Everybody in Iceland is Dead!!!
Everybody in Iceland is DEAD!!! Oh wait, I might be mistaken. It is just that you haven’t heard too much about Iceland lately. Outside of the volcano thing. I wonder how come it is that there is very little Iceland news???
Hmmm. Maybe it is that some people are hiding Iceland because Iceland did something everybody else hasn’t done. Iceland told its banks to “drop dead” and they weren’t going to bail them out!!! And Iceland DIDN’T die.
The Icelandic Post-crisis Miracle
Iceland is, of course, one of the great economic disaster stories of all time. An economy that produced a decent standard of living for its people was in effect hijacked by a combination of free-market ideology and crony capitalism; one of the papers (pdf) at the conference I just attended in Luxembourg shows that the benefits of the financial bubble went overwhelmingly to a small minority at the top of the income distribution:
And in the process of building short-lived financial empires, a handful of operators built up enormous debts that their fellow citizens are now expected to repay.
But there’s an odd coda to the story. Unlike other disaster economies around the European periphery – economies that are trying to rehabilitate themselves through austerity and deflation — Iceland built up so much debt and found itself in such dire straits that orthodoxy was out of the question. Instead, Iceland devalued its currency massively and imposed capital controls.
And a strange thing has happened: although Iceland is generally considered to have experienced the worst financial crisis in history, its punishment has actually been substantially less than that of other nations.
Here is the full story with charts and graphs and stuff:
But what I wonder is why we aren’t hearing more about this??? About how you really don’t have to sacrifice everything for the super rich people???
UPDATE!!! In April 2011, Icelanders re-affirmed their NICHT!!! Vote!!!