Ocenaography
Inside Job
I. Effect of Economic crisis on Iceland
a. In 2000 Iceland’s government began a broad policy of deregulation
a.i. They allowed companies like ALCOA to build giant aluminum smelting plants and exploit Iceland’s natural geothermal and hydroelectric resources, many of which are located in Iceland’s majestic and ecologically fragile highlands.
b. At the same time the government privatized the 3 largest banks in the country (The banks borrowed $120 million – 3 times the size of Iceland’s economy)
c. American accounting firm KPMG audited Iceland’s banks and found nothing wrong. American credit rating agencies gave Iceland’s banks the highest possible credit rating.
d. When Icelandic banks collapsed at the end of 2008 unemployment tripled in 6 months and many people lost their savings.
e. 1/3 of Iceland’s financial regulators went to work for the banks.
II. How the Crisis Happened
a. In September 2008 the bankruptcy of Lehmann Brothers and the collapse of AIG led to the onset of the financial crisis which doubled the U.S. national debt and rendered 30 million people unemployed
b. The crisis was not an accident
b.i. Since the 1980s the financial industry has caused more and more severe crises even as the industry has made more money
b.ii. After the Great Depression the U.S. had 40 years of economic growth without a single financial crisis, partly because investment banks were private institutions owned by partners and they were conservative with investments because if their investments went bad the partners lost money
c. In the 1980s investment banks went public, providing them with huge amounts of stockholder money and people on Wall Street started getting rich
c.i. In 1981 Ronald Reagan chose Donald Regan, CEO of Merrill Lynch, as his Treasury Secretary
c.ii. In 1982 Reagan signed the Garn-St. Germain Act, which deregulated Savings and Loan companies, leading to the Savings and Loan crisis, which cost taxpayers $124 billion
c.iii. In 1985
I. Effect of Economic crisis on Iceland
a. In 2000 Iceland’s government began a broad policy of deregulation
a.i. They allowed companies like ALCOA to build giant aluminum smelting plants and exploit Iceland’s natural geothermal and hydroelectric resources, many of which are located in Iceland’s majestic and ecologically fragile highlands.
b. At the same time the government privatized the 3 largest banks in the country (The banks borrowed $120 million – 3 times the size of Iceland’s economy)
c. American accounting firm KPMG audited Iceland’s banks and found nothing wrong. American credit rating agencies gave Iceland’s banks the highest possible credit rating.
d. When Icelandic banks collapsed at the end of 2008 unemployment tripled in 6 months and many people lost their savings.
e. 1/3 of Iceland’s financial regulators went to work for the banks.
II. How the Crisis Happened
a. In September 2008 the bankruptcy of Lehmann Brothers and the collapse of AIG led to the onset of the financial crisis which doubled the U.S. national debt and rendered 30 million people unemployed
b. The crisis was not an accident
b.i. Since the 1980s the financial industry has caused more and more severe crises even as the industry has made more money
b.ii. After the Great Depression the U.S. had 40 years of economic growth without a single financial crisis, partly because investment banks were private institutions owned by partners and they were conservative with investments because if their investments went bad the partners lost money
c. In the 1980s investment banks went public, providing them with huge amounts of stockholder money and people on Wall Street started getting rich
c.i. In 1981 Ronald Reagan chose Donald Regan, CEO of Merrill Lynch, as his Treasury Secretary
c.ii. In 1982 Reagan signed the Garn-St. Germain Act, which deregulated Savings and Loan companies, leading to the Savings and Loan crisis, which cost taxpayers $124 billion
c.iii. In 1985