Iceland on The Huffington Post

Ellen Kanner: Meatless Monday: Money for Nothing? Cheap Food's Hidden Costs

2009-11-16T11:13:30Z

As if Bjork isn't enough, there's another reason to love Iceland -- now it's the land without McDonald's. The franchise shuttered last month not as a way to protest inhumane treatment of animals or employees, out of fear of food-born illness or concern over obesity -- all valid reasons -- but because of something McDonald's values -- money.

Iceland's McDonald's sourced its ingredients from Germany, so the food was never locally produced and unlike in America, never came cheap for the consumer. Flying in food to a remote island comes at a cost even McDonald's understands. With the Iceland's economic collapse a year ago, the situation got worse. At roughly $5.29, an Icelandic Big Mac cost almost double what it does in the States, and rising food costs would have pushed it up to $6.36. Iceland pulled the plug because McDonald's wasn't cost-effective.

The irony is, cost-effectiveness is what McDonald's based itself on from the get-go in 1956. As Eric Schlosser showed us in Fast Food Nation, McDonald's minted industrialized food production as we know it. Instead of local restaurants serving local food, it created a nationwide assembly line system that grows and processes food as cheaply as possible. Sounds kind of cool in a Rube Goldberg way until you realize what that really means.

That Big Mac, even at $6.36, comes with significant hidden costs. Pushing output at the expense of quality means farmers have been using chemical pesticides and fertilizers, causing toxic runoff into our soil and water. Produce is grown for durability, so it can withstand being picked early and shipped across the country without looking the worse for wear. Crop diversity, flavor and nutrition are not priorities. Nor are the people who grow and harvest our food, many of whom are exploited illegal immigrants.

Ninety-nine percent of America's meat comes from factory farms. Conditions are so grim, farmers are forced to feed their animals antibiotics so they can survive the process only to wind up as a McNugget.

Centralized meat processing leads to risks like contamination. The week that saw the Iceland's last Big Mac also saw another ground beef recall -- 546,000 pounds of it. E.coli outbreaks in ground beef in New York and environs have to date resulted in two fatalities and over 500 cases of illness.

There's other hidden costs to the consumer, by way of obesity and obesity-related illness including diabetes, heart disease and cancer. Fast food is processed up the wazoo, doctored up with additives, fat, salt and sugar.

Losing the Icelandic franchise (a total of three restaurants) will not bring McDonald's to its knees, nor is it the same as the falling the Berlin Wall. But it's a victory of sorts and the convergence of events is worth noting. Saying no to fast food means we're toppling a bigger wall -- the one food corporations have erected to keep the toll of industrialized food production from consumers.

A system that engenders pollution, abuse of animals and workers and us isn't so tasty. And it's not so cheap. Buying fast food -- and buying into the fast food system -- encourages us to value nothing -- not what we eat or how we grow it or even ourselves. You want fries with that? Not so much.

Mushrooms with Brown Butter and Barley

France, Italy, Turkey, China, Mexico -- these are the great cuisines of the world, according to culinary types. Iceland, you'll note, did not make the cut. Perhaps because their native specialty is cured ram scrota -- now there's a reason to go meatless. In honor of Iceland saying bye-bye to Big Macs, here's a scrotaless, meatless recipe that pays homage to Iceland's big barley crop and its forests of wild funghi. It's a rich, stylish take on the classic mushroom-barley combo and makes a nice vegetarian addition to Thanksgiving. In Iceland, it would be topped with skyr, a superthick yogurt. Here, a blob of Greek-style yogurt makes a suitable substitute.

Serve with a green salad and nice, crusty whole grain bread for sopping up extra broth.

1 ounce dried mushrooms
5 cups vegetable stock
1 bay leaf
1 cup barley
4 tablespoons unsalted butter
1 large onion
3 cloves garlic
3 ribs celery
1 pound fresh mushrooms of choice -- cremini, shiitake, portobello, or a combination
6 cups chopped greens of choice -- spinach, kale, Swiss chard, or a combination
1 tablespoons fresh thyme leaves
1 tablespoon fresh tarragon leaves
sea salt, freshly ground pepper
1/2 cup plain, unsweetened Greek-style yogurt

Pour vegetable stock into a large pot. Bring to boil over high heat. Add dried mushrooms. Cover pot, but leave on burner but turn off heat and let dried mushrooms infuse the stock for 30 minutes.

Using a slotted spoon, remove mushrooms from broth, return heat to high and allow stock to return to boil. Chop mushrooms.

When stock boils, add barley, bay leaf and reconstituted dried mushrooms. Stir to combine. Cover pot and reduce heat to low for 45 minutes, or until barley is tender, not mushy and broth is mostly absorbed.

Chop garlic, onion and celery. Slice fresh mushrooms.

In a separate pot, heat butter over medium heat. Stirring occasionally, let it cook for about 5 minutes or until it turns golden-brown and smells nutty. Careful not to let it burn.

Add chopped onion, garlic and celery. Stir so vegetables are coated with the melted butter. Then add sliced mushrooms. Stir again to combine. Cover pot and reduce heat to low. Let vegetables cook for about 10 minutes. The vegetables will release their own liquid and combine with the brown butter to create a rich, luscious broth.

Remove lid and mix in green by the handful. Stir gently until greens are wilted, leaves are tender but color is still vibrant. Spinach will take 5 minutes, kale and chard slightly longer. Stir in thyme and tarragon. Season with salt and pepper.

Remove bay leaf from barley. Season barley with salt and pepper.

To serve, top barley with mushroom and brown butter mixture.

Serve with a dollop of plain yogurt, if desired.

Serves 6.

Ann Pettifor: Investors: Beware the Quackery of Economic Goats, Whitewashers and Charlatans

2009-11-11T18:36:59Z

In William Hogarth's famous engraving of 1721, the world of finance, corrupted by the phantom of the South Sea Bubble, is cruelly satirised. To represent market cheerleaders, a goat sits astride a spinning carousel and asks: 'who will ride?" Lured by this charlatan, investors crowd on to the shaky, but thrilling merry-go-round. In another corner a winged devil with a scythe throws chunks of Fortune's body to a greedy crowd. And in the right hand corner - 'trade lies dead'.

Today -- as global trade lies dead, as unemployment rises, as wages and incomes plummet, as US consumption (70% of US GDP) and investment falls -- share prices zoom upwards and commodity prices rock. According to Fortune magazine, the stock market climb of these last few months is the fastest on record. By November, the S&P 500 had surged by 62 percent to 1,093.08 after sinking to a 12-year low in March.

A trade that remains in the shadows -- 'the carry trade' -- roars ahead. (For the uninitiated: it's just another version of 'buying cheap and selling high'. Traders in money borrow e.g. dollars, at the Federal Funds rate of 0.25%- and then lend in countries (and currencies) where rates (or yields) are higher.

Nice work if you can get it -- especially as a banker, with the competition wiped out, the Fed keeping interest rates low, and the risk of gambling with your own capital replaced by taxpayer-backed money.

It's especially nice work if, while playing away, you can short the dollar and so ensure that on returning home to pay your dollar debts, the rate is lower. Fine and dandy of course, until either the dollar or the Fed rate rises. Then all hell will break loose, as traders scramble to repay debts at climbing rates. But until then, the unregulated 'carry trade' carousel will keep spinning round the globe.)

In another corner of the financial forest, and partly financed by the carry trade, the global bubble in equities, commodities and other risky assets is expanding into what Nouriel Roubini calls a 'monster'.

Many economists are helping to pump it up further. Some, like Abby Joseph Cohen at Goldman Sachs gave the bubble a puff by declaring the recession at an end in August. Jim O'Neill, chief economist at Goldman Sachs is a perma-optimist. He told me in an August 2008 BBC radio interview that this recession was 'just another periodic crisis - I have already lived through five', he remarked.

When a British economist Danny Gabay of Fathom Financial Consulting argued that poor GDP numbers could be explained by the fact that "the UK has some formidable headwinds, not least of which is the over-burdened consumer which is having to cope with a broken banking system, rising unemployment, and falling income growth," his view was dismissed as "baloney" by Kevin Daly at Goldman Sachs, who, according to the FT, put greater weight on more optimistic recent surveys of companies.

These happy (and well-compensated) souls are joined by PhD-trained academic economists who cheered the recent 3.5% growth in US GDP, even though wiser heads declared this analysis a whitewash, and noted that 'cash for clunkers accounted for 1.7%, i.e. half of the increase and the lower liquidation of goods in stock accounted for another 1%. In other words, 80% of this "growth" came from a temporary government boost that is already gone or was essentially technical in nature.'

But the cheerleader that investors should most beware of is one Prof. Frederick Mishkin.

In May, 2006, this American economist and one-time Federal Reserve governor, wrote a report called "Financial Stability in Iceland" commissioned by the Icelandic Chamber of Commerce. (See 'Iceland as Icarus' by Prof. Robert Wade.) In this report he and his Icelandic partner opined thus: "Although Iceland's economy does have imbalances that will eventually be reversed, financial fragility is not high and the likelihood of a financial meltdown is very low". We know that Fred Mishkin (now of Columbia University) was not the only academic economist to act as cheerleader for Iceland's reckless bankers. Prof. Richard Portes, President of Britain's Royal Economic Society, played a similar role. (For more about Professor Portes's role in the Icelandic saga, go here.)

Mishkin's report was published in the same month that the IMF mission to Iceland came to very different conclusions. According to Prof. Wade, Mishkin "pocketed $135,000 for his contribution to the modest report." A modest fee, we might add, for puffing up massive capital gains on behalf of reckless Icelandic bankers.

In the autumn of 2008 Iceland's economy 'debtonated' and the country was quickly bankrupted. Bank failures, unemployment, political upheaval and massive destruction of value followed.

The disastrous bursting of the bubble created by Iceland's bankers, has not punctured the Professor's confidence, nor deterred his sponsors at the Financial Times or in the banking sector. On Tuesday, 10th November, 2009, Mishkin was given a column in the FT. The apparent purpose of the piece is to debate the risk of bubbles. Instead he emphatically puffs up the 'monster bubble' in risky assets. He does so by posing a rhetorical question: "if bubbles are a possibility now, does it look like they are of the dangerous, credit boom variety?"

"The answer" writes this academic purveyor of advice and encouragement to the carousel set, "at least in the US and Europe, is clearly no."

To paraphrase Wordsworth: William Hogarth, thou shouldst be living at this hour: Economics hath need of thee: she is a fen of stagnant waters.

Alda Sigmundsdottir: Tired of Waiting, Icelanders Gather to Create a Roadmap for the Future

2009-11-11T16:02:54Z

A unique and highly ambitious social experiment is set to take place here in Iceland on Saturday, November 14.

On that day, around 1,500 Icelanders will gather in a sports arena in Reykjavík to brainstorm and plan a future vision for our country, and subsequently lay the foundation for the implementation of that vision. The event is dubbed Þjóðfundur -- National Assembly in English -- and it is believed to be the very first time that a statistically-significant portion of a single nation gathers in one place to attempt to reach an agreement on collective values and future vision for their country.

Iceland experienced a three-fold crisis last year: a banking crisis, a currency crisis, and a political crisis. The corruption, croneyism, nepotism, cross-ownership and political skullduggery that had gone on both openly and surreptitiously for years were suddenly laid bare for everyone to see. The principles that Icelandic society had rested on for the last three decades vanished overnight and common ideology was leveled to the ground. The country was bankrupt in more ways than one.

Which meant, of course, that finding a new roadmap into the future was -- and is -- crucial. Now, a year after the crisis hit, the first major step towards forming that roadmap is being taken. In the words of Halla Tómasdóttir, CEO of Iceland's Auður Capital and one of many volunteer organizers of the event, "...what has characterized this time [since the meltdown] more than anything else has been what I call The Big Freeze -- everyone is waiting for something to happen. And we can't wait any longer. The only solution is to push up our sleeves and start working on what we want to do."

The event is the result of months of planning by a collective calling itself The Anthill. The name refers to the fact that an anthill has a collective wisdom that eludes the single ant. The Anthill is a collective of active Icelandic grassroots organizations who have now joined forces for this event. Its members come from all sectors of society, including the commercial and political sectors.

Participants are randomly selected from the National Registry and the number is large enough to be a statistically-significant portion of the nation. In other words, those who take part in the national assembly are a statistical representation of the views and opinions of all Icelanders and are, technically speaking, able to speak on behalf of the nation. So far, over 1,000 of the 1,500 invitees to the event have confirmed their participation.

Individual companies and organizations have pitched in to cover costs, and a few days ago it was announced that the Icelandic government will provide a grant of some USD 55,000 to hold the National Assembly.

According to The Anthill, the main goal of the assembly is to mark a new vision for a healthy and progressive reconstruction of Icelandic society. Apart from determining policies and a plan of action for that reconstruction and the subsequent implementation of those plans, the event is designed "to increase optimism and hope among the Icelandic nation, and instill a sense of momentum and achievement." The outcome of the assembly -- the roadmap -- will be open and available for all to use at will.

Strange as it may seem [irony intended], not everyone is enthusiastic about the national assembly. The glass-half-empty people dismiss it as merely another brainstorming session on a grand scale that will probably just result in a lot of talk and no action. Others believe it has the potential to create a watershed in Iceland's growth as a nation. After all, it was the people who changed the course of history last January, so who is to say that they cannot influence the future development of the nation with a positive and constructive desire for real change?

The national assembly will take place on Saturday, November 14, 2009, from 9 am to 6.30 pm GMT. I will be Tweeting live from the event on www.twitter.com/aldakalda

Leslie Grossman: Changing the World by Changing the Gender Gap

2009-11-02T10:51:55Z

Mathematics and statistics used to be boring to me. Then, my husband introduced me to the TV Show Num3rs, which is about how mathematics helps solve crimes. It's an engaging show, based on true stories, about 2 brothers, one a mathematician and the other an FBI agent, who combine their work effectively to successful solutions, even sometimes saving lives. Recently Num3rs has interjected a female mathematician, also the love interest, who gets to show her prowess, solidly disputing former Harvard University President Larry Summers' claim that "women aren't good at math and science."

However, this blog is not about disputing "women are not good at math," because we know that's an old wives tale (or an old Larry Summers' tale). This blog is about the value mathematics and specifically statistics play in changing the world.

Math and statistics were a vital component in announcing the results of the Gender Gap Index 2009, presented by the World Economic Forum, which is busily at work trying to make the world a better place, well beyond its annual event in Davos. I attended a recent meeting at which the report was presented by its authors, Ricardo Hausmann of Harvard, Laura Tyson of University of California, Berkeley, and Saadia Zahidi, head of the Forum's Women Leaders and Gender Parity Programme, and is based on hard data.

Why is a Gender Gap Index important, you ask? According to Klaus Schwab, founder and executive chairman of the World Economic Forum:

Girls and women make up on half of the world's population and without their engagement, empowerment and contribution, we cannot hope to achieve a rapid economic recovery nor effectively tackle global challenges such as climate change, food security and conflict.

This is supported by countless independent studies and reports that show that the gender equality is critical to a country's economic success. In fact, this WE Forum report demonstrates that engaging women equally with men in all aspects of life is imperative for economically competitive and prosperous societies.

As to be expected, there was good news and bad news in the Gender Gap Index. The good news is that the health and education gaps are being closed. The bad news is that overall, the economic and political gaps are not. The good news is that out of 115 countries measured, 99 have made progress in the last 4 years, however, the bad news is that 16 countries have deteriorated. It was good news for the Nordic countries. Iceland holds the top spot, flanked by Finland, Sweden and Norway with Denmark not far behind (#7). New Zealand(#5) and South Africa(#6) and Ireland (#8) are right up there, and surprising to me was the Philippines (#9) considering that most of Asia is quite low on the Index with China #60 and Japan #75 and India #114. Most of Western Europe (with a few exceptions including Italy) is in the top 20. The bad news is that the U.S is a disappointing #31 with Canada ahead of us at #25. In fact, in 2006 the U.S. was #23, so we've lost our position in 3 years. The authors of the report generously tell us that it could be that the U.S. is lower on the list due to the fact that other countries are doing better than us, not necessarily because we are doing worse. However, if you closely examine the report, it shows that while the U.S. has done well investing in education and health for women, we have not made progress in business or in politics. The fact that the U.S. is not closing the gap is surely no surprise to many leaders of organizations trying to increase the number of women at the top in government and business. Yet it is truly frustrating and embarrassing when we see in the report how well other countries are doing. To see the entire Gender Gap Index, go to http://www.weforum.org and choose Women Leaders and Gender Gap.

Understanding the role math and statistics play in changing the world might be a good way to encourage young women to pursue math as a career. We know women are equally capable, however, their collective interest has not been strong. I predict that when we show women how they can change the world with mathematics, such as with the Gender Gap Index, many more will pursue it as their field of choice.

Thousands Line Up For Last Big Mac In Iceland

2009-10-30T21:11:09Z

Thousands of Icelanders lined up at McDonald's restaurants to order their last Big Macs before the U.S. fast-food chain abandons the crisis-hit island at midnight Saturday due to soaring costs.

Jenny Darroch: McDonald's on Ice

2009-10-29T17:57:30Z

I read today that McDonald's has pulled out of Iceland.

The decision to withdraw is a combination of rising costs due to the weak Kronar against the German Mark (all products for McDonad's in Iceland come from Germany) and the inability to hike prices a further 20% to recoup losses. To raise prices would have made the Big Mac in Iceland the most expensive in the world.

For McDonald's, exiting Iceland is not the first time that the corporation has exited a country. Recent examples include Barbados in 1996 and Bolivia in 2002 (among others).

What is interesting to me is that we always expect big brands such as McDonald's to sustain anything that is put in its path both locally and internationally. In this case, the weak Icelandic economy was just too much. The same almost happened to Starbucks when it launched in Vienna, Austria (the coffee capital of the world). In this case, the problem was taking a standardized product and rolling it out internationally without knowing what local reaction would be.

Necessity is the mother of invention and the owner of the McDonald's Franchise in Iceland is going to reopen as Metro - this time, using local produce. What is likely is that by combining the McDonald's system with local tastes could result in some quite interesting innovations. I'm not sure how Starbucks influenced coffee consumption in Vienna or Vienna influenced coffee consumption in Starbucks but Starbucks is still in Vienna and, yet again, I am sure Starbucks had to make some adjustments in order to succeed.

Jenny Darroch is on the faculty at the Drucker School of Management. She is an expert on marketing strategies that generate growth. See www.MarketingThroughTurbulentTimes.com

Another House Democrat Backs Away From Loophole In Investor Protection Bill

2009-10-28T20:00:45Z

A leading House Democrat backed away Wednesday from a sweeping proposal that would have watered down a post-Enron reform, permanently exempting small publicly-traded companies from a requirement that they obtain outside audits of their internal controls.

Rep. Carolyn Maloney, of New York, originally proposed that firms with market capitalization less than $75 million be exempt from a provision of the Sarbanes-Oxley Act, the 2002 law designed to increase investor confidence that was enacted after accounting scandals at Enron and WorldCom rocked investors. The loophole would have applied to about 55 percent of publicly-traded firms.

Maloney's amendment, co-sponsored with Rep. Scott Garrett, a New Jersey Republican, was to be attached to the Investor Protection Act of 2009, a pending bill in the House Financial Services Committee. It was first reported by the Huffington Post.

But after investor groups protested her amendment -- and after the bill's sponsor, Rep. Paul Kanjorski, (D-Penn.), reached out to Maloney -- the New York Congresswoman offered a new one, calling instead for a study of the costs of complying with the already-existing provision, and delaying its planned implementation by a year. Small firms are expected to comply with the provision by next June; Maloney's new amendment would delay that until 2011.

A spokeswoman for Kanjorski said the Congressman thought Maloney's original amendment was "too big. The revised version is more focused."

Investor groups and consumer advocates opposed Maloney's original amendment, arguing that it weakened investor protection and would have made financial fraud harder to detect.

"The need for strong internal controls is particularly important for the generally riskier smaller public companies that would be the beneficiaries of any exemption," wrote Jeff Mahoney, general counsel for the Council of Institutional Investors, a nonprofit association of public, union and corporate pension funds, in a letter to members of the committee.

Though these firms are required to obtain outside audits of their internal controls, the Securities and Exchange Commission has granted them annual deferrals from complying with the law for the last seven years. The latest deferral was granted earlier this month, though the SEC said that this was the last one.

In an interview Wednesday, Maloney said she offered the new amendment because she got new information on smaller firms' costs of complying with the provision.

"I did not know that the SEC has just come out with a huge report -- it's like 50 pages long, I haven't had a chance to read it -- but they are claiming that they have come out with ways that will reduce the burden by 30 percent -- the cost on small businesses," the nine-term Congresswoman said. "I don't know if that's true or not -- I haven't had a chance to read it. I'm going to ask for a public hearing on it...to see if in fact that is true."

Regarding pressure from other lawmakers to dial back her original amendment, Maloney said, "I didn't talk to them until after I had decided what I was going to do."

The committee passed Maloney's new amendment in a voice vote.

*There was a preliminary voice vote on Maloney's new amendment, but a final roll call vote is pending. The vote is scheduled for Wednesday. Apologies for the error. This post was updated Saturday.

McDonald's Pulls Out Of Iceland

2009-10-27T17:07:37Z

I learned from Matthew Yglesias that McDonalds is pulling out of Iceland, victims of that nation's currency collapse. The BBC has more:

McDonald's is to close its business in Iceland because the country's financial crisis has made it too expensive to operate its franchise.

The fast food giant said its three outlets in the country would shut - and that it had no plans to return.

Besides the economy, McDonald's blamed the "unique operational complexity" of doing business in an isolated nation with a population of just 300,000.

It should be pointed out, however, that while Iceland will have to do without packaged, low-grade meat products infused with artificial aromas to make them stomachable to the human palate, it does not necessarily mean Iceland is doomed. While Thomas Friedman observed, in The Lexus And The Olive Tree, that "no two countries that both had McDonald's had fought a war against each other since each got its McDonald's," his Golden Arches Theory of Conflict Prevention was disproven when Russia rolled into South Ossetia last year. [Or rather, disproven again, as there was a McDonalds in Serbia at the time of NATO's bombing in 1999.] So, Iceland needn't necessarily fear that they will soon find themselves in the midst of armed conflict. Besides, I think that there are faeries that protect them, or something. Anyway, good luck, Iceland!

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Iceland Loses Its Last Few McDonald's Locations

2009-10-26T14:13:32Z

REYKJAVIK, Iceland — The Big Mac, long a symbol of globalization, has become the latest victim of this tiny island nation's overexposure to the world financial crisis.

Iceland's three McDonald's restaurants – all in the capital Reykjavik – will close next weekend, as the franchise owner gives in to falling profits caused by the collapse in the Icelandic krona.

Alda Sigmundsdottir: When Taking the Bus Is for Losers

2009-10-14T10:22:31Z

Time: 11 pm. Place: My house in Reykjavik, Iceland. Who: Daughter (18) and Myself.

Daughter: Do you need the car tomorrow?

Me: Yes. Why?

D: I don't know if I can get a ride home after school.*

M: Why don't you take the bus?

D: I don't take the bus.

I don't take the bus. Like: I don't DO the bus.

Reykjavík's public transport system has a serious problem. Not just because my daughter refuses to use it, but because her attitude is a reflection of how most people view using public transport in Iceland's capital Reykjavík: It's for losers.

This attitude towards public transport is unusual for a European country. Most nations throughout the continent have extremely efficient ways of transporting people from one place to another, and most people are happy to use them.

Frankly, I don't know what came first - the image problem or the fact that the Reykjavík's (privately-run) public transport system is like something out of the dark ages. Reykjavík's buses are large, cumbersome contraptions that usually drive around virtually empty, spewing smog. And scheduling is a problem: most buses run only every 15 minutes during peak times and every 30 minutes during off-peak times.

Moreover Reykjavík is very spread out (whoever was put in charge of urban planning clearly did not have sustainability or energy conservation at the top of the list) so getting from one place to another by bus is pretty convoluted. A quick online search reveals that getting to from my house to the Smáralind shopping mall (also known as penis mall, for obvious reasons) by bus takes 50 minutes there, and roughly one hour back. The same trip takes me around 15 minutes each way by car.

Also, taking the bus in Iceland is expensive - a single fare for an adult within the capital area is ISK 280 (USD 1.5) - which probably does not sound like much for most US citizens, but keep in mind that the economic crisis has rendered the dollar to krona exchange rate extremely favourable. Most Icelanders consider this a hefty fare, particularly since you can drive pretty much anywhere within the capital area in about 20 minutes.

Amazingly, the bus company offers no discount for students. My daughter, since she is over 18, pays the same as any adult, even though her disposable income is pretty restricted. For a couple of years - in 2007 and 2008 - the city of Reykjavík and the bus company experimented with giving all students free bus passes for the duration of the school year. This resulted in buses that were full to capacity every morning and much higher utilization throughout the day. Alas, that initiative went down the toilet this year, along with the rest of the economy.

And so, Icelanders don't take the bus much. Personally I don't remember the last time I was on a bus in Reykjavík - it was that long ago. A private vehicle in Iceland is practically considered as essential as a refrigerator. Iceland has one of the highest car ownership ratios in the world - at the end of 2008 there were 209,740 private passenger vehicles registered in Iceland, while at the same time the population was 319,268, according to Statistics Iceland. In my household, we have two cars for three people and, well, sometimes that doesn't seem quite enough.

The sad thing in all this is that, with its abundance of hydroelectric power, Iceland could easily run a transportation system that is both efficient and green. Trams on Reykjavík's streets would make such eminent sense, and trains connecting major centres would be an excellent solution. But in a country with such a tiny population, investment in that sort of infrastructure is just not viable, at least not in the current economic climate. Until then, I guess we'll be clogging up those streets in our cars and painting that thin line of smog on the skyline on calm winter days.

* On the mornings when she doesn't take my car she gets a ride with her stepfather or a friend.

Iris Erlingsdottir: "Happy" Anniversary, Iceland

2009-09-29T03:46:11Z

This week marks the one year anniversary of the beginning of the end of Iceland's economic prosperity.

After World War II, Iceland may have been the poorest country in Western Europe. Centuries of abuse -- physical and economic -- by our colonial overlords (Norway, then Denmark) had weakened our financial institutions and stunted our economic potential. After receiving our full independence in 1944, we gradually clawed our way up the food chain, going from a remote backwater to the world's richest nation on a per capita basis in just six decades.

Unfortunately, our new house was built on foundations of sand, and when the economic fallout from the Lehman Brothers collapse began to hit the markets, Iceland's lack of solid grounding became evident. On September 29, 2008, the Icelandic government announced that it would nationalize Glitnir -- one of the three large banks upon which Iceland built its prosperity -- thus starting a chain of events that would lead to the collapse of all three banks, the Icelandic stock market, and the Icelandic króna within two weeks, and of the ruling center-right government within six months.

The International Monetary Fund (IMF) was called in, and has proceeded to impose austerity measures and to apply pressure on the Icelandic government to guarantee the banks' losses abroad. The new center-left government bungled the initial negotiations with the United Kingdom and the Netherlands regarding its responsibility for the banks' losses, but has now submitted a more realistic plan for repayment. Nevertheless, it has had to cut essential services, such as health care, and has not provided a clear plan for returning the country to solid footing.

"The Goddess of Justice" Halldór Baldursson, mbl.is

Investigations of widely-rumored fraud have not yet yielded any arrests, but an important legislative fact-finding investigation is due out in November. Páll Hreinsson, the Supreme Court judge chairing this investigation, has warned that "No committee has ever had to bring to its nation such bad news." It is also expected that the special prosecutor appointed to investigate possible fraud in the banking industry will start issuing indictments soon.

Nevertheless, Icelanders do not appear to have learned any lessons from this debacle. There is a great reluctance on the part of most Icelanders to accept any responsibility for our current situation. Those who participated in the madness truly believed that they had found the secret for printing money and blame our depression on the global economic downturn, and are waiting for the market to bottom so that they can buy up resources for a song and start over again, more powerful than ever.

Those who did not participate in the bubble truly believe that they should be exempted from any hardship. They are like the radical Jewish sect in Monty Python's Life of Brian sitting around asking what the Romans had ever done for them -- other than aqueducts, sanitation, roads, irrigation, education, wine, security, etc., etc., etc. They may have voted for the minority parties, worked outside of the banks, and resisted the urge to go on shopping sprees abroad, but they accepted the legitimacy of the status quo by failing to take affirmative steps to change it fundamentally.

This failure to learn is exemplified in three recent developments -- the new government's decision not to revise the current fishing quota system, the imminent loss of public control over Iceland's geothermal energy resources, and the reemergence of Davíð Oddsson as a player in the public debate over Iceland's future.

The event that many see as starting the economic corruption that permeated the business environment in the 2000s was the 1990 decision to grant fishing quotas to selected fishing vessel owners at no cost, even though the Icelandic constitution declared the fisheries to be a public resource. This decision made the lucky owners fabulously wealthy, and they showed their gratitude by sharing their wealth with Iceland's political parties, though of course not with the Icelandic people themselves.

When its status as the perpetual minority party seemed secure, the Left-Green Party declared that one of its principle aims was to restore the quotas to the Icelandic people and to auction off the fishing rights to ensure that the people to whom the fish belonged would receive a fair economic benefit.

However, now that the Left-Green Party has entered into a ruling coalition with the Social Democrats, that election promise has dissolved in the purple power koolaid that produces 180° position reversals, cowardice, and episodes of integrity breakdown, all on nauseating display on Icelandic state television last week as Fisheries Minister Jón Bjarnason told an interviewer that it wasn't up to him (the Minister, the boss), but a bureaucratic committee, to fulfill what he and his party had promised voters. Of course he had no way of knowing what the committee would end up deciding, the matter was completely out of his hands!

Iceland can only be said to have two natural resources of any importance -- fish and energy. The method by which Iceland distributed fishing quotas remains deeply flawed, but it is the politicization of energy that presents the greatest danger to Iceland's future. Whatever its flaws, at least the fishing quota system has ensured that Iceland's fisheries have been relatively well managed. The exploitation of energy in Iceland, however, it anything but well managed.

The recent flurry of activity surrounding the sale of HS Orka, the largest privately owned energy company in Iceland, shows that the old way of doing business has not changed much, if at all. A Canadian company, Magma Energy Corp., announced in July that it had signed an agreement to acquire a minority interest in HS Orka from Geysir Green Energy (GGE), a private geothermal development company with a majority stake in HS Orka.

GGE acquired its shares in HS Orka when the Independence Party-led Icelandic government decided to privatize the company in 2007. Not surprisingly, GGE -- which was headed by the same investors who already owned most of what was worth owning -- had greased the skids for this deal by "donating" ISK 30 million to the Independence Party a couple months earlier.

To no one's surprise, GGE is now in deep debt as a result of failed geothermal projects in Germany and elsewhere, and has been held on life support by the Icelandic banks, which are themselves essentially insolvent. A bank desperate for cash selling off a bankrupt debtor's assets to recoup a portion of the outstanding debt is, of course, nothing unusual.

However, to gain effective control over HS Orka, Magma has also struck a deal with Reykjavik Energy (RE) and two other municipal shareholders under which it gained an additional 32.32% share of HS Orka, while putting down only about 30% of the purchase price, with the remainder secured by a bond repayable in a single installment in seven years with interest at 1.52% per annum. The bond is secured by the shares acquired by Magma in this transaction. The deal will give Magma exclusive rights to exploit one of Iceland's most productive geothermal fields for the next 130 years.

This is precisely the type of deal that characterized Iceland's banks before the collapse, and it's sad to see that the municipal politicians have learned absolutely nothing from the failure of the neoconservative ideology. What's even more heartbreaking is the realization that this sale is also exactly the type of deal described by John Perkins, in his haunting book, Confessions of an Economic Hit Man, for stripping countries of control over their natural resources and placing them in the service of a few very large foreign corporations.

Iceland decided long ago to "diversify" its economy by enticing Alcoa and other aluminum manufacturers to set up shop in Iceland to take advantage of dirt cheap energy prices. The resultant hydroelectric projects have destroyed pristine wilderness, with little or no profit to Iceland's people, as has been documented by Andri Snaer Magnusson.

The HS Orka sale is an attempt by the aluminum interests to ensure that the government does not interfere with their plans for continued expansion, despite a lack of public support, and that it does not renegotiate the current contracts to charge a fair rate for the exploitation of Iceland's geothermal and hydroelectric resources.

The individual seen by most Icelanders as the architect of the bubble economy is Davíð Oddsson, the former long-time Prime Minister, leader of the Independence Party, disciple of Milton Friedman, and chairman of Iceland's Central Bank at this time last year. As Prime Minister, he led the charge for the privatization of public resources, including the banks and the energy companies. As Central Bank chair, he is credited with the United Kingdom's decision to invoke its terrorism laws to freeze the assets of Icelandic banks in the UK, after he stated during a radio interview the day before that "we do not intend to pay the debts of the banks that have been a little heedless."

"The Davíð's Scream" by Gunnar/Fréttablaðið

After the Independent Party-led government fell last winter, he was forced out of the Central Bank, and had, it appeared, decided to slink into a hole, one hoped, to mull over his multitude of mistakes and to seek atonement for the great suffering he had caused.

But like the proverbial bad penny, Davíð turned up last week as the new editor-in-chief of Morgunblaðið, Iceland's premier newspaper, whose ISK 3 billon debts were nationalized before a member of the fishing quota royalty then took ownership of the paper. Iceland's newspapers have never exactly been independent beacons of free thinking, but Morgunblaðið under the pre-Davíð editor (Ólafur Stephensen) had been praised by many people (of diverse political opinions) for fine reporting. Now, the Morgunblaðið staff has been purged of dozens of long-time staffers, and it is generally anticipated that an alternate Faux News-type universe will be fabricated to justify past misdeeds and to pave the road for a return to power by the power brokers behind Iceland's collapse.

Does this imply that Iceland is doomed to an economic and societal purgatory for the foreseeable future? I hope not, but I'm not optimistic. There are some indications that the worst criminals will be punished, and that some stolen assets will be recovered. The reality, though, is that most of the money lost in the past year is gone forever (or, more precisely, never really existed), and that most of the participants in the orgy will escape with a slap on the wrist, at most.

What we must avoid, however, is repeating the mistakes of the recent past. We can no longer accept a society in which a few selfish individuals control the fate of the entire nation, the obeisant public acquiesces without comment to gratuitous transfers of public resources to private interests, and the concept of personal responsibility is seen as a quaint concept applicable only to others.

This has been a very rough year for Iceland, and it's not likely to get better anytime soon. The public's anger continues to grow, and it would not be surprising if this winter sees a repeat of last winter's uprising. One would hope that we retained a few lessons from this painful debacle, but unfortunately and inexplicably, Icelanders seem hell-bent on self-destruction - again.

According to recent polls, a third of voters support the Independence Party, the architects and enforcers of the corrupt policies that devastated the country. Icelanders' story continues to be that of Bjartur of Summerhouse, the protagonist of Nobel prize author Halldór Laxness' Independent People, "the story of a man who sowed his enemy's field all his life, day and night."

Arrests, Catfights, And Water Bottle Runways: Iceland Fashion Week Basically A Big, Fat Mess

2009-09-15T13:21:28Z

In July, about twenty design students and recent fashion-school graduates from all over the world received e-mails inviting them to show at "Iceland Fashion Week." They thought it was a thrilling opportunity (plus, there was the allure of Iceland's natural wonders). Many that we spoke to worked around the clock preparing for the September 6 show, and others maxed out their credit cards to purchase flights from as far away as South Korea, Poland, Brazil, and Spain. But shortly after they arrived on September 2, they realized that Iceland Fashion Week was far from glamorous.

Nathan Lewis: The IMF Destroys Iceland and Latvia

2009-09-03T12:41:58Z

The International Monetary Fund operates primarily as a banker bailout machine. They cajole and tempt and confuse and threaten the leaders of governments worldwide to pay off the failed bets of the big bankers using the taxpayer funds of their countries. This has been going on a long time, at least since the early 1980s.

Thus, I am not in the teeniest bit surprised that the same thing is happening today in Iceland and Latvia.

This article by Michael Hudson has some of the details:

For the past decade Iceland has been a kind of controlled experiment, an extreme test case of neoliberal free-market ideology. ... Is there a limit, a point at which government will draw a line against taking on public responsibility for private debts beyond any reasonable capacity to pay without drastically slashing public spending on education, health care and other basic services? ...

The European Union and International Monetary Fund have told them to replace private debts with public obligations, and to pay by raising taxes, slashing public spending and obliging citizens to deplete their savings. Resentment is growing not only toward those who ran up these debts -- Iceland's bankrupt Kaupthing and Landsbanki with its Icesave accounts, and heavily debt-leveraged property owners and privatizers in the Baltics and Central Europe -- but also toward the neoliberal foreign advisors and creditors who pressured these governments to sell off the banks and public infrastructure to insiders.

This is the trick: replacing private debts with public obligations. Lots of people loaned money to banks and corporations in Iceland. They are now facing huge losses.

What is supposed to happen here is: they take their losses. There was no government guarantee. Why should someone with no relation to this business deal have to pay off their losses just because they happen to live in Iceland?

The government of Iceland may not actually have the money to pay this off. They would have to borrow it. When the IMF makes a "rescue loan" to a government, the money spends no time in Iceland or Latvia. It goes directly to the foreign creditors, in places like New York and London.

However, the debts remain, to be paid off by the taxpayers of Iceland. Taxes rise, which just makes a bad economic situation worse. Valuable and important services are cut -- precisely when they are most needed. Then, the IMF "advisors" come in and start to make a lot of demands.

For example, they may demand that the government sell off "public infrastructure" and the assets of failed banks (which still have considerable value) to pay off the loans which were used to bail out the bankers in New York and London. Who buys this "public infrastructure"?

Typically, it's the bankers in New York and London! Normally, at very good prices -- very, very good prices. Extraordinarily good prices.

Prices for assets in a crisis are normally very low. But, a government that can be coerced into bailing out the bankers can also usually be coerced into selling off state assets at values that no private owner would accept.

Hudson calls this "neoliberal free-market ideology." Of course, it has nothing to do with the principles of capitalism. You could call it a form of fascist imperialism. I think John Perkins, author of Confessions of an Economic Hit Man and The History of the American Empire, would agree with this terminology.

It is hard to tempt and cajole and confuse world leaders when you use unpleasant terms like "fascist imperialism." That's why these proposals are camouflaged with labels like "neoliberal free-market principles," when they have nothing to do with free-market principles.

It's not about "conservative" and "liberal." It's about us against the banker imperialists.

The IMF should be abolished.

Alda Sigmundsdottir: Eva Joly on Iceland's Devastating Plight

2009-08-11T11:50:00Z

Last week, Eva Joly, the Norwegian-French magistrate renowned for her fight against corruption, wrote an article slamming British PM Gordon Brown, the International Monetary Fund and the European Union for their harsh treatment of Iceland in the wake of its economic collapse.

Eva Joly gained global recognition when she led the investigation into one of the world's most notorious corruption scandals in the late 1990s, involving the Elf Aquitane oil company in France. She was hired as an adviser to the Icelandic government in spring 2009 to help with the investigation into Iceland's bank collapse, which she has said is "five times more important" than the investigation into the Elf affair. In June of this year, Eva Joly was elected to the European Parliament.

In the article, published simultaneously in several European newspapers, Mme Joly denounces what she calls the "blackmailing of Iceland" by a number of states, as well as the IMF and the EU, into taking on billions of Euros in debt, "which has absolutely nothing to do with the vast majority of its population and which Iceland cannot afford to pay." The debts are from deposits collected by Icelandic banks in the United Kingdom and Holland -- banks that were privately run. An agreement expected to be voted on by the Icelandic parliament this week will require the Icelandic people to cover the debts of Icesave, an online bank that previously operated in the UK and Netherlands.

Iceland is a nation of some 320,000 people. Transposed onto the population number of the United States or Britain, the debt would amount to $5.6 trillion for the US, or £700 billion for the UK.

Mme Joly writes:

Unless a radical new approach is adopted, Europe and the IMF are about to perform a major feat: reducing a country whose HDI had, in just a few decades, reached the highest level in the world, to the rank of a poor country.

In her article, Mme Joly slams British PM Gordon Brown for his ruthless response to Iceland's predicament last fall, in which Icelandic assets were frozen under the UK's anti-terrorist legislation, and his efforts to ensure that Iceland gets no international aid until it submits to the UK's terms:

Indeed, at the very start of October, the UK began with a measure of extreme retaliation: freezing of the assets of not only Landsbanki but also Kaupthing Bank, which was totally unconnected to Icesave, using its anti-terrorism legislation. In doing so, the UK lumped the Icelandic people, their allies in NATO, together with organizations such as al-Qaeda....And since then, it seems to be using all of its influence to ensure that no international aid is really given to Iceland until its demands have been met. Indeed, Gordon Brown told his parliament that he is working "with the IMF" to establish how much it considered the UK was entitled to claim from Iceland.

She also accuses the IMF and EU of collaborating in the blackmailing of Iceland; the IMF by placing impossible conditions for its further awarding of loans:

The IMF...attached conditions to them that would seem outrageous, even in fiction. One example of this is the objective of bringing Iceland's public deficit down to zero by 2013, a target that is impossible to achieve but that will nevertheless lead to huge cuts in the most essential areas of spending such as education, public health, social security, etc.

...and the European Commission for siding with the UK:

The European Commission has clearly sided with the UK, as its President announced in November that there would be no European aid until the Icesave case had been resolved. It is true that Mr [Jose Manuel] Barroso [President of the European Commission] -- too busy with his own campaign and terrified of upsetting his main source of support, London -- is, as is often the case, in over his head.

Mme Joly also touches on one of the most serious side-effects of Iceland's economic collapse -- that of mass emigration and "brain drain". In her view, forcing Iceland to take on the debts is futile and may have serious consequences:

The consequence of this is that the Icelandic people, the majority of whom are highly qualified and multilingual and have strong work relationships with the Nordic countries where they can assimilate easily, are already starting to emigrate. In the end, neither the IMF, nor England or the Netherlands will be able to be reimbursed. Just a few tens of thousands of retired fishermen will be left in Iceland, along with its natural resources and a key geostrategic position at the mercy of the highest bidder -- Russia, for example, might well find it attractive.

The Russian angle is one that has gone from a hush to a whisper since Iceland's economic collapse, beginning with rumors of a Russian loan to Iceland, and ending with the confirmation of that loan last month. A news announcement cited the geo-strategic interest Russia now takes in Iceland, potentially in a military sense (the US withdrew its military presence from Iceland in 2005), but most probably in an economic sense, as Iceland's geographical position provides excellent access to the emerging natural resources of the Arctic.

Eva Joly does not discount the responsibility that Iceland's institutions and regulators hold in bringing about the country's economic catastrophe. However, she does have compassion for the Icelandic people, who are left holding the colossal debts of a handful of immoral and quite possibly criminal bankers. With her article, she says, she wishes to call attention to their plight -- a plight to which much of the world has turned a blind eye:

Moved by the fate of Iceland's deserving and likeable people, and the complete absence of discussion in the European media about what the future holds for them, I simply want to draw the attention of public opinion to the issues at stake in this case -- major challenges that are not confined to the shores of this island. The irresponsible attitude of certain countries, the EU and the IMF to the collapse of the Icelandic economy demonstrates their inability to learn from the dramatic undermining of the model that it embodied: one of excessive deregulation of markets, particularly financial markets, that the majority of those same key players contributed to shaping.

Finally, Mme Joly offers up numerous solutions and points out the potential lessons the international community can learn from Iceland's predicament:

Yet the tools and levers for real progress are there; a catastrophe like that in Iceland could finally raise a meaningful international response, instead of the irresponsible and cynical pressures that we can still see today.

Eva Joly's article was published in several European newspapers, including Le Monde, Aftenposten and the Telegraph, in full or part. It can be viewed in its entire unedited version here.

Iris Erlingsdottir: Iceland's Independent People: It's Time to Clean House

2009-08-03T15:53:48Z

Any doubts as to whether Iceland's elite has declared war on its people were dispelled this weekend.

First, on Friday Björgólfur Guðmundsson filed for bankruptcy. Guðmundsson made several hundred million dollars in St. Petersburg in an astonishingly short time after being convicted of fraud in Iceland. He returned to Iceland with his son to amass billion dollar fortunes after some insider deals, creative bookkeeping, and the alleged assistance of the Russian mafia. Guðmundsson was a major owner of Landsbanki and a major debtor to Kaupthing Bank, two of Iceland's failed banks. Strangely, his son's fortune does not appear to have been affected by the economic downturn; the suspicion is that all of the family's debts were transferred to the father, and all of the assets to the son.

Next, on Saturday Eva Joly, the French-Norwegian magistrate appointed earlier this year to investigate fraud in connection with Iceland's "economic miracle," published an essay in several major European newspapers harshly criticizing the European governments--Great Britain and the Netherlands in particular--for insisting that the Icelandic people pay in full for the fraud perpetrated by the country's financial, business, and political elite. She noted that the unfairly proposed IceSave agreement, under which the British and Dutch depositors in Landsbanki's internet savings accounts would receive full compensation from the Icelandic government, would lead to an outflow of talent from Iceland, creating a downward spiral that makes it even more unlikely that the nation will ever recover.

Then, secret documents detailing massive loans to Kaupthing Bank's biggest shareholders were leaked to WikiLeaks. Although it was widely understood that the powers-that-be received large loans, the size of the loans was astounding. Plus, there is something visceral in pairing up the names and the loans. It is for the sake of these unscrupulous characters that the next generation faces massive deprivation?!?

Icelandic cartoonist Halldór Baldursson's take on Van Gogh's The Potato Eaters:
The Fish Eaters: "Hopefully we'll be able to afford potatoes with the fish when we're done paying for IceSave."

The attorneys for New Kaupthing Bank (now owned by the Icelandic government) first threatened WikiLeaks with legal action, then successfully obtained from the Reykjavík Magistrate, who is a relative and good friend of Kaupthing insiders, an injunction barring the Icelandic National Broadcasting Service News from revealing the details of these widely-available documents. Astonishingly, the INBS News complied with this obviously illegal and ineffective order.

These developments are, of course, just the latest in a long series of events in which a small group of individuals have treated the Icelandic people as fools and suckers. The financiers and businessmen bought the media, the politicians, and everything else of real value. The professional political class presented the voters with no real choices. Laws were enacted, agreements were reached, all to the ultimate benefit of a few.

Enough tidbits were doled out to the masses to keep them in line, but no real power ever left the hands of the leading criminals/leaders. Our recent colonial past (Iceland was a colony of Denmark until 1944) has perhaps left us more passive as a people than any other European nation. We have no tradition whatsoever of rebellion or revolution.

Iceland's greatest modern author, Halldór Laxness astutely described our collective national soul in 1933 in his novel The Seven Magicians:

"Few nations are believed to have tolerated oppression and brutality with more affability than Icelanders. For ages, up to this day, they existed in tolerant passivity with their oppression, without ever making an attempt to revolt. To no other nation was the revolutionary concept so foreign. Icelanders were always willing and content to kiss the rod that roughest beat and believe that the most brutal executioner was their sincerest support and safest refuge."

The so-called "Pot and Pan" revolution this January was the only instance in modern history of Icelanders standing up to their rulers. Unfortunately, although the ruling coalition resigned and new elections were held, no fundamental changes have been instituted. Essentially, the same individuals and political parties that for decades have ruled the country have remained in power, the same businessmen run the bankrupt companies, the same financial wizards run the nationalized banks, all guided by the twin philosophies of cronyism and nepotism.

Thomas Jefferson wrote in the American Declaration of Independence that "when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce [the People] under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."

The government has lost its legitimacy due to its inability to protect the Icelandic people from long-term penury and its unwillingness to swiftly bring the criminals responsible for this travesty to justice. Only by completely purging the system can we restart. The stolen assets must be returned now, the responsible parties must be held personally responsible now. If the government isn't willing to deliver that justice, it's time to instate a government that is.

I cannot conceive of why the countries defrauded by Icelandic businessmen would help us, as long as these traitors remain at large. Until we clean our own house, our complaints about the unfairness of being held liable for the transgressions of a few will fall on deaf ears. Until we stand up for ourselves as a people, we are in no position to beg forgiveness and assistance.

For the first time in our history, we must stand up against our oppressors and reclaim our independence.

Bjorgolfur Gudmundsson: 2nd Richest Man In Icelandic History Is Bankrupt

2009-07-31T15:15:10Z

REYKJAVIK, Iceland — The second richest man in Icelandic history has filed for bankruptcy, his spokesman said Friday.

Bjorgolfur Gudmundsson, the brewer-turned-billionaire and former owner of the West Ham soccer club, applied for bankruptcy protection at Reykjavik district court, 96 billion Icelandic kronur ($759 million) in debt, Asgeir Fridgeirsson said.

Ben Wyskida: What I Learned on Summer Vacation (About Geothermal Power)

2009-07-28T11:13:07Z

I was in Iceland last week, and in addition to (a) spending a weekend in the most unbelievably beautiful place in the world and (b) eating some delicious marinated whale steaks, I came across the best thing ever -- this house under construction in downtown Reyjkavik with awesome geothermal coils for heating:

Aren't they pretty!? Iceland, you may or may not know, sits atop a series of volcanoes, craters and glaciers, which makes it home to some of the most abundant geothermal heat in the world. Combined with its investments in water-generated hydro-power and hydrogen fuel, Iceland is close to being the world's first and only completely energy-independent nation, and the country has almost no carbon footprint at all. (*)

How fabulous, though, to get a peek inside a partial house and see it laid out like that -- it just made me so happy to think of a nice Icelandic family preparing whale for me guests in their warm kitchen in the heat of winter, or their tall, lithe, blond 19-year old son showering himself slowly in the naturally-heated geothermal shower ... I was just thrilled.

I was curious about the coils. I wondered four things: (1) How does it work, (2) Could we do it here? (3) What's so good about it? and (4) Are there strange or related advances in how geothermal is being used? I looked it all up -- now you get to know too. Are you ready?

As for what geothermal heat really is, and how it works, the Union of Concerned Scientists has a great summary. Here are the basics:

Heat from the earth can be used as an energy source in many ways, from large and complex power stations to small and relatively simple pumping systems. The most common current way of capturing the energy from geothermal sources is to tap into naturally occurring "hydrothermal convection" systems where cooler water seeps into Earth's crust, is heated up, and then rises to the surface. When heated water is forced to the surface, it is a relatively simple matter to capture that steam and use it to drive electric generators.

An approach to capturing the heat in the Earth's drier areas is known as "hot dry rock." The rocks are first broken up by pumping high-pressure water through them. Water is then pumped from the surface down through the broken hot rocks. After the water heats up, it is brought back to the surface through a second well and used to drive turbines for electricity or to provide heat.

Great. So there's heat in the ground, you pump it out, you shoot it into the pipes, and then my fictional sinewy blond Icelandic friend gets to take his shower. If you prefer visuals (of geothermal heat, not the sinewy Icelandic friend) here's a handy industry-produced educational video:

!

Neat. And protected from vandalism. That was my favorite part. The tragedy for Iceland, of course, is that while their economy has completely collapsed, and they have access to abundant, renewable, cheap and sustainable energy, the energy can't be exported, traded or sold. It's stuck there. While the rest of the world fights wars over energy and struggles to "green" their power supply, Icelanders are the among the only countries who can lounge in their own geothermal largesse (really! do it here, or here in the country's North.) But until someone figures out how to put geothermal electricity in a box or a tube, they can't make any money off of it on a global scale.

So, can we use it here?

We already do! California, Idaho and other parts of the West are on the Pacific Rim, a naturally-verdant home for geothermal energy. It provides 5 percent of California's electricity, and it's been generating heat in places like Idaho, Reno and Salt Lake City for years. Above is a handy map.

Geothermal power is something that could be used more frequently here in America. It has been used sparingly because the startup costs are high, but also - like wind, solar and biofuels -- lobbying and political intransigence have made it difficult to put geothermal in place. Also there's a little catch -- sometimes near the plants it can smell like rotten eggs.

So why is it so great? Well,

A study by the U.S. Environmental Protection Agency found geothermal heated homes are 72 percent more efficient than electric heating and air conditioning systems.The U.S. Department of Energy found that heat pumps can save a typical home hundreds of dollars in energy costs each year, with the system paying for itself in 2 to 10 years. It is one of the few renewable energy technologies that--like fossil fuels--can supply continuous, base load power.

Great! So half the country should be using it to help power our homes and communities. But Ben, are there completely ostentatious, largely preposterous ways people are using geothermal power to strange extremes, like how Americans like to do? YES. This is my favorite thing ever:

Underground Dog House

A Geo-Thermal Home For Man's Best Friend

This dog house uses geothermal heating and cooling to keep your dog warm in the winter and cool in the summer. It is installed partially underground. The idea is that it will appeal to your dog's natural instinct to build secure dens while it takes advantages of the earth's natural insulation. According to the manufacturer, it will keep the dog house at comfortable temperature's regardless of the weather. It's made from 20% recyclable materials and has a lifetime warranty. "The patent pending design of this unique " 21st Century Eco-Friendly " underground dog house takes advantage of the Earth's own natural temperature control system. The indestructable shell is partially buried to create not only a natural den habitat preferred by dogs, but is also then cooled in the Summer and heated in the Winter naturally."

More? We'll post some photos at the end. Unfortunately I don't have time today to get to my other discovery - this phyto purification bathroom, which recycles and regenerates wastewater while you bathe amidst reeds, branches and lush greenery. It's pretty amazing - we'll come back to it. (Thanks to Nico for the find!)

Anyway, what did we learn?

Whale is delicious.

Geothermal power is making Iceland almost climate-neutral.

We have it here too, and even though it smells a little funny it's renewable and sustainable.

You can stuff your dog into a hole in the ground and then pump the hole full of geothermal heat and your dog will be warm and happy.

There are hot, ayran men taking showers right now because of it.

Everyplace should use 72 percent more sustainable geothermal if they can.

Questions or ideas? Hit the comments. Also go to Iceland.

(*) Oh - sadly because the economy is in such a state, Iceland is looking into some offshore drilling to generate revenue. Somewhere Sarah Palin is smiling, and also killing a moose. There are some environmental problems there - a friend scored this film about a very tragic dam project that drowned some beautiful Icelandic wilderness. You should watch the trailer. Then go visit and spend money so they don't have to drill for oil in the ocean ...

Note: This post originally appeared at PinkoMag.com, which the blogger co-edits.

Iceland EU Application Hinges On Fishing

2009-07-23T10:14:22Z

STOCKHOLM — Iceland formally applied Thursday to join the European Union but said it would not accept a "rotten deal" for its fishing industry, a key sector of the island nation's troubled economy.

Iceland's parliament voted last week to seek EU membership as a way to stabilize the country's economy, which was one of the first causalities of the global recession after years of strong growth.

Alda Sigmundsdottir: Is Russia Iceland's New Best Friend?

2009-07-20T16:16:56Z

Last week, in a highly controversial move, Iceland's parliament voted by a narrow margin to begin accession talks with the European Union. In the flurry of activity and debate surrounding the vote, one piece of news slipped virtually unnoticed past the general Icelandic populace: that of Russia having agreed to provide a USD 500 million loan to Iceland.

Talk of a Russian loan first surfaced last year, just as the house of cards that was Iceland's financial system began to topple. At the beginning of October the board of Iceland's Central Bank announced that the Russian loan was already in the bag -- an announcement that was denied by the Russians the very next day: a cringe-worthy moment that is still being cited as proof of the Icelandic Central Bank's total incompetence at the time.

When this happened a new cold war seemed to be brewing (oh, how trivial our concerns were back then!) and the speculation was that Russia's ulterior motive was to gain hold of Iceland as a strategic base. The US, of course, had used Iceland as a strategic base for decades, or until 2006 when they unilaterally withdrew their troops. At any rate, it seemed very strange to us who populate this North Atlantic island that suddenly Russia wanted to be our new best friend -- particularly as the US was perceived to have turned its back on Iceland a few months earlier by leaving it out of an important currency swap agreement (which, in hindsight, may have been perfectly reasonable in light of all the crap and corruption that has surfaced in Iceland over the last few months).

The statement made by Geir Haarde, then-Prime Minister, at a press conference shortly after the meltdown, was certainly ominous enough:

"In such circumstances, one has to look for new friends."

And yet, after the embarrassing premature-announcement blunder, talk of the Russian loan seemed to fade into the distance. Until last week, that is, when the aforementioned news item appeared on the website barentsobserver.com. Personally I found this paragraph rather interesting:

"Russia has only minor economic relations with Iceland. The North Atlantic state remains however a geo-strategically highly interesting partner for Russia. In addition, it is believed that Russian corporate interests have invested heavily in parts of the Icelandic economy."

Okay. So this part:

"The North Atlantic state remains however a geo-strategically highly interesting partner for Russia."

... Is a no-brainer. The Arctic ice is melting and a new shipping route is opening up that will allow for much more efficient transport for the Russians than before. This in itself could have dramatic implications for Iceland, what with huge tankers potentially passing through its waters and even stopping off up north for refueling and a spot of maintenance and boozing and whatever else it is that sailors do when they stop in ports.

This part, however, I found particularly intriguing:

In addition, it is believed that Russian corporate interests have invested heavily in parts of the Icelandic economy

Whoa. Russian corporate interests have invested heavily in parts of the Icelandic economy? Um ... what Russian corporate interests?? Personally I'm not aware of any Russian corporate interests in Iceland. It's not like we have a LADA spare parts factory on the West Fjords, or a caviar processing plant on the Snaefellsnes peninsula.
UNLESS ... they're referring to the persistent rumours of money-laundering services allegedly provided by Landsbanki bank back in the days when it was still owned by the two Bjorgolfurs. Could those be the corporate interests they're referring to? Because try as I might, I can't think of any others.

At any rate, the good people at barentsobserver.com seem to know a lot more than we do:

... Analysts have also speculated about a possible new role of Russia on the island.

And on that note, I'll leave you with the only Russian word I know (so far):

BARISHNIKOV!!*

(* Which I understand is a name meaning "to defect to the United States")

Iceland EU Bid Effort Intensifies Under Economic Pressure

2009-07-17T07:57:28Z

The people of Iceland are known for their resilient, go-it-alone character. It is the result of a forbidding geography: endowed with a rugged terrain pockmarked by geysers and volcanoes, their island stretches into the Arctic Circle, and is nearly 620 miles (1,000 km) from mainland Europe.