Sink Or Swim, The E.U. Can't Help. Iceland, However...

[markbark]

From The Daily Feltoon

In case you missed it, the story going on in Iceland really began in the early 2000s, when Iceland followed the lead of countries like the U.S., loosened its regulation of banks, and allowed investment and deposit banks to mingle with each other and other banks around the world. In 2008, when the market implosion of Wall Street spread like a virus around the world, the three major private banks in Iceland all collapsed under the weight of the bets they'd made (a large portion of which was in the U.S. real estate market), and had to be nationalized.

As Dr. Krugman also recently pointed out, nearly everyone projected that Iceland was going to go into economic Armageddon if they didn't follow the lead of everyone else - save the banks, screw the working people, and make the public pay the price.

Iceland, however, did exactly the opposite.

Over the weekend, Iceland announced that they were finally going to begin paying out a small portion of foreign depositor claims, after their highest court upheld a law that protects the common people and the public welfare. Further, Iceland's Economy Minister said that all legitimate depositors, whether in Iceland or from other nations, will be repaid their full amounts of deposit. Investment bankers, however - like the Wall Street gamblers and their corporate cronies - will have to deal with the pile of bad bets they made all by themselves.


See Whole Article Here

[dipsydoodle]

1. Last sentence in article

"We think it's high time the U.S. tried a similar strategy"

All of the banks should have been made to unwind all transactions which caused the mess and all bonuses repaid. Only then would it have become clear how each of the banks stood and allowed to sink as necessary - not bailed out.

On the main topic - its not exactly a bed of roses in Iceland. They've got high unemployment and even that is suppressed by those not registering - returning to college for further education instead. They cannot join the EU until the foreign depositor claims are sorted to an acceptable level - the UK and Holland would veto the application. The tax payers of those countries would expect that due the adverse effect it had on local council and pension funds too. In the meanwhile they've also got high inflation due the continued poor exchange rate between their own currency and the Euro.

[fasttense]

2. It's NOT a bed of roses in Iceland.

They did, after all, go through the 2nd RepubliCON Great Depression, just like the rest of us.

But inequality is NOT Rising like it is in America.

Fat, thieving, criminal banksters are not rolling in their ill-gotten wealth like sharks in chum, like they do here in the US.

Stay strong Iceland, you may end up being the last remaining democracy on earth.