Norway Gets Ready to Relive the Past

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Matt Yglesias points out today that Norway is in the middle of a gigantic housing bubble, and as I recall, Denmark is too. (I’m not sure about Sweden.) You can say all the usual things about this, but what’s most interesting from the “this time is different” perspective is that Norway has already had a gigantic housing bubble. Not the one a century ago in 1890, but the one a mere 20 years ago that led to a banking crisis starting in 1988. It’s the red oval in the chart on the right, and even though it looks like a blip compared to the current bubble, it was anything but. It led to the collapse of Norway’s banking sector, an all but total collapse of the housing market in Oslo, a taxpayer-led bailout, and Norway’s exit from the ECU (the precursor to the euro).

But despite this near-death experience, within a mere two decades Norway is in the midst of a housing bubble that makes the last one look like a pipsqueak. The good news is that they’re no longer in a fixed-rate exchange area, which gives them more flexibility, but it’s still a bubble, and even with a krone that floats it’s a pretty dangerous place to be. We really never learn, do we?

Interested in more? The definitive report on the 1988-92 crisis is here, and it’s recommended reading for anyone who wants to understand banking collapses and how they can be dealt with. Also, read this John Hempton post from 2008, which explains what happened and suggests that Spain might be next. The new report from which the chart above is taken is from the San Francisco Fed.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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