Can you outline any parallels between the East Asian IMF response and the proposed bailouts in terms of:
European Tribune - Comments - In praise of bankruptcy
The propped-up exchange rate allowed wealth to flee the country in favourable terms,
i.e. Does propping up the banks allow wealth to flee the bank before the (what now looks inevitable) nationalisation happens anyway?
how do we write a proposal to tax the transactions?
First, new governments will have to be elected; second; the nature of election finance will have to be changed to remove the stranglehold now held by wealth over politics. Then a serious program of wealth redistribution, framed as "disgorging ill gotten gains," could be devised. This would need to be coordinated on an international level.
If the choice were between surrendering 80% of your personal wealth or having to move to Burma or the Central African Republic or some other such "haven" there might be many takers. How about million dollar bounties on fugitive billionaires? Dead or alive? Might not get back the money, but it could discourage flight. Might as well dream big! :-) As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
So if the banking system is so badly damaged, is it worthwhile fleeing anywhere? what are the strong places where it is worth running to? or is any strength in the current climate a chimera? Any idiot can face a crisis - it's day to day living that wears you out.
Bloomberg: Iceland Seeks Loan From Russia, Pegs Currency (October 7)
The central bank said it pegged the krona against a basket of currencies at a rate equivalent to 130 per euro. According to Nordea Bank AB, the krona traded at 200 to the euro as of 11:39 a.m. in Reykjavik. That's 53 percent weaker than the peg implies.
How's your Rysskräck doing today? A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
