Last Bastion
of Democracy

Reykjavik, Iceland

Maggie Thatcher and her bitch, Ronnie Raygun, were the figureheads that launched the last forty years of kleptocratic economic criminal activity that still has Europe, North America and even the rest of the world on the brink of economic collapse of a degree not seen since the end of the last gilded age of greed that came to a crash in the fall of 1929. Unlike that time, when many of the perpetrators served justice to themselves by jumping out the windows overlooking Wall Street, this time the worldwide reaction has been mostly to assist the criminals and reward their bad behaviour by bailing them out at taxpayer expense, so that they could lose little time at getting back to giving themselves unwarranted mega-bonuses for bad performance of their fiduciary responsibilities. Meanwhile the victims of the "Masters of Wall Street's" just have to suck it up and get used to living in the street, while the perps flip the foreclosed homes to each other for pennies on the dollar, because it would be "morally hazardous" to try and work out a reasonable re-payment plan with the original purchaser.

So today the world watches as the Sarkozys, Merkels, Geitners and Camerons impose "austerity" on the masses of Greece, Italy, Ireland, Spain, the UK and elsewhere, while dispensing bailout funds in the trillions on those who created the problems with their ponzi schemes or casino style "free market" Kapitalism - risking other peoples' money while they win if they profit and everyone else loses if they don't, though they still win - thanks to the taxpayer bailouts. This is little more than a stark example of socializing risk while privatizing profits and then these same "conservative" (they call themselves) assholes claim they deserve extravagant bonuses because of the risks they take and the skill with which they go about it!

Icelanders are a very smart and capable people, they've had to be to survive in the environment in which they live, which though rich in resources presents many challenges in weather and geologic forces. So when the biggest industry in modern Kapitalism became playing with imaginary or other peoples' money, rather than actually producing anything, Icelanders jumped in with both feet and for a number of years were doing very well at it, thank you! Doctors, teachers, lawyers and farmers decided to follow their professions or trades was a mugs game when one could become a millionaire or billionaire by playing computer games with exotic imaginary derivative investment instruments that were often less than betting on the weather in Rangoon at noon on April Fools Day!

Inevitably, in 2008, when the house of cards started to fall down for everyone, Iceland's not only fell first but perhaps hardest and all of a sudden three banks owed more than the combined GDP of the entire nation and Gordon Brown and the bankers all expected the Icelanders to suck it up and pay them for their foolishness. To begin with the conservative government of Iceland at the time, like the Obama, Merkel, Sarkozy etc. administrations figured they should indeed assume the debt, even though the people and taxpayer's hadn't been partners in the profits, except for those in the game personally. But then a funny thing happened - the people of Iceland called bullshit and began demonstrating and protesting in a sustained and increasingly violent manner and over the next couple of years not only tossed their government out of office, but forced various referenda on issues such as bailing out the banks and then even started criminal proceedings against not only shady banksters and fraudsters but politicians including Prime Minister, Geir Haarde, who had already been forced to resign.

The President of Iceland, who respected the will of the people and allowed them to re-write the constitution and hold referenda on bailout proposals figures that Gordon Brown, the former P.M. of the UK, will be remembered longer in Iceland than in Britain, though he wouldn't necessarily want to go there. The UK and Europe did everything but threaten to invade and occupy Iceland when it started to be evident that Iceland might just decide to let the banks who after all had leveraged themselves to the hilt take their own losses and too bad, so sad for those other European banks that had believed the phoney ratings on the sleazy bonds and other trick investments. The US basically said they could do nothing, and the UK and Europe basically said that if Iceland let the banks fail, that Iceland would return to the dark ages as no one would ever invest there in the future and they could live in the dark and eat fish.

Anyway, long story short, the people voted to tell the banks to take a hike and go broke just like anybody else with a gambling disorder dumb enough to bet the farm on goofy rigged games. Lo and behold the world didn't come to an end and even stranger, Iceland is already performing economically better than any other jurisdiction in North America and/or Europe. According to Bloomberg , hardly an anti-Kapitalist outfit:

Dec. 7 (Bloomberg) -- Iceland’s economy grew in the third quarter as the first western nation to succumb to the global financial crisis in 2008 shows signs of a sustained recovery.

Gross domestic product expanded 4.7 percent from the second quarter, after shrinking a revised 3.6 percent in the previous three-month period, the Reykjavik-based statistics office said in a statement on its website today. Output expanded 4.8 percent from a year earlier, the office said.

Iceland is emerging from its 2008 banking meltdown as the euro area sinks deeper into its debt crisis. It costs less to insure against an Icelandic default than it does to guard against a credit event in the common currency bloc, credit default swaps show. Iceland’s government successfully tapped international debt markets in June while Arion Bank hf, formerly Kaupthing Bank hf, said this month it may sell Eurobonds in the next 12 months.

Exports grew 6.8 percent from the previous quarter, while household spending increased 1.1 percent, the office said. Overall national expenditure rose 1.6 percent.

Iceland’s economy will grow 2.6 percent this year, driven by consumer spending and fixed investments, the statistics office said Nov. 24. The island’s output will expand 2.4 percent in 2012, it said.

The Independent UK also has a recent article, Iceland: The broken economy that got out of jail that succinctly covers the crash and recovery.

Iceland was a pioneer in recklessness during the credit boom. And now the small nation in the north Atlantic is a pioneer in political accountability during the credit bust. Geir Haarde, the Icelandic prime minister between 2006 and 2009, appeared in a special constitutional court in Reykjavik yesterday on charges of "failures of ministerial responsibility" during the 2008 financial meltdown. But there is an irony here. For the economy that Mr Haarde helped to wreck has fared surprisingly well since the bust..../snip

Reykjavik was warned that it would never borrow again if it failed to honour the debts of its financial sector. But the country already seems to have been forgiven by the markets. The Icelandic government issued $1bn in sovereign debt in June at an interest rate of around 6 per cent. This was twice oversubscribed by investors. The contrast with Ireland, which assumed responsibility for all the liabilities of its bust banking sector, is stark. Thanks to Dublin's blanket bailout, total government debt is now more than 100 per cent of GDP, four times pre-crisis levels......./snip

Geir Haarde heads a cast of hundreds who could face prosecution for their part in Iceland's financial implosion.

Iceland's special prosecutor, Olaf Hauksson, has named more than 200 suspects in his criminal investigation into the country's financial crisis.

So far, those convicted in connection with the country's big banks – Landsbanki, Kaupthing and Glitnir – include former Kaupthing brokers who got six months in jail for manipulating bond deals and Baldur Gudlaugsson, a former permanent secretary at the finance ministry, who received two years for insider trading of Landsbanki shares. Haukur Thor Haraldsson, a former managing director with Landsbanki, was sentenced to two years in July for embezzlement.

Yesterday I heard an interview, on Sunday Edition on CBC Radio One, with "the man almost solely responsible for this remarkable turnaround....the country's president Olafur Grimmson" which should be available online here soon. (the audio or podcast didn't seem to be available yet this morning, perhaps one could e-mail the CBC and inquire why)

One interesting point that Mr. Grimmson raised was the way the post pretend financial services obsessed Iceland economy made better use of the skills of Icelanders. He explained that when Iceland went on its orgy of play money investment schemes, the financial sector not only utilized the natural born crimnals (MBAs and accountants), but programmers, engineers, mathematicians and so forth. Now with the return to actual productive economic activity, these skilled people are available for jobs that actually produce marketable software or conduct research or heaven forbid even produce infrastructure for transportation, energy or mineral extraction.

It's amusing to notice how little notice is given to Iceland's contrary response to the crime spree of the finanacial sector, especially here in North America, but then here the criminals are still in charge and not only running the show, but the media, the government and basically the agenda.

Though thanks to the boneheadedness of Ben Meisner, I struck my former link to Opinion250:

In August of 2011, Peter Ewart and Dawn Hemingway, columnists for Opinion250, visited Iceland. During their trip, they toured Reykjavik and other parts of this beautiful country, and interviewed a number of political figures and community activists about the financial crisis that recently gripped the nation. The following series of articles, which will be published over the next few days, are their impressions of this experience. The first several articles will provide some background on Iceland and its people, and are aimed at “setting the stage” for the articles that follow on the financial crisis.

The first segment can be found here, and then they each link to the next.






Watching the River Flow
in Iceland