During the heady times of economic growth, its banks expanded operations far beyond what the country could possibly support. When the global financial crisis came, all three collapsed. Millions of depositors in Britain and the Netherlands would have lost their savings.
When banks collapse nowadays, fortunately, governments intervene. The governments of both Britain and the Netherlands guaranteed the accounts of their citizens. In total, this cost said countries approximately 3.9 euros (or 5.3 billion dollars).
Understandably, said countries were also angered at picking up the tab of Iceland's failed banks. The root of Iceland's current troubles lies in their demands that Iceland repay the €3.9 billion. To force Iceland's hand, Britain - in a rather mean gesture - used anti-terrorism laws to freeze Iceland's financial assets. This helped crush the country's economy.
Now, there are two problems with the demands of Britain and the Netherlands.
Cross posted from Worldwatch Institute's Nourishing the Planet.
As Iceland's erupting volcano strands thousands of air travelers across Europe and worldwide, a less publicized but arguably more costly catastrophe is mounting 15,000 miles away: piles of gourmet produce and cut flowers, some of Kenya's chief exports, are rotting in limbo. Meant to be shipped to upscale grocery stores throughout Europe, lilies, roses, carnations, carrots, onions, baby sweet corn, and sugar snap peas are going bad in heaps, on the vine, and in the ground because airport warehouses are already full and there's no local market for the expensive produce in a country where half the population lives on less than a dollar a day.
As food prices continue to rise worldwide, reducing food waste will be a critical element in alleviating hunger and poverty worldwide. Already, Nourishing the Planet has highlighted the many ways that growing indigenous vegetables for local markets and improving storage techniques can help to both reduce food waste and improve access to food, in Kenya and elsewhere in sub-Saharan Africa.
To read more about food waste and ways it can be prevented, see: Reducing Food Waste, Finding Creative Ways to Grow Food in Kibera, Farming on the Urban Fringe, and Investing in Better Food Storage in Africa. Also, stay tuned for an entire chapter on the subject, written by Tristram Stuart, in State of the World 2011: Innovations that Nourish the Planet.
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Blaming sub-prime borrowers is a common mistake being made by most media reporting and the pundits. On the Friday, Oct. 10th, edition of NPR's All Things Considered, David Brooks was commenting on what the presidential candidates' were blaming as the cause of the economic meltdown, and he said, "They totally excuse the American people as if these sub-prime mortgages were forced upon people."
What I have been learning is that the titans of finance who created and traded unregulated securities of debt instruments and derivatives called Credit Default Swaps involving some $62 trillion are much more likely culprits in the worldwide financial collapse. Common sense tells me that bad mortgage loans, even in large numbers, could not be responsible for the tremendous losses required to affect the entire world markets, including bankrupting the country of Iceland. The Credit Default Swap market, however, was large enough to have this effect when that house of cards crumbled.
On behalf of sub-prime borrowers who must be feeling the guilt of causing the next great depression, I wrote the following letter to Mr. Brooks at the New York Times and to All Things Considered. A sub-prime borrower's apology for causing the crash.
Dear Mr. Brooks:
I heard you say on National Public Radio All Things Considered that sub-prime borrowers should take their share of the blame for the economic crash. At first, I thought things wouldn't get so bad, but now it seems that the entire world economy is collapsing. Frankly, I was just going to keep quite and hope no one would notice that I am one of the sub-prime borrowers. But listening to your explanation of the cause of this crisis has made me feel ashamed of what my wife and I have done. I want to come clean.
STATE BLOGS
As Iceland's erupting volcano strands thousands of air travelers across Europe and worldwide, a less publicized but arguably more costly catastrophe is mounting 15,000 miles away: piles of gourmet produce and cut flowers, some of Kenya's chief exports, are rotting in limbo. Meant to be shipped to upscale grocery stores throughout Europe, lilies, roses, carnations, carrots, onions, baby sweet corn, and sugar snap peas are going bad in heaps, on the vine, and in the ground because airport warehouses are already full and there's no local market for the expensive produce in a country where half the population lives on less than a dollar a day.
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