Hey, guys. I figured out how to save Iceland’s economy the other day. Just off the top of my head. In case anyone’s curious, or anything; I dunno.
Oh, hi, still here? Okay, good.
Iceland can turn its shattered economy around by transforming the island into a giant server farm.
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… no, wait, come back.
This plan sounds insane, of course. But it makes perfect sense for the following reasons:
1. Power Is Cheap. Iceland gets 99% of its electricity from geothermal energy and dams. When you live on an island made of hot springs and glaciers, it’s hard not to find an easy source of power. Drill a hole into the earth and stop when you hit something boiling.
2. Cold Air Is Cheap. Server farms don’t just need electricity, of course. They also need easy ventilation in order to keep the massive racks of computers cool. Fortunately, temperatures in Iceland get no higher than 55° F on average (10° C). And that’s during the hottest portions of July. Forget climate control in your server room: just vent in some outside air.
3. Real Estate is Cheap. Iceland is one of the least densely populated countries in the world (230th out of 238). The interior of the country looks like the moon – so much so that the Apollo astronauts faked practiced lunar exploration on its rocky surface. Build a warehouse in the hills outside Selfoss for pennies.
4. Lots of Overeducated, Unemployed White Guys. The collapse of Iceland’s banks put a lot of college-educated people back on the job market. A few days of retraining, and voila! All the employees you need. Or better yet: don’t bother retraining them. Let them underbid each other. Sit back and take your pick of the most talented / least demanding.
5. Serviced by International Air Travel. Unlike other cold places where real estate is cheap (e.g., the Arctic Circle), Iceland is served by IcelandAir. Icelandair flies to Boston, New York, Seattle, London, Madrid, Stockholm, Berlin, Paris and Amsterdam (as well as a dozen other cities). Basing out of Iceland gives you most of the benefits of a global hub like Heathrow at a sliver of the cost.
6. Not Too Far From The Rest Of The World. Iceland’s only a few hundred miles from the UK, and from there it’s a short hop to mainland Europe. Lay a few fiber trunklines across the North Atlantic and you have a new, reliable connection. The project to lay this trunkline between Iceland and UK should be jointly financed, as a way of mending the bridges burned by the Cod Wars.
So, there’s the business case. Iceland’s a cold, geologically unstable country full of unemployed men: an engineer’s dream. Google or Microsoft could expand their global offerings overnight by buying up the Icelandic interior and turning it into banks of servers.
Questions? Comments? Bids on the initial shares will start at one million dollars euros.
Heat, Part One. Hot water in Iceland stinks, literally. The entire island sits on bubbles of sulfuric water, requiring only a little drilling to summon to the surface. The amount of effort that the rest of the world puts into heating water for the home, a Reykjavik home has to put into cooling it.
The result: cheap hot springs open to the public! I stopped by a public spring on Sunday morning, paying a mere 360 ISK and getting access to a swimming pool, a sauna and two outdoor hot tubs. Nothing beats the pummeling relaxation of sitting by a water-jet in 102-degree water, or lying perfectly still in a 107-degree pool with your head in the 35-degree air.
One of Reykjavik's many halted construction projects
Come Back Later: Everything in Reykjavik except the bars and the restaurants closes by 7:00 on Saturdays and stays closed through Sunday. Check that: I did find a couple museums still open on Sunday, so I walked around and peered at some medieval copies of the Eddas.
Things I Bought but Didn’t Use: This being my first trip out of the country alone, I prepared more than I probably needed to. I left the security pouch (small sleeve that hangs on a cord around your neck for passport, money, etc) in my hotel room the whole time – I was in zero danger from pickpockets. I could have made some use out of the mini-tripod (not an actual Gorillapod, but similar), but there was enough precip. and wind at all times that I didn’t want to leave my camera alone. And I left the power converter/adapater in Boston: I had nothing on me that needed charging.
Half-Price DVDs: Hollywood insiders, or TV shows that depict Hollywood insiders, talk about the lucrative value of the overseas DVD market. Nothing drove that home for me more than seeing rows of DVDs for sale – in stores, in flea markets – of movies I’d forgot existed. Like Dummy, or career-killer Private Valentine (starring Jessica Simpson).
No color filters used. The sky and water are naturally this blue.
Heat, Part Two: Get on the bus from Reykjavik to Leif Eriksson International at the right time and it drops you off halfway, at the internationally acclaimed Blue Lagoon spa. A natural hot spring, the spa’s chief attraction is a massive outdoor rock pool (at least 100,000 square feet) of milky blue water. The pool generates large quantities of thick silicate mud with documented results in alleviating psoriasis and other skin conditions. You can ladle a handful from one of many buckets stationed throughout the pool, or just scoop some up from between your toes.
After yip-yip-yipping from the spa door across the open, windy deck, I plunged into the rock pool and lazed around. The mood’s like a cocktail party in the summer – over a hundred strangers in swim wear, wandering around in knots and making new friends. I waded around the perimeter, lingering in any pockets of extra-hot water that I found, before taking a quick break for a steam bath. Then I scooped out some algae-laden mud, worked it in my hands until it had the consistency of melting vanilla ice cream, and rubbed it into my face. After it hardened, I stepped under a deafening, sulfuric waterfall to rinse off.
Then I did it all over again. I was like a cat in a sunbeam.
Parting Thoughts: You didn’t ask, but I gave a little thought to Reykjavik’s current economic straits. Nobody I talked to or saw seemed particularly desperate, but I never ventured too far from the city center. Downtown Reykjavik is a cozy nest of shops, bars and restaurants that all hinge on tourist dollars to survive. The locals don’t eat there: someone asked a coffeeshop proprietor where she’d go to eat around there, and she mentioned a pizza place.
The entire city felt empty. Maybe the driving snow kept the marginal visitors indoors, but even on Saturday night Reykjavik never looked more crowded than Salem, MA. And while Reykjavik’s a small city, it’s also a global tourist hot spot and (until recently) a major center of finance.
I can’t speculate as to causes or cures. Michael Lewis’s excellent article on Iceland sums up the economic climate better than I could. But, economics nerd that I am, I have to make one idle observation:
Every place I went to took credit cards. Every single one. Every hotel, bar, restaurant, corner shop, museum, airport cafeteria and bus stop kiosk. Of the 10,500 ISK that I got on Saturday morning, I still had paper and coins left over when I left on Monday night.
I’m not against credit cards, mind you: anything that reduces transaction costs eases trade, and thus lifts all boats. But running a business that takes credit cards costs money. Visa, Mastercard and American Express all charge merchant fees. This is why some stores (in violation of their agreement with the company, but shhh) require a minimum purchase if you use plastic.
No one in Reykjavik did, though. If I didn’t already have the coins handy, I could have paid for my 260 ISK hot dog with American Express. That’s a $1.58 transaction.
Lots of credit cards are a symptom of lots of credit. Economists have always touted the easy expansion of credit as a feature, not a bug, of Keynesian macroeconomics. Wealth on paper exceeds wealth in fact – banks write checks on houses they don’t own, and hand those checks to financiers who leverage them in speculative investments. Credit expands, until “the stock market multiplie[s] nine times [and] real-estate prices triple.”
Reykjavik could be a look into the U.S.’s future. Everyone acknowledges things are bad in the U.S. at the moment, but there’s still the fear that they could get worse. Pundits, investors and politicians all look for a warning sign that the economy’s about to make one last, tottering collapse. I’m not an expert, and my judgment is strictly anecdotal. But here’s a handy rule: when the one-man hot dog stands start taking credit cards, run.
More Like NIceland: Everyone I met in Reykjavik was cordial. Not quite friendly and outgoing, the way you’d get in the American South, but civil and helpful. Mix a laidback eagerness to please with the inherent stoicism that comes from any cold-weather climate, and you get an Icelander. I stumbled stepping off a curb and a complete stranger asked, “You okay?” The cute blonde at the coffee shop rattled off a list of suggestions when I asked for a good place to go dancing. One in three cars I saw on the street had all its doors unlocked. And everyone speaks English.
At least once a day. Every day. Just like this.
Weather: Every day, you’d get 45 to 90 minutes worth of blizzard. Then the sun would come out. Then it would rain – sometimes light spitting, sometimes a steady downpour. Then overcast. Then sun. Then, perhaps, more snow. You get odd little patterns like these when you live between the North Atlantic and the world’s quota of glaciers.
Food. Pricey. Everything on Iceland other than fish, lamb, hot water and light beer needs to be imported. Since I didn’t fly three thousand miles to experience Reykjavik’s notion of a cheeseburger, I ate seafood for most meals. Lunch on Saturday was fish and chips, and the fish had that sinus-filling freshness that suggested they’d been in the sea the other day. Saturday dinner: plokkfiskur at a restaurant called Boston – a fish “stew” that’s served like a plate of mashed potatoes.
I asked the waitress at Cafe Paris what the fish of the day was for lunch on Sunday. She looked up for a moment, searching for words in her head. “Hot dog,” she replied, in the heaviest accent I heard that weekend.
“No, sorry – the fish of the day.”
She nodded, turning to double-check on the chalkboard at the front of the restaurant. I followed her gaze. “Had-dock” was, indeed, the fish of the day.
Iceland just can't get enough of these above-average hot dogs.
Actual Hot Dog: Apparently, hot dogs (or pylsur) are a big deal in Iceland. I saw the longest line that I saw for any establishment – including the nightclubs I visited on Saturday – outside a one-man hot dog stand on the Reykjavik harbor. In the snow. The hot dogs taste pretty good, but the toppings make the difference. Icelanders order their pylsi with a creamy remoulade. You wouldn’t think a hot dog lacked for something sweet but it really ties the package together.
Beer: If you want to drink the local brew, know these three brands: Viking (like Budweiser, but with flavor instead of water); Gull (a bit hoppy for my taste but still solid) and Thule (which I didn’t try). These are all golden-colored lagers with hearty taste. You can also find Guinness on tap nearly everywhere.
Apotek before things heated up.
Clubs: As with other cities in Europe, the nightclub scene in Reykjavik doesn’t really start until midnight, and doesn’t really start until 2:00 AM or so. I ended up killing a lot of hours in coffeeshops until the night scene picked up. Though you have your choice of fine dancing establishments, I bounced between Cafe Paris and Apotek from midnight onward.
In Apotek, a stringy-haired elf of a man snatched a scarf off a girl and taunted her with it as she tried to grab it back. She called the bouncer, who remonstrated with the guy until finally tossing him out. The miscreant dragged his weight, clinging to a railing in the end to keep from being thrown outside.
This didn’t kill my mood, though. I danced until 4:00 AM, hopping on a bench with a bunch of strangers to lord my gangly might over the crowd. This being Europe, I recognized almost none of the songs. That never hurt me, though.
I didn’t know what to expect for my first international flight traveling alone, so I got to Logan early. I kicked my shoes off for the security line but, in the current production of TSA security theater, did not have to present my boarding pass. With several hours to kill, I had a few beers at Houlihan’s, chatting with an electrical engineer working for Dean Kamen. We swapped horror stories of driving in Boston weather. She won, having spun out on New Year’s Eve onto the lawn of the Goffstown, NH police station.
The currency exchange booth in the Logan Terminal offered every currency in the world except Icelandic kroner (ISK).
I talked my way into the emergency exit row, though I had to take a middle seat. Fifteen minutes before takeoff it looked as if I would have the row to myself. Then the smiling though heavily made-up air steward sat the biggest man I’d ever seen next to me. Picture Bobby before he lost all that weight, for those of you who know Bobby. For those of you who don’t: the man was at least a head taller than me and eight to twelve heads heavier. His belly spilled over the armrest. When my arm grazed against him it felt like I had just brushed too close to a fire. I had no idea how I would sleep, let alone sit still, for four and a half hours.
Then the flight attendant brought another man down, chatting with him in Icelandic. Everyone in Iceland knows each other, since the entire country has half the population of downtown Boston and most of them live in Reykjavik. The window seat was still open. “These two are friends,” she said, indicating the titanic man sitting next to me and the newcomer.
“Would you like to sit next to each other?” I offered.
“If it’s not a …”
“No trouble at all,” I said, shifting over one. “I assure you.”
I couldn’t get the window seat to recline, unfortunately. I slept for three fitful hours, aided by 10 mg of melatonin and the three Sam Adams from the airport bar, and then watched some Arrested Development and How I Met Your Mother on the seatback TV. My verdict on HIMYM: silly and diverting.
First impressions of Leif Eriksson International: a product of the Industrial/Aquarium school of architecture that swept Europe in the 30s and the U.S. in the 60s. Expansive windows look out onto pitch blackness (at 0630 Iceland time) or, once the sun rises, the snow-covered lunar landscape of Keflavik. I went through another security sweep, this one with shoes on, and then got my first stamp in my new passport from a bored Icelandic guard.
LEI has a remarkably libertine attitude toward customs: walk left if you have something to declare; walk right if you don’t. I went straight for the Nothing line and two bored blonds in guard uniforms – one male, one female – gave me a quarter-second glance of disappointment then returned to their conversation. Call me a maverick, but Iceland might benefit more, given its current economic straits, from doing away with its Customs department entirely. Or maybe even setting up an anti-Customs office. “You will be subjected to humiliating search unless you’re bringing in $100 or more of trade goods, foreign fruits or international currency.”
I changed $100 U.S. for 10,500 ISK – brightly colored bills and a handful of nearly worthless coins. Enticed by the prospect of lucrative savings, I browsed the duty-free mart, which was open and bustling at 0700 in the morning. Sadly, not even the prospect of not paying customs duties, or getting a refund on any Icelandic VAT I spent in-country, made the liquor cheap enough to buy. It had to get made in the U.S. and shipped across the ocean first, after all.
Tired and still disoriented by lack of sleep, I bought a bus ticket to Reykjavik and stepped outside. A vicious horizontal wind checked my stride, bringing with it the icy smell of the North Atlantic. The sun creeped over the horizon as the bus trundled along, casting a gorgeous glow over the Icelandic countryside. I finally remembered why I came.
In the worship of security we fling our lives beneath the wheels of routine – and before we know it our lives are gone. What does a man need – really need? A few pounds of food each day, heat and shelter, six feet to lie down in – and some form of working activity that will yield a sense of accomplishment. That’s all – in the material sense, and we know it.
But we are brainwashed by our economic system until we end up in a tomb beneath a pyramid of time payments, mortgages, preposterous gadgetry, playthings that divert our attention for the sheer idiocy of the charade. The years thunder by, the dreams of youth grow dim where they lie caked in dust on the shelves of patience. Before we know it, the tomb is sealed.
On March 13th I’m flying abroad, by myself, for the first time in my life.
You should really get someone to travel with you. Well, I can’t. And that’s not going to stop me.
They speak a different language over there, you know. So? It’s Northern Europe; I’m bound to find an English speaker somewhere. If not, it’ll be an exercise in non-verbal cues.
You could lose your wallet, or your passport, or get stabbed or drugged or kidnapped. I’m a white guy with good hair who speaks English. The entire Western Hemisphere is practically conspiring to make sure nothing bad happens to me.
You could end up cold, miserable and bored. I’m only going for a weekend. Worst case scenario, I’m out three days and a couple hundred bucks.
You … All right, enough of this.
Even if the fears I have about traveling abroad weren’t trivial, I shouldn’t be letting fear make decisions for me anyway. I’m young, single, employed and out of debt. There’s no better time in my life – other than years ago – to explore. Time to get it over with and start testing myself on that jagged edge.
First and most important, c/o Phanatic (who swiped it from a friend of his) here’s some fresh breakin’ to start your day.
Next: I remember reading a copy of the Journal at the kitchen table in the family homestead over Christmas and seeing a full-page ad for Lifelock – an identity theft protection service. In this ad, which I’m sure you’ve seen since, Todd Davis, CEO of Lifelock, stood in front of block text declaring his Social Security Number to the world. So confident was he, apparently, in his company’s product.
Well, according to a class action lawsuit filed last week, the inevitable happened:
“The lawsuits allege that LifeLock and its multi-million-dollar advertising campaign provided false and misleading information about the limited level of identity protection the company provides, and failed to warn them about the potential adverse impact the company’s services could have on their credit profiles,” according to the press release.
Additionally, the release alleges that Lifelock CEO, Todd Davis has been a victim of identity theft multiple times since using his SSN as a marketing tool to sell the service.
“Overweight:”Definition changed from BMI ≥ 27 to BMI ≥ 25 by the U.S. National Heart Lung and Blood Institute in 1998, instantly increasing by 43% the numbers of Americans, an additional 30.5 million, deemed ‘overweight.’
“High cholesterol:”Definition changed from a total cholesterol ≥ 240 to ≥ 200 in 1998 increasing by 86% the numbers of Americans labeled has having high cholesterol, an additional 42.6 million adults.
“Hypertension:”Definition changed in 1997 from 160/100 to 140/90, instantly adding 35% more Americans, 13.5 million, to the rosters of hypertensive. A new definition for ‘prehypertension’ in 2003 increased to 58% the Americans believing they have hypertension.
“Diabetes:” Definition changed from a fasting glucose of ≥ 140 to ≥ 126 in 1997 by the American Diabetes Association and WHO Expert Committee on the Diagnosis and Classification of Diabetes Mellitus, increasing by 14% and 1.7 million the people diagnosed with diabetes. With the proposal of a new term, ‘prediabetes’ by the First International Congress on Prediabetes, and promoted by the International Diabetes Federation (sponsored by 12 pharmaceutical companies), 40% of the adult population was added to the rosters believing they have diabetes and are in need of treatment.
I’ve still seen plenty of fat Americans, but this explains a lot.
One of the illusions that convinced some otherwise well-meaning people to go along with the conquest of Iraq in 2003 was, “Iraq is so bad, how could we make it worse?” But we could. So with Burma. I know almost nothing about the junta that rules Burma. But I know that it’s the junta that rules Burma – that is, that they’ve extended their writ over a preponderance of the territory we think of as Burma, more or less. That is to say, they successfully maintain power.
The junta apparently numbers 19 guys, but 19 guys don’t run a place like Burma by themselves. They’ve got people for that. Cops, soldiers, secret policemen, bureaucrats. And those people have families and friends and hangers-on. Stakeholders. And apparently “regional commanders enjoy a great deal of autonomy in their respective areas.” So they and their retainers and whoever else profits from existing arrangements have a stake in the existing system. And the habits and attitudes of the bulk of the population are the habits and attitudes that enable one to survive under tyranny. It’s not about knocking off that one bad guy and his eighteen friends. There’s a whole set of structures and class interests and cultural patterns, local peculiarities and regional fault lines to cope with. I don’t know much about Burma, but I know that much about any place. It’s hubris to be sure you can start rearranging such a society without a good chance of making it even worse.
And, because I haven’t ragged on President Dog in a while:
“I believe that it’s not an accident that our hostages came home from Iran when President Reagan was president of the United States. He didn’t sit down in a negotiation with the religious extremists in Iran, he made it very clear that those hostages were coming home.’’
[…]
Asked if he thought Mr. Obama was an appeaser — the Democratic candidate has said he would be willing to meet with Mahmoud Ahmadinejad, the president of Iran — Mr. McCain sidestepped and said, “I think that Barack Obama needs to explain why he wants to sit down and talk with a man who is the head of a government that is a state sponsor of terrorism, that is responsible for the killing of brave young Americans, that wants to wipe Israel off the map, who denies the Holocaust. That’s what I think Senator Obama ought to explain to the American people.’’
I should barely need to open my mouth to refute something this illiterate, but:
(2) Not that I want to defend Obama’s foreign policy acumen, but: Senator Obama would probably want to sit down with the head of Iran for the same reason Reagan sat down with Gorbachev, or the same reason Nixon shook hands with Mao Zedong. I know these aren’t strictly analogous cases, as Russia and China were threats to the U.S. and Iran is not, but I hope everyone can still follow along.
Fear, in other words, is a tax, and al-Qaeda and its ilk have done better at extracting it from Americans than the Internal Revenue Service. Think about the extra half-hour millions of airline passengers waste standing in security lines; the annual cost in lost work hours runs into the billions. Add to that the freight delays at borders, ports and airports, the cost of checking money transfers as well as goods in transit, the wages for beefed-up security forces around the world. And that doesn’t even attempt to put a price tag on the compression of civil liberties or the loss of human dignity from being groped in full public view by Transportation Security Administration personnel at the airport or from having to walk barefoot through the metal detector, holding up your beltless pants. This global transaction tax represents the most significant victory of Terror International to date.
The new fear tax falls most heavily on the United States. Last November, the Commerce Department reported a 17 percent decline in overseas travel to the United States between Sept. 11, 2001, and 2006. (There are no firm figures for 2007 yet, but there seems to have been an uptick.) That slump has cost the country $94 billion in lost tourist spending, nearly 200,000 jobs and $16 billion in forgone tax revenue — and all while the dollar has kept dropping.
[…]
What is happening to the American character? True, the country has gone through crises of confidence before, some of them cresting in sheer hysteria — from the Alien and Sedition Acts to Sen. Joseph McCarthy’s search for a commie under every State Department desk. But the worst acts from 1798 were repealed or allowed to lapse within three years, and the senator from Wisconsin was censured a few years into his red-baiting career. Alas, the USA Patriot Act and DHS have already endured longer than either earlier excess, and neither is fading.
I vaguely recall someone mentioning how important it was that American citizens live out their lives as normal – without fear, in other words – in the days immediately following the September 11th attacks. My mistake.
Next, you might have seen this on a CNN scrolling banner last week: Marijuana may up heart attack, stroke risks. Of course, the beauty of modern cable news comes from not having to tell you the interesting parts of the story:
The marijuana users in the study averaged smoking 78 to 350 marijuana cigarettes per week, based on self-reported drug history, the researchers said.
78 joints per week makes 11 per day, or one every hour and a half while awake. 350 joints per week makes 50 a day. Drinking 50 glasses of distilled water per day would cause kidney problems, but you don’t see that making the news.
Was there some mythical era of American journalism when obviously bogus news stories like this one would have been caught at the editor’s desk? Or is that wishful thinking?
Finally, I worry about the rising price of oil as much as anyone, but I hope that my worries sound more literate than those of the dumbest man with a Times byline, Paul fucking Krugman:
Now, speculators do sometimes push commodity prices far above the level justified by fundamentals. But when that happens, there are telltale signs that just aren’t there in today’s oil market.
[…]
The only way speculation can have a persistent effect on oil prices, then, is if it leads to physical hoarding — an increase in private inventories of black gunk. This actually happened in the late 1970s, when the effects of disrupted Iranian supply were amplified by widespread panic stockpiling.
But it hasn’t happened this time: all through the period of the alleged bubble, inventories have remained at more or less normal levels. This tells us that the rise in oil prices isn’t the result of runaway speculation; it’s the result of fundamental factors, mainly the growing difficulty of finding oil and the rapid growth of emerging economies like China. The rise in oil prices these past few years had to happen to keep demand growth from exceeding supply growth. [emphasis mine]
Speculators? Hoarders? Heaven forfend, Dr. Krugman! Are the Freemasons poisoning the wells? Should I let some blood to dispel the bad humo(u)rs? Quick, without peeking at a calendar: what century are we living in right now?
The bizarre distinction between “speculators / hoarders” and the “fundamental” business of the market belies an odd, illiterate bias on Krugman’s part. To demonstrate why, substitute the word investor for every instance of the word speculator or hoarder. They’re the same thing: people who buy a commodity in the expectation that its price will rise. But one can be found in every basic Econ textbook in print today – none of which, apparently, Krugman has ever read – while the other evokes images of a miser in a mud hovel on the outskirts of a Prussian village. Speculators! Hoarders! Assemble a posse! Notify the burgomeister!
Maybe I wouldn’t be so mad all the time if I lived in Iceland:
Iceland, lodged in the middle of the North Atlantic with Greenland as its nearest neighbour, was too far from the remit of any but the more zealously obstinate of the medieval Christian missionaries. It is a largely pagan country, as the natives like to see it, unburdened by the taboos that generate so much distress elsewhere. That means they are practical people. Which, in turn, means lots of divorces.
‘That is not something to be proud of,’ said [city councilor and single mom] Oddny [Sturludottir], with a brisk smile, ‘but the fact is that Icelanders don’t stay in lousy relationships. They just leave.’ And the reason they can do so is that society, starting with the parents and grandparents, does not stigmatise them for making that choice. Icelanders are the least hung-up people in the world. Thus the incentive, for example, ‘to stay together for the sake of the kids’ does not exist. The kids will be just fine, because the family will rally round them and, likely as not, the parents will continue to have a civilised relationship, based on the usually automatic understanding that custody for the children will be shared.
Fewer Puritans, a high GDP, greatest number of books per citizen and hot springs? I now have a designated escape country.
Periscope Depth 