Viktor Orri Valgarðsson stjórnmálafræðingur skrifaði á Facebook frá Bretlandi:
Today in Iceland, several conservative commentators are making the case that bribery and tax evasion is not too serious, just a natural consequence of government being corrupt and hard-working rich people wanting to increase their profits, and that government ministers being in close relationships with those people is not problematic.
Ég svaraði:
This is an extraordinary distortion of what I have said. I have never said that bribery and tax evasion are not serious. But bribery is basically and chiefly a problem of the country whose officials demand bribery; and it could be greatly reduced by removing the incentive for bribing which is the power to determine who is to receive from government hands valuable goods. (If Namibia had had the Icelandic quota system where the quotas are held by fishing firms and freely transferred between them, then there would have been no bribery possible.) Tax evasion can also be reduced by tax cuts and greater transparency. In fact, Iceland is a country remarkably free of corruption, not least thanks to the liberalisation of the economy which took place in 1991–2004 when the opportunities for political favouritism were greatly reduced, as a result of the transfer of power and resources from government to individuals.
Viktor Orri svaraði:
You said that the critique of those who paid the bribes were „disgusting“, that the CEO responsible was a great guy and that the problem was government corruption abroad; not him abusing that corruption. Thereby, you were making the case that paying the bribes was not serious; only the fact that it was possible. Unfortunately, you are not the only one making this case; two conservative MPs, including our finance minister, have presented the matter as a problem of government corruption in Namibia, without mentioning the powerful Icelandic businessmen who actually paid those bribes. And some of your right-wing cheerleaders have made the same case online.
Ég svaraði:
I said that the campaign of hatred and abuse against Thorsteinn Mar Baldvinsson was disgusting; that is not the same as a ‘critique’. I also said that it was non-controversial in Iceland that Thorsteinn Mar (who may or may not be responsible for whatever will be found) was a hard-working and creative person. You continue distorting my words. This is totally unacceptible. If you want to improve the world, you should get busy in your own little corner of it.
Viktor Orri svaraði:
„In fact, Iceland is a country remarkably free of corruption“ Lol. Ever heard of the financial crash, the Panama Papers, the leak of sensitive personal information from a minister’s department to damage an asylum seeker and the minister’s attempt to obstruct investigation into that, yourself getting paid a lot of money by your friends in the government to try to whitewash their responsibility for the crash…? Of course, if the government just gives monopolies of the fishing resources to their friends at the outset, the latter don’t actually have to bribe them for that access while they keep that monopoly. They just have to keep paying conservative politicians and media to protect that monopoly. — You came to his defence and said it was uncontroversial that he had run his company well, and when pressed on your defending bribery you asked if Icelanders bribing foreign officials in the past had been wrong? Saying that you are thereby making the case that bribery is not too serious is no distortion at all, and you had every opportunity to correct that implication. Sadly, though, I was only partly referring to your comments in the original post here.
Ég svaraði:
This description of the system in the fisheries is totally wrong, as you well know. The quotas were initially allocated on the basis of catch history (called grandfathering), and this was of course the only way to allocate them without disrupting the industry greatly. This was done in the pelagic fisheries in 1975–9, and in the demersal fisheries in 1983–4, with the system made comprehensive in 1990–1. In other words, the quotas were initially allocated more than thirty years ago. Since then they have been transferred freely, just like other scarce goods, and the system has turned out to be sustainable and profitable. So what is the problem?
Enn svaraði ég:
About the Panama Papers: I could not see anything morally wrong or illegal in what the then-Prime Minister did, as I argue here: https://rafhladan.is/…/caymanianfinancialreview…
Enn svaraði ég:
And the financial crisis? The Special Investigation Commission, after extensive investigation and unhindered access to all the relevant documents, did only find two things wrong with the Central Bank: that when it decided to refuse liquidity facilitation to Landsbanki in August 2008, it should have demanded more paperwork (which legally it could not, actually); and that when it decided to refuse an emergency loan to Glitnir in September 2008, offering instead to buy 75% of the bank, it should also have made a thorough investigation of the value of the assets (it had 24 hours to do this!). This was like mountains in labour with a ridiculous little mouse being born. This was all. — Basically in the financial crisis the authorities were in a Catch-22 situation. You are damned if you do, you are damned if you don’t, as I explain in my report to the Ministry of Finance: https://www.stjornarradid.is/lisalib/getfile.aspx… — And about this last episode, I say with Lord Macaulay: We know no spectacle so ridiculous as the British public in one of its periodical fits of morality.
Viktor Orri svaraði:
The essence of having a fishing quota system with some transferable quotas is fine, giving those away to the government’s friends (who were the biggest catchers of the time) on a silver platter is the issue. They could have been auctioned, meaning that the most efficient users would have paid a market-determined price; no more than what they believed would ensure them normal investment from that access. We’ve been over your narrow mischaracterisations of the SIR’s coverage of your friend’s responsibility many times before, the extent of corruption revealed there (and with the crash itself) across Icelandic business and politics was nauseating. Of course you don’t see anything wrong with the prime minister of the country keeping his wealth in a tax haven abroad, lying about it to the public and not reporting it to parliament. And of course you think all of this is just a „periodical fit of morality“. And of course you avoid talking about the bribes of the person you stepped forward to defend. All of this is endemic of the effort of yourself and many others to gradually shift political norms towards allowing you and your elite circle to manipulate the political and economic system as you see fit.
Enn svaraði ég:
You continue with your amazing (and some would say immoral) mischaracterisations of my case for grandfathering in the fisheries and my interpretation of the banking crisis. When the fishing grounds were closed off, there was a choice between giving quotas to fishing firms on the basis of catch history (and then to allow free transfers) or auctioning the quotas. My point was, and is, that only the former method of closing off the fishing grounds was Pareto-optimal, i.e. leaving nobody worse off. In this way those who eventually sold their quotas and left the fishery were better off; those who retained their quotas and perhaps bought additional ones were also better off; the government was better off with a more profitable fishing sector; and the public was better off with more available money for either consumption or investment. But if we had auctioned off the quotas, those who were able to buy them would have been neither worse nor better off: they would have paid to government what they previously were wasting in excessive harvesting costs. Those who were not able to buy quotas would however have been vastly worse off, seeing their life’s work destroyed, seeing their fishing capital and human capital becoming worthless in one day. Government would have been better off in the short term, with the proceeds from the auction. The public in my opinion would have become worse off in the long term by the elimination of a class of independent owners in the fisheries and by the increased power of government, but I admit this is a value judgement. I try to explain all of this as clearly as possible here: https://books.google.is/books?id=j-p8CwAAQBAJ
Ég bætti við:
And as to the financial crisis, basically the Icelandic banks were no worse or no better than banks elsewhere in terms of their assets (which is a conclusion in a book by Asgeir Jonsson and Hersir Sigurgeirsson as well). They were certainly not guilty of money laundering or LIBOR manipulation as many other banks in Europe. Indeed, those two which received orderly resolution turned out to be solvent, namely Heritable Bank and KSF in England. Why did the Icelandic banks then fall? The main reason is that they did not receive any liquidity support. The Icelandic central bank and government were not able to provide it, and others were unwilling to provide it. The US Fed gave liquidity support in the form of dollar swap deals to many central banks, including all three Scandinavian banks. Why did they need such dollar swap deals if they were in much better shape than the Icelandic central bank? It has come out that RBS in Scotland, UBS in Switzerland and Danske Bank in Denmark would all have fallen if they had not received liquidity support through the Fed system. Thus, the most imporant difference between the Icelandic banks and other European banks was simply that the Icelandic banks were not rescued like the others. Not only was that the case, but also the British government closed the subsidiary KSF of Kaupthing, thus felling Kaupthing. And more than that: the British government invoked an Anti-Terrorist Act against Iceland! In my report for the government of Iceland I show that this was totally unnecessary on the government’s own premises which was to avert any illegal transfers, because already some days before the Financial Services Authority had issued an Order to Landsbanki stopping the possibility of any such transfers.
Ég bætti enn við:
You also ignore the explanation I offered in my report for the surprising behaviour of the British Labour government which invoked the Anti-Terrorist Act against Iceland, a country which does not even have an army. There was the same situation in Germany and Sweden, deposit collection through branches, not subsidiaries. Why did the German and Swedish governments not behave as brutally as the British government? The answer is that Labour wanted to knock down the argument by its chief rival in Scotland, that there was an Arch of Prosperity extending from Ireland through Iceland to Norway. Indeed, with great satisfaction the two Scottish Labour politicians Alistair Darling and Gordon Brown said that now this had become an Arch of Insolvency! — You also ignore what is well documented in my report that the governors of the central bank (all three of them) repeatedly warned against the expansion of the banks. First, they did so in a meeting with Halldor Asgrimsson and Geir H. Haarde in late 2005, and then again in a meeting with Geir H. Haarde, Thorgerdur Katrin Gunnarsdottir and others in late 2007, and then repeatedly in 2008. But they were always met with the accounts of the banks audited by international accountant companies and by repeated assertions of the banks that everything was all right. Moreover, the social democrats were very close to the bankers (especially to Jon Asgeir Johannesson, the chief debtor of all three banks and the chief owner of one of them) and there was no political will to reduce the size of the banking sector. The governors of the central bank suggested that 1) Kaupthing would move its headquarters abroad, 2) Landsbanki would move Icesave accounts from a branch to a subsidiary, 3) Glitnir would sell its strong and robust Norwegian bank. Their ideas were not taken up and they did not have the authority, against audited accounts of the banks or agains the regulator, the Financial Supervisory Agency (headed by a social democrat and former minister), to bring about these changes. I am not sure it would have sufficed, anyway.
Ég sagði síðan:
You have no interest in understanding what happened, content with making cheap shots at people whom you regard as belonging to the elite. I am pretty sure that if you had been in charge during the bank crisis, you would have suffered a nervous breakdown. It takes experience and guts, and not the rarified and protected glasshouse existence of university students, to sail through rough waters.
Viktor Orri hélt auðvitað þvarginu áfram um stund, en ekkert nýtt kom fram í því. Og dæmi síðan hver fyrir sig.
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