Iceland – An Unlikely Example To Us All


The Icelandic government have done it again. When I use that phrase, usually what follows is maddening stuff. For once, that is not the case. Why, you ask? Because, in a rare show of correctitude, banksters have been jailed. Surely not!

It may seem an impossible outcome in the EU or the USA (or almost anywhere else in the world for that matter), but in Iceland they jump eeeen it. This is not the first time, nor is it likely to be the last, as Iceland seeks to find the best route out of the ongoing financial crisis. Apparently, they’re doing a pretty damn good job of it, too. Iceland now has one of the fastest growing economies in the developed world.

The four executives of Iceland’s largest bank have been sentenced to a total of 17 years behind bars for their part in a variety of crimes relating to fraudulent share sales in the prelude to the meltdown of 2007/8. In essence, fraudulent loans were made to a Qatari businessman which were used to buy shares in the bank in order to prop up it’s share price, with the loans being backed by the very shares they were being used to buy.

Fat Cats, anyone?

Fat Cats, anyone?

The numbers jailed in the tiny nation are up in the double digits, for crimes ranging from insider trading to market manipulation – and these are not just low down fall-guys either. Bank presidents’, a politician and the CEO of Kaupthing (the largest of Iceland’s privately-owned banks) have all been jailed for up to five and a half years. Are you shitting me? The only way that would happen in the UK or US would be if the bankers had stolen from other rich folks (Bernie Madoff, I’m looking at you).

But it hasn’t always been that way. During the Savings & Loans crisis in the 1980’s, the US jailed more than 800 bankers. You read that correctly – 800. Jailed. But as the establishment became more and more convinced of the Friedman and Randian view of enlightened self interest (there’s an oxymoron for you), willingness to hold bankers to account faded rapidly. Even the response to the crisis demonstrated that western governments just couldn’t face the reality that their economic ideology had been thoroughly discredited. Giant bailout packages were the order of the day (hardly the non-interventionist ideal of Hayek’s free-market concept). In contrast to the rest of the West, Iceland chose to use it’s bailout package not to save the rotten banking system, but to protect the real victims of the collapse – the Icelandic residents themselves. This may be in large part due to the fact that the Icelandic banking system was so insanely bloated that the island nation simply couldn’t acquire a loan big enough to save them.

Pigs? Or both, you decide...

Pigs? Or both, you decide…

Whilst I’m sure that the situation was highly nuanced, and I am certainly no economist, it seems to me to be Economics 101 that if consumers have no money, then they can’t spend money. If consumers cannot spend cash, then we have an unavoidable problem in the supply-demand cycle. So why, in the name of Fuck, didn’t our governments protect us? You’d be unsurprised to learn that the reason is actually very simple – they simply don’t give a shit about consumers. So in thrall have politicians become of corporate financiers, that the first and only thing to cross their tiny little blinkered excuses-for-brains was, “Crap! My buddies are in trouble… How can I help them?”.

Both the Democrats and the Republicans in the US and Labour, the LibDems and the Conservatives in the UK are intransigent still in their support for their current bastardised notion of the free market. How do we move forward? For now, I will leave that an open question, but suffice to say, it’s enough to make you want to smash shit up…

Just to clarify, don’t do that. Yet.

End, drunk (can you tell?). If it’s good enough for Hitchens, it’s good enough for me.


One thought on “Iceland – An Unlikely Example To Us All

  1. Pingback: Iceland’s Economy Recovery Model: Jail the Bankers (Video) | THE SCARECROW

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