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Icelandic PM becomes world’s first leader to step down over banking system crisis
Valur Gunnarsson and Mark Tran, The Guardian
The global economic crisis claimed its first leader yesteday, as Iceland’s prime minister announced the immediate resignation of his government following the collapse of the country’s currency and banking system.
Geir Haarde said as recently as Friday that his coalition would remain in office until early elections, called for 9 May, after violent protests at its handling of Iceland’s tottering economy.
… The prime minister’s previous national popularity was obliterated in October when the global credit crisis ravaged Iceland’s hugely indebted economy, leading to a collapse in the country’s currency, the crown, and forcing the government to take control of its three major banks.
The population of 320,000 – who had enjoyed years of rising incomes and high growth rates, thanks in no small part to an economy burdened with a foreign debt that peaked at 10 times the annual national GDP – now face a potential economic contraction of up to 10% this year, with unemployment rising rapidly.
(27 January 2009)
Bad news: we’re back to 1931. Good news: it’s not 1933 yet
Ambrose Evans-Pritchard, Telegraph (UK)
Barack Obama inherits an economy already contracting at an annual rate of 6pc, much like the mid-Depression year of 1931 (-6.4pc).
This may beat Germany (-7pc) Japan (-12pc) and Korea (-22pc) over the fourth quarter. But that merely underlines the dangers ahead as the collapse of global trade chokes the mini-boom in US exports, setting off another stage of the crisis.
The US is losing 500,000 jobs a month. Brazil lost 650,000 in December. Beijing says 10m Chinese have lost their jobs since the crunch began. Japan’s exports fell 35pc last month, year-on-year. The central bank is printing money furiously, buying bonds to prevent a relapse into deflation.
So yes, it is like early 1931. Citigroup and Bank of America have more or less disintegrated. JP Morgan’s health is failing fast. General Motors and Chrysler survive only on life-support from the US taxpayer.
But it is not yet like 1933. That second leg down was the result of “liquidation” policies by a Dickensian leadership blind to the dangers of debt deflation.
(26 January 2009)
Repudiate the Carter Doctrine
Michael Klare, Foreign Policy in Focus
Twenty-nine years ago, President Jimmy Carter adopted the radical and dangerous policy of using military force to ensure U.S. access to Middle Eastern oil. “Let our position be absolutely he clear,” he said in his State of the Union address on January 23, 1980. “An attempt by any outside force to gain control of the Persian Gulf region [and thereby endanger the flow of oil] will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.”
This principle — known ever since as the Carter Doctrine — led to U.S. involvement in three major wars and now risks further military entanglement in the greater Gulf area. It’s time to repudiate this doctrine and satisfy U.S. energy needs without reliance on military intervention.
(22 January 2009)
