an editorial noting that the Icelandic government was planning to use the economic crisis as an opportunity to grant aluminum rights to environmental rapists like Alcoa and Rio Tinto, rights that would cause a great deal of environmental damage to Iceland. As Björk notes:Usually I don't notice politics. I live happily in the land of music-making. But I got caught up in it because politicians seem bent on ruining Iceland's natural environment. And I read last week that, because of the crisis, a number of Icelandic MPs are lobbying for the environmental assessment to be ignored so that the dams can be built as quickly as possible to give Alcoa and Rio Tinto the energy they need for the two new smelters.Yes, the "I don't notice politics" line is annoying as hell; but she's exactly right about the rest of it. It may be an economic collapse for the Icelandic people, but it looks like it's Christmas for Alcoa! Whee!
So things were looking pretty bad last fall; and then know what made them worse? Gordon Brown. As in Prime Minister of Great Britain. You see, before the collapse, because Iceland's banks were crooked and incompetent, they were returning a great rate of interest. Consequently, many British municipalities, pensions, charities, etc. decided to invest their money in Icelandic accounts. When the banks failed and were seized, those assets were frozen. This angered Britons and their Government responded: by seizing all Icelandic assets in Great Britain under the legal authority of anti-terrorism laws. Yoink! Being treated like terrorists rankled Icelanders apparently. As this article noted, law-abiding residents of Iceland were a tad angry about being compared to terrorists:"Ordinary Icelanders are no more responsible for the risk-seeking businessmen who happen to hold our passport than the people of north London are responsible for the destructive behaviour of the talented Amy Winehouse," said Icelandic professor Eirikur Bergmann Einarsson in the Guardian.Well-played, Professor Einarsson.
(And yes, every living person in Iceland--of any age--is extraordinarily beautiful.) There are now tens of thousands of these photographs; you can browse them here.Over the past eight years, America ceased being the City on the Hill, shining its light to the rest of the world. America and Britain closed the NATO air base in Iceland, and have made no offer to help Iceland in its time of trouble. We need help, not only to break down the old power structure, rotten to the core, but also to prevent it from being rebuilt. We desperately need stability, economic assistance, impartial advice, and fair supervision.Clearly, Obama has other priorities, Iris. Could we interest you in a (slightly-used) Dick Cheney?
Barack Obama, a nation turns its lonely eyes to you. Please!
Sure enough, days later the Icelandic Government collapsed and a caretaker coalition took over (crazy Parliamentary system!) until new elections can be held. The new Icelandic Prime Minister is Jóhanna Sigurðardóttir, the first woman Prime Minister in Icelandic history and the first openly gay world leader (although there are still those pesky rumors about Stephen "Mr. Gropey" Harper). You've got to hand it to Iceland: even when their country is on the verge of dissolution, they manage to elect an elegant lesbian GILF as Prime Minister! Now that is style.Here you will find Icelandic news translated to English. I lost my job at the end of October as a result of the depression so, for now, I consider my job to be translating Icelandic news for those of you who are interested in this crisis that is shaking the very foundations of the Icelandic society.Once again, we have to admire the Icelandic spirit. Unfortunately, the translations provided are not always so good (for one thing, newspaper articles never provide enough context for a foreign audience). And, for another thing, I think the translator's command of English is a bit imperfect (although much better than Fosco's command of Icelandic, natch). Here's a great line from an obituary of an Icelander who taught in the US:
He was a teacher of literature and penmanship at the Southwest Minnesota state university for the past 27 years.I'm going to go out on a limb and say that he probably taught "writing." Of course, when Fosco laughs at a translation mishap like this, he's mostly just laughing to drive away the tears. Poor Iceland!
Fosco doesn't like to write about our ongoing economic collapse. For one thing, it's hella depressing. For another thing, Fosco is no economist and he truly believes that, with the exception of maybe thirty or forty people in this country (including David Harvey), no one else knows what they're talking about when it comes to the economics of this mess. And so it's probably better for all of the know-nothings (Fosco included) to shut up and cede the field to people who know something.
But that doesn't mean that there aren't occasionally stories that need to be told. Nor does that mean that stupid ideas shouldn't be mocked. And so, Fosco brings you a roundup of several notable stories from the last week or so of economic melting...
In a new report, the IMF says poor countries face greater exposure to the current crisis because they are more integrated into the international economy than they used to be.I don't know why this is a surprise to anyone. Either way, it's more bad news for the global poor.
They are likely to feel the impact through a downturn in trade and falls in foreign investment and remittances - money sent home by people working abroad, the fund adds.
The report says more than 20 countries, half of them in Sub-Saharan Africa, are particularly vulnerable.
Speaking of global collapse, things aren't too rosy in Ireland, either. Hey, remember when Walnuts McCain touted all the magically delicious Irish corporate tax policy? I'm not sure that's working too well, right now.The government is simultaneously raiding the National Pensions Reserve Fund for euro7 billion ($8.8 billion) to support the country's two biggest banks and has taken over a scandal-stricken third, Anglo Irish, after its directors were discovered hiding their own loans and losses.Fosco is certainly on board with punitive seizure of the assets of the crooks who fucked everything up. But, even more so, Fosco loves the idea of taxing the hell out of U2--mainly because of their terrible new CD.
More than 100,000 workers marched last month on the parliament to demand that the nation's tax-exile elite — and even its billionaire rock icons, U2 — be forced to pay far more to keep their country from drowning in red ink.
Unions representing 700,000 workers in this country of 4 million are balloting members to strike, among them the Irish Nursing Organization. It argues that the government should be seizing the assets of bankers and property developers who helped bring one of Europe's most vibrant economies to its knees, not squeezing life-and-death services.
I'm sure the whole Madoff saga could be sadder: it could still be revealed that his primary investors included a litter of terminally ill puppies. But, in the absence of dying baby animals, this might be the next saddest thing. You know Holocaust survivor and Nobel Peace Prize-winner Elie Wiesel? Well, Madoff stole his money. And not just his money, but the entire endowment of Wiesel's foundation--a foundation with the mission "to combat indifference, intolerance and injustice through international dialogue and youth-focused programs that promote acceptance, understanding and equality." As this article notes: He said the Elie Wiesel Foundation for Humanity had $15.2 million under management with Bernard L. Madoff Investment Securities, substantially all of its assets. Wiesel said he and his wife also lost personal investments, but he did not disclose the amount.And now, the eighty-year-old Wiesel is faced with a nasty moral dilemma in the twilight of his life: how to respond to someone like Madoff? Well, as far as Fosco is concerned, Wiesel has made the right choice: refusing forgiveness.
"Could I forgive him? No," Wiesel said during a discussion, "Madoff and the Meltdown," hosted by Conde Nast Portfolio magazine. "First of all, it would mean he would come on his knees and ask for forgiveness. He wouldn't do that."Even if he did, I hope Wiesel could find it in his heart to refuse forgiveness.
And this is where things start to take a turn toward the ridiculous. You know how greed, lack of regulation, and laissez-faire capitalism may be just a little bit to blame for our current troubles? So naturally the Bible of that brand of capitalism, Ayn Rand's Atlas Shrugged, is more popular than it has been in years. Wait. What?"This guy thinks he's got a big d--. He's got nothing, except maybe a boyfriend."Charming. Classy. Stop: you're both right!
before the public simply goes apeshit and starts burning down Greenwich, Connecticut.All I know is that people like Jimmy Cayne make me want to grab my torch and sharpen my pitchfork.
Some weeks, there's just too much to share with you, the Fosco Lives! reader. That's why you are now reading a "news digest" post, consisting of a bunch of stories that Fosco just can't not comment on.
As a professor, Rice has said, she hopes to lead future courses on international politics, with a focus on decision-making. Specifically, she seeks to teach "decision simulation," where students are pressed to think about real-life questions and choices and not just abstract policy.You know, decisions like: "Which war is the right war for you?" or "How many dead Iraqi civilians is too many?". Come to think of it, she's going to fit right in at Stanford.
There's more financial mumbo-jumbo to explain why Harvard is in trouble and it appears to have something to do with "dry powder." Fosco isn't quite clear on this concept, but he assumes it has something to do with the gunpowder that Harvard has amassed in the basement of Widener Library for the inevitable apocalyptic war against Yale in the End Times. Yale delenda est!
Which brings me to my point: prom would be pretty silly and ridiculous if it weren't so damned expensive (and mainly for the girls). But, as per this article in a recent Santa Cruz Sentinel, things will be easier for girls in Santa Cruz this prom season: Free Prom Dresses! Yes, thanks to a city councilman and a local dry cleaners, a buttload of donated prom dresses (and yes, the appropriate grouping adjective for a collection of prom dresses in indeed "a buttload"--look it up!) has been assembled for girls who cannot afford to purchase their own. Which is actually a pretty good thing, right? I almost think everyone should wear a recycled prom dress. After all, why should you buy a new dress when it's only going to get covered with alcohol/vomit and ripped by an overeager date rapist? Ah, good prom memories... 
Speaking of prison, did you see that former football-star Maurice Clarett is blogging from prison? You may remember Maurice Clarett as a star running back at the Ohio State University, who as a freshman, helped to lead that team to a National Championship. Or you may recall that Clarett then sued the NFL to allow him to enter the NFL draft a year early (he lost). Well, a few years later (after getting cut from several NFL teams) Clarett apparently committed an armed robbery and is now serving a seven and a half year sentence. 
A Santa Cruz aerial photographer just swept the "2009 Professional Aerial Photographers Association print competition," according to this piece in the Sentinel. You can see one of his winning images at right. The story behind the image itself is actually pretty amazing:Back in May, David Sievert flew to the Black Rock Desert of Nevada to preserve for posterity one of the ephemeral creations of Santa Cruz sand artist Jim Denevan.Crazy! Think of the work involved! And think about all of the ways that the drawing could have been destroyed:
Sievert circled for 40 minutes over a dry lake focusing on what Denevan hoped would be the world's largest freehand drawing. He spent a month and a half, using a stick to draw a series of circles, creating a composition three miles wide.
Then a variety of circumstances could have smashed Denevan's composition, sitting unprotected in the wild.Fosco has always had a soft spot for good "nature art" (like Robert Smithson or Andy Goldsworthy). And while the circles thing is indeed pretty cool in its ambition, I wonder if it could have been a little more interesting. Like what about a giant Oprah head? Oh wait, that's been done...
A ranger from the Bureau of Land Management drove out, wondering why Denevan had camped there and potentially jeopardizing the drawing.
"He didn't know what we were doing," said Denevan, who tried to explain. "We told him, Hey, when you leave, would you follow the lines?'"
Three days before Sievert was scheduled to arrive, a group of 30 machine gun enthusiasts in Hummers and pickups kicked up dust, heading straight toward the drawing.
Luckily, they turned toward Denevan's camping bus, assuming their leader was inside, thus leaving the drawing intact.
Even the weather cooperated.
"It rained like crazy a week later," Denevan said.
Another Fosco Lives! shout-out to his canuck friends M+L.
Sure, the people who live there speak some sort of weird moon-man language and eat horrible non-crispy bacon, but Canada is turning out to be the place to live in the midst of the world's financial meltdown.
As this op-ed in the NY Times notes:
America, the capital of capitalism, is pondering nationalizing a handful of banks. Meanwhile, Canada, whose banking system had long been notorious for its stodgy practices and government coddling, is now being celebrated for those very qualities.How can this be? Doesn't Canada have any financial brainiacs--you know, like the ones who brought down Wall Street? And with no hotshot banking jagoffs, I can't imagine that Canada has much demand for lapdances and cocaine. Oh, what a joyless land!
The Canadian banking system, which proved resilient in the global economic crisis, is finally getting its day in the sun. A recent World Economic Forum report ranked it the soundest in the world, mostly as the result of its conservative practices. (The United States ranked 40th).
Most people don’t know that the vision behind Canada’s banking system, made up of a few large, national banks with branches from coast to coast, actually had its beginnings in the United States. Canada’s system is the product of a banking framework inspired by Alexander Hamilton, the first American secretary of the Treasury.That's right, just like pretty much everything else (except bacon), Canadians learned banking from us and then did it better.
Fosco has been following the story of Harvard's financial dissolution for several months now. You may recall that, when we last checked, Harvard had lost 8 billion dollars from its endowment in 2008. But this week, new details have emerged. In this NY Times article, you can read a profile of Harvard's embattled Endowment Director, Jane Mendillo.
You have to feel for Mendillo, who took the job on July 1, 2008. How can you not admire timing like that? It's a little like being promoted to US Director of National Intelligence on September 10, 2001. If I were a Wall Street bank, I would have a standing job offer out to Mendillo. The day after she accepts it, you would know that it's time to sell.
But whether or not Mendillo got hosed by taking her new job, she still has to try to account for the largest endowment loss in forty years--a loss that has left Harvard short of the ready cash it needs to meet its immediate obligations. As the article notes:
Harvard has frozen salaries for faculty and nonunion staff members, and offered early retirement to 1,600 employees. The divinity school has warned it may not be able to cover tuition for all its students with need, the school of arts and sciences is cutting its billion-dollar budget roughly 10 percent, and the university president said this week than the unprecedented drop in the endowment was causing it to delay its planned expansion, starting with a $1 billion science center, into the Allston neighborhood of Boston.The delay on the Allston Science Center (pictured above) is actually the saddest part here, because it will mean an additional four to five years until Harvard students will have access to Laser Floyd.
The endowment was squeezed partly because it had invested more than its assets, a leveraging strategy that can magnify results, both good and bad. It also had invested heavily in private equity and related deals, which not only lock up existing cash but require investors to put up more capital over time.I don't really understand any of that, of course. But I'm pretty sure it means that Harvard is broke. All I know is that I keep getting emails every week or so from Harvard President
[...]
She has raised the equivalent of 3 percent of assets for a cash reserve. “For a long time, Harvard had a negative 5 position,” she said. “That means that 105 percent of the assets are invested at most times.”
When Fosco moved to Santa Cruz almost three years ago, the median home sales price was somewhere around $725,000. Median home sales price in January 2009: $430,000.
On the one hand, this is good news for the Santa Cruz middle class (most of whom cannot afford to buy in Santa Cruz County). On the other hand, this is a breathtaking loss of value.
And on the third hand, Fosco still could never afford to buy a home here.
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