Iceland 1 - IMF 0

This is a re-post from Before It's News describing how the Icelandic solution to the economic crisis was the right one. It also goes into what's wrong in the first place.

“Now in what may be the greatest economic “mea culpa” in history, we have the media admitting that this government/banking/propaganda-machine troika has been wrong all along. They have been forced to acknowledge that Iceland’s approach to economic triage was the correct approach right from the beginning.  What was Iceland’s approach? To do the exact opposite of everything the bankers running our own economies told us to do. The bankers (naturally) told us that we needed to bail out the criminal Big Banks, at taxpayer expense (they were Too Big To Fail). Iceland gave the banksters nothing.”

IMF Admits Iceland Was Right:…the island’s approach to its rescue led to a “surprisingly” strong recovery, the International Monetary Fund’s mission chief to the country said

Subject: FW: Iceland Was Right, We Were Wrong: The IMF

By Jeff Nielson08/15/12 – 03:14 PM EDT

VANCOUVER (Silver Gold Bull) — For approximately three years, our governments, the banking cabal, and the Corporate Media have assured us that they knew the appropriate approach for fixing the economies that they had previously crippled with their own mismanagement. We were told that the key was to stomp on the Little People with “austerity” in order to continue making full interest payments to the Bond Parasites — at any/all costs.

Following three years of this continuous, uninterrupted failure, Greece has already defaulted on 75% of its debts, and its economy is totally destroyed. The UK, Spain and Italy are all plummeting downward in suicide-spirals, where the more austerity these sadistic governments inflict upon their own people theworse their debt/deficit problems get. Ireland and Portugal are nearly in the same position.

Now in what may be the greatest economic “mea culpa” in history, we have the media admitting that this government/banking/propaganda-machine troika has been wrong all along. They have been forced to acknowledge that Iceland’s approach to economic triage was the correct approach right from the beginning.
What was Iceland’s approach? To do the exact opposite of everything the bankers running our own economies told us to do. The bankers (naturally) told us that we needed to bail out the criminal Big Banks, at taxpayer expense (they were Too Big To Fail). Iceland gave the banksters nothing.

The bankers told us that no amount of suffering (for the Little People) was too great in order to make sure that the Bond Parasites got paid at 100 cents on the dollar. Iceland told the Bond Parasites they would get what was left over, after the people had been taken care of (by their own government).

The bankers told us that our governments could no longer afford the same education, health care and pension systems which our parents had taken for granted. Iceland told the bankers that what the country could no longer afford was to continue to be blood-sucked by the worst financial criminals in the history of our species. Now, after three-plus years of this absolute dichotomy in economic policymaking, a clear picture has emerged (despite the best efforts of the propaganda machine to hide the truth).

In typical fashion, the moment that the Corporate Media is forced to admit that it has been serially misinforming us for the past several years; the Revisionists are immediately deployed to rewrite history, as shown in this Bloomberg Businessweek excerpt:
…the island’s approach to its rescue led to a “surprisingly” strong recovery, the International Monetary Fund’s mission chief to the country said.

In fact, from the moment the Crash of ’08 was orchestrated and our morally bankrupt governments began executing the plans of the bankers, I have written that the only rational strategy was to put People before Parasites. While I wouldn’t expect national policymakers to take their cues from my writing, when I wrote out my economic prescriptions for our economies I didn’t base my views on compassion, or simply “doing the right thing.”

Rather, I have consistently argued that it was a matter of simple arithmetic and the most-elementary principles of economics that “the Iceland approach” was the only strategy which could possibly succeed. When Plutarch wrote 2,000 years ago “an imbalance between rich and poor is the oldest and most fatal ailment of all Republics,” he was not parroting socialist dogma (1,500 years before the birth of Socialism).
Plutarch was simply expressing the First Principle of economics; something on which all of the modern capitalist economists who followed in his footsteps have based their own theories. When modern economists produce their own jargon, such as the Marginal Propensity to Consume; it is squarely based on the wisdom of Plutarch: that an economy will always be healthier with its wealth in the hands of the poor and the Middle Class instead of being hoarded by rich misers (and gamblers).

So when the Bloomberg Revisionists attempt to convince us that Iceland’s strong (and real) economic recovery was a “surprise”; this could only be true if none of our governments, none of the bankers and none of the media’s precious “experts” understood the most-elementary principles of arithmetic and economics. Is this the message the media wants to convey?

What is even more disingenuous here is the congratulatory tone in this exercise in Revisionism, since nothing could be further from the truth. As I detailed in a four-part series one year ago, the campaign of “economic rape” perpetrated against the governments of Europe over the past two and half years (in particular) has been expressly designed to take away “the Iceland option” for Europe’s other governments.
One of the reasons for Iceland being able to escape the choke-hold of the Western banking cabal is that its economy (and its people) still retained enough residual prosperity to tough it out — as the banking cabal tried to strangle Iceland’s economy as retribution for rejecting their Debt Slavery.
Thus, austerity has been nothing less than a deliberate campaign to destroy these European economies so that the Slaves would be too economically weak to be able to sever their own choke-holds. Mission accomplished!

One can only assume that neither the Corporate Media nor their Banker Masters would have allowed this clear acknowledgment that Iceland was right and we were wrong to appear within its own pages, unless it felt secure in the knowledge that all the remaining Debt Slaves had been crippled beyond their capacity to ever escape this economic oppression.

Indeed, for evidence of this we need only look to Greece: the one other European nation where there had been “rumblings” (i.e. riots) aimed at toppling the Traitor Government that served the banking cabal. After two elections, the combination of fear and propaganda bullied the long-suffering Greek people into choosing another Traitor Government — which had expressly pledged itself to reinforcing the bonds of economic slavery. When the Slaves vote for slavery, the Slave Masters can afford to gloat.

Here, the purpose of this Bloomberg propaganda was not to praise Iceland’s government (when both the bankers and Corporate Media despise Iceland with all of their considerable malice). Rather, the goal of this disinformation was to manufacture a new Big Lie.

Instead of the Truth: that from Day 1 Iceland’s approach was the only possible strategy which could have succeeded, while our own governments chose a strategy intended to fail; we get the Big Lie. Our Traitor Governments were acting honestly and honourably; and Iceland’s success and our failure was yet another “surprise which no one could have predicted.”

We saw precisely the same Revisionism following the Crash of ’08 itself, where the mainstream media trotted out all their expert-shills to tell us they had been “surprised” by this economic event; while those within the precious metals sector had been predicting precisely such a cataclysm, in ever more-assertive terms, for several years.

The real message here for readers is that when an economic strategy of People before Parasites succeeds that there is nothing the least-bit “surprising” about this. As with all the remainder of the world around us, promoting the health of Parasites is only good for the Parasites themselves.

This article is commentary by an independent contributor, separate from TheStreet’s regular news coverage.

Corporate Welfare Deadbeats

Not only are corporations robbing countries of billions (trillions world-wide) of tax revenue while being giving low tax rates on the money they do claim, they are hording the wealth that they let us know about instead of using it to improve the economy. The rest is hidden in shell-companies in tax havens invoiced so it doesn’t appear as profit. Thanks Harper and you other neoliberal scum for making it even easier, and thank you Royal Bank and Scotia Bank for setting up these tax evasion schemes (as well as the countries in some cases) and bankrupting countries so they have to borrow. It’s a nice vicious little circle you have built. 

The following is a re-post of an article from Rabble.ca showing how corporations are pushing for lower wages and union-busting while hoarding cash. Harper is doing all he can to help them, so they will give him a cushy job when we finally kick him out (to go with the cushy pension he hasn’t earned). 

Corporations aren’t job creators; they are exploiters, robbers and would like to be slave owners. Multinational ones take this attitude to the level of a country. They are bringing our society down for shareholder profit and management bonuses.

Dead money and corporate cash hoarding

By Toby Sanger

| August 24, 2012

Kudos to Bank of Canada Governor Mark Carney for raising the profile of the over $500 billion Canadian corporations are holding in excess cash surpluses and not investing in the economy, which garnered front-page coverage (and kudos to the CAW for inviting him to speak.)

It's not the first time he's raised this concern. Last year at the Empire Club he told assembled business leaders that their companies were in "rude health, have the means to act -- and the incentives," urging them to invest their surpluses. After cutting corporate tax rates, Finance Ministers Flaherty and Duncan have also demonstrated frustration with Canadian businesses for not investing enough in the economy and urged them to invest more.

Contributors to this blog, including Jim Stanford, Erin Weir, Andrew Jackson and myself have raised concern about corporate Canada's growing corporate cash hoards and surpluses for much longer.

It's important to recognize that this half a trillion didn't just fall from the sky into the corporate coffers. As I pointed out on page 6 of this piece published in early 2007, the growing corporate surpluses ($300 billion at that time) represented an unprecedented shift in the balance between household and corporate sectors.

Prior to a dozen years ago, Canada's household sector had traditionally run surpluses which were then lent to corporations to invest in the economy. As a result of slow wage growth, high profits, corporate tax cuts, rising house prices, and slow rates of business capital investment, that relationship completed changed around 2000 -- and it's got much worse. Above is an updated version of the slide, which I've used in many presentations since.

The flip side of the growth of these unprecedented corporate surpluses and the resulting growing cash hoards is of course record rates of household indebtedness -- which is a major threat to our economy. While there's always alarmism about government sector deficits, one of the underlying problems that helped cause the crisis and is a factor in our slow rates of growth was this imbalance and the growing rates of household indebtedness.

It's not just Canada, but similar trends occurred in the U.S. and Europe. And it's a double-edged sword. While CEOs may claim their surpluses and cash hoards are a buffer against economic uncertainty (as Matt Campbell did in the Globe), much of the non-financial corporations surpluses ultimately went into the increased financial speculation that caused the financial and economic crisis. In these ways, it's not "dead money" any more than zombies are dead: it's money that, while seeming to keep their hosts alive, has played havoc with the rest of us. Even the OECD and the IMF now seem to recognize to some degree that growing inequality of income (and between sectors of the economy, which is related) is bad for the economy.

Our finance ministers have used tax cuts, low interest rates, wage suppression, deregulation, etc. etc. ostensibly to get corporations to invest more of their profits and surpluses in the economy -- but it hasn't worked. Now they (and Carney) are trying to use moral persuasion, but that's unlikely to work either.

Capitalism, in its different forms, isn't supposed to be swayed by any morals beyond its own: maximizing short-term profits. If CEOs don't see any potential reward for making an investment (whether through profits or personal reward through share buybacks and stock options), then they aren't likely to do it. And if there's a lack of demand for their products, then they aren't going to invest.

Returning excess cash to shareholders, as Carney urged them to do if they aren't going to invest, isn't going to help much either. While pension funds could also benefit, much of this will go to the wealthiest in society. This will not only lead to less economic stimulus (as they have a lower propensity to spend), but it will also increase inequality and economic instability -- as even the IMF, OECD and Conference Board now recognize. And if the wealthy are to invest it, where would they invest it: back into companies that aren't investing in the economy, speculative financial investments, or into more real estate, blowing up that bubble even more?

There's a simple and straightforward solution. If corporations aren't going to invest despite all that's been provided to them, then governments should tax these surpluses back through various means and use the revenue to increase public investment in the economy and redistribute the wealth to reduce inequality including by expanding public services, which will go a long way to improving the precarious state of household finances.

(Of course, we're not going to get much of this from most of our existing governments. With the failure of supply-side economic policies in stimulating investment and the economy, I expect that Flaherty and Co. will instead accelerate privatization and P3s in their coming budgets: essentially handing over public assets and investment opportunities at the public's expense on a platter to private business who are failing to invest money into the private sector.)

This article was first posted on the Progressive Economics Forum.