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People of Iceland Versus Global Economic Policymakers

Sheldon Filger, Huffington Post

Writer, founder of GlobalEconomicCrisis.com

Posted: January 5, 2010 04:18 PM

An extraordinary development is occurring in the tiny island nation of Iceland. The first sovereign casualty of the financial tsunami that occurred during the onset of the global economic crisis in 2008, Iceland underwent a fiscal meltdown and currency collapse when its 3 largest banks became insolvent. A neo-liberal government allowed Iceland’s financial industry to go global amid an environment of deregulation. The result was that Icelandic banks held more deposits from foreigners than from the nation’s citizens. When the global economy went into a nosedive, the three banks were rendered utterly insolvent, with liabilities exceeding the GDP of Iceland by a multiple of ten.

What is now occurring in Iceland is a foretaste of what may become more common throughout the developed world. Taxpayers have been told by policymakers that they must bear the financial costs of failed decisions made by private business, no matter how steep the price, or accept even more horrendous economic consequences. For the first time, an aroused public in at least one country has rejected the dictates being imposed by the political establishment. No wonder that the Dutch and British governments reacted so swiftly with a condemnation of Iceland’s citizens for having the audacity to think they have the right to exercise their democratic rights in deciding for themselves what is in the best economic interests of their nation.

As the global economic crisis continues, leading to more private business failures and demands by policymakers that taxpayers fund ever-larger bailouts, look for other aroused citizenry following in the footsteps of Iceland’s.


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  1. As you can see I don’t think this as bad an idea as Chris in Paris @ Americablog (h/t).

    But I’ve carried this shield a long way and the axe is sharp enough.

  2. Iceland has a long history of real (direct) democracy – oldest democracy in the world IIRC.

    They’re risking the EU, and potential EU bailout,  with this move, but look how being in the EU has screwed some smaller countries–Greece and Spain for instance.  

    Despite the climate, Iceland would be on my short list of places to live, if I could go there, and I think they’ll eventually be fine.

    • Xanthe on January 6, 2010 at 16:59

    It had to be done for the sake of the nation

    It’s necessary for our nation to survive

    When the people play hardball

    hrumph hrumph – the sky is falling – the sky is falling

    How would Amricans vote – do you think?  

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