The Iceland rebellion

In many countries, taxpayers are rightly cranky over the idea that their governments are bailing out banks and others — including their own regulators and central bankers — who helped create the 2008 global financial meltdown. Iceland appears to be setting a new standard of taxpayer response that politicians everywhere might want to note.

Under pressure from voters and taxpayers, Iceland’s President, Olafur Ragnar Grimsson, this week refused to sign a bill to reimburse almost $6-billion to Britain and Holland for money paid to depositors who put money into two high-flying Icelandic banks that failed in 2008. The president was responding to taxpayers who are essentially rebelling against being forced to pick up the tab for a financial bailout of depositors, regulators, foreign governments and even their own government and politicians.

It is only a bit of an exaggeration to say that the people of Iceland are refusing to pay for all the schemes of private bankers and public officials who, over the course of the last decade, drove the whole of Iceland into bankruptcy.

Cracking the Real Estate Code

What is the agent’s incentive when selling her own home? Simple: to make the best deal possible. Presumably, this is also her incentive when selling your home; after all, her commission is based on the sale price. And so your incentive and the agent’s incentive would seem to be nicely aligned.

But commissions aren’t as simple as they seem. First of all, a 6 percent commission is typically split between the seller’s agent and the buyer’s. Each agent then kicks back half of her take to her agency. Which means that only 1.5 percent of the purchase price goes directly into your agent’s pocket.

So on the sale of your $300,000 house, her personal take of the $18,000 commission is $4,500. Still not bad, you say. But what if the house was worth more than $300,000? What if, with a little more effort and patience, she could have sold it for $310,000?

After the commission, that puts an additional $9,400 in your pocket. Yet the agent’s additional share – her personal 1.5 percent – is a mere $150. So maybe your incentives aren’t aligned after all. Is the agent willing to put out all that extra time and energy for just $150?

Improving Incentives for Real Estate Agents

Suppose that Rick [the real estate agent] were to get 10% of the portion of the sale price above $300,000 instead of 2% of the whole price. Now a $25,000 difference in the sale price makes a $2500 difference in Rick’s commission. This more closely aligns Rick’s interests with Hanna’s [the homeowner] interests.

The big problem with this idea is that it supposes that all parties have a good idea of a fair sale price. With this type of commission structure, Rick is strongly incented to convince Hanna that her house is worth less, say $350,000, and that way the deal will give him 10% of the sale price above $280,000. If Rick then sells the house for $375,000, he gets a $9500 commission instead of $7500.

Library and Archives Canada

Veronica Foster, an employee of the John Inglis Co. Ltd. Bren gun plant, known as “The Bren Gun Girl” poses with a finished Bren gun at the John Inglis Co. plant.

Renouncing Islamism: To the brink and back again

As children and teenagers, the ex-jihadis felt Britain was a valueless vacuum, where they were floating free of any identity.

Ed Husain, a former leader of HT, says: “On a basic level, we didn’t know who we were. People need a sense of feeling part of a group – but who was our group?” They were lost in liberalism, beached between two unreachable identities – their parents’, and their country’s. They knew nothing of Pakistan or Saudi Arabia or the other places they were constantly told to “go home” to by racists.

Yet they felt equally shut out of British or democratic identity. From the right, there was the brutal nativist cry of “Go back where you came from!” But from the left, there was its mirror-image: a gooey multicultural sense that immigrants didn’t want liberal democratic values and should be exempted from them. Again and again, they described how at school they were treated as “the funny foreign child”, and told to “explain their customs” to the class. It patronised them into alienation.

“Nobody ever said – you’re equal to us, you’re one of us, and we’ll hold you to the same standards,” says Husain. “Nobody had the courage to stand up for liberal democracy without qualms. When people like us at [Newham] College were holding events against women and against gay people, where were our college principals and teachers, challenging us?”

An economic colossus, born in bloodSince 1978, [China’s] annual economic growth rate has been a formidable 8% to 9%; and since 1990, per capita annual income has risen from $350 to $3,000. There are the predictable claims of imminent Chinese world economic supremacy, but we have heard all that before from the Nazis, Soviets, and Japanese, and they should be received with caution.

There are still at least 800 million Chinese peasants who live much as they did thousands of years ago. There is a population control plan that will raise the average age by one year every two years for at least two decades, and reduce the worker-to-retiree ratio from 3-to-1 to 2-to-1 in the next 20 years. There are acute shortages of land and water, and most social services.

Government spending on health and education has declined from 25% to 35% in 20 years. The private sector has taken up a lot of this, but about half the population receives no medical care at all. The percentage of middle school students going on to high school has actually declined by a third in the last 20 years.

The state still owns the country’s banks, natural resources, heavy industry and telecommunications, and controls about 35% of all production. Ecological damage is very serious and costly, affecting three quarters of the country’s water courses and most of its air. Distinguished China specialist James Fallows reckons that China suffers 250 deaths in mining accidents every day.

The last word: Nothing but the truth

Radical Honesty is based on a simple premise. [Brad Blanton, founder of the movement], a 69-year-old psychotherapist, claims that everyone would be happier if we just stopped lying, if we just told the truth, all the time. That would be radical in itself, of course—a world without fibs. But Blanton goes further. He says we should toss out all the filters between our brains and our mouths. If you think it, say it. Confess to your boss your secret plans to start your own company. If you’re having fantasies about your wife’s sister, Blanton says to tell your wife and tell her sister. To him, it’s the only path to authentic relationships, the only way to smash through modernity’s soul-deadening alienation. Oversharing? No such thing.

My interview with him turns out to be unlike any other in my years as a journalist. Usually, there’s a fair amount of butt kissing and diplomacy. But with Blanton, I can say anything that pops into my mind. In fact, it would be rude not to say it. I’d be insulting his life’s work.

“I was disappointed when I visited your office,” I tell him. (Earlier, he had shown me a small, cluttered single-room office that serves as the Radical Honesty headquarters.) “For my essay, I want this to be a legitimate movement, not a fringe movement.”

“What about a legitimate fringe movement?” he says.

Blanton’s movement is at least sizable, if not huge. He has sold 175,000 books in 11 languages and has 25 trainers assisting workshops and running practice groups around the country.