“Students interested in economics and finance should closely follow this new Iceland saga, for it is the most dramatic story yet to illustrate how reckless bankers let loose in a free market can destroy entire economies.” – Uwe E. Reinhardt November 3, 2008
Unemployment = 5,5%
Inflation = 18%
Purchasing power = down 7,5%
The calm before the storm of 2009 is here. Retailers suggest that unlike all Christmases in recent memory this one is not going to be paid for by credit, but by cash.
Hopefully the media will be awake for the last 10 days of 2008, as the holidays are prime time to commit political and economic atrocities, when fewer are paying attention.
But the forecast for 2009 suggests that all hell is going to break loose.
Olafur Ragnar Grimsson, President of Iceland has made the worst possible plea a head of state could make. He has asked for his pay to be lowered.
Olafur has been unusually quiet since the economic crash. He has been accused of turning the presidency into a position that businessmen could exploit for their own gain abroad. His legacy will probably be the crass and arrogant speech in London where he described the superiority of the Icelandic businessman with reference to viking legacies to a polite crowd. Olafur hosted a dinner for James Bond last year, in the shape of Unicef Ambassador Roger Moore, where who is who of FL Group and Baugur were invited.
James Bond probably never met a villain as shady as Palmi Haraldsson.
A story circled around my workplace a few years back. Someone who asked his boss for a raise got an example instead. The boss told him that she had been approached by her boss and he had offered her a raise for doing a good job. She said she had refused on the grounds that she was enjoying her job so much and that she knew if she kept on delivering then good things would come to her eventually.
The fact that she was a single woman who could devote all her time to her job, while the employee had a family depending on her should not be taken lightly. I don’t know if this story is true or not but I had a similar experience there later.
A boss that denies a raise is setting an example for all below him. They are unable to move up when the boss doesn’t. Olafur Ragnar was not voted into the presidency to downgrade its position. If his pay is lowered then what hope for those further down the ladder in the service of the Icelandic state. Unlike someone who has not been shy of attracting wealth for himself and is married to a London diamond-queen, those not as fortunate are in a wastly different position that Olafur Ragnar does not seem to understand.
