[jdmichal]

So, when I look at what Norway has done with its oil money, I wonder what prevented communities like these from doing the same thing. Removal of the coal from the ground generated excess value, otherwise the mines would have lost money and been closed already. Where did this excess value actually flow? Did the community actually capture enough of the value flow to change its fate? Or did it only capture enough to survive, and now since that value flow is ending so does its survival?

[mmanfrin]

That excess value was captured by a select few, rather than by the government (as in Norway).

[digi_owl]

And Norway was basically warned about the problem by an Iraqi that had experienced it once before.

Not that the oil fund is perfect. Using it can drive the currency haywire.

[mandevil]

The problem is that extractive industries drive Dutch Disease. A Sovereign Wealth Fund can fight it, but Dutch Disease will have an effect. (The other thing that can be done is to have the entire country save more, by running a budget surplus and encouraging individuals to save more as well. This is... somewhat hard to do, in practice, without incredibly strong social cohesion.)

[vkou]

It's a lot easier to do when important sectors of your economy aren't addicted to consumer credit. People don't buy tankers full of oil on credit cards, but they do buy Fords.

[ThrustVectoring]

Blaming debtors for indebtedness is like blaming heroin addicts for drug-running. It's a two-sided market, and savings gluts can and will drive down the price of credit until the market clears.

[dredmorbius]

Any references on that?

[digi_owl]

http://www.cbc.ca/news/canada/iraqi-farouk-al-kasim-behind-n...

[dredmorbius]

Thanks!