Iceland’s crisis

The crisis hit Iceland hard, but most people are still standing tall and live their lives as usual. It’s mostly that impression I get when I talk with people on the street downtown here in Reykjavik. The banks have collapsed, so it’s hard to see what’s left. There is definitely a lot of rebuilding ahead. The bad thing however is that now the State will take care of the rebuilding part and the market will be put in a dark space in the closet. That is not a positive development for a small country that wants to maintain its newly gained high living standard. The risk that Iceland become more and more like the Faroe Islands (small, dependent, and poor) is increasingly impending …

There are a lot of market liberals who commented on the Icelandic crisis saying that much of it can be blamed on David Oddson, the former Prime Minister and now the President of the National Treasury. David Oddson was earlier hailed for his huge reformation work for Iceland where he liberalized the society and the economy. However, thing is that when he privatized the banking systems in 1991 he made it illegal for foreigners to own banks, and the ownership went instead to former politicians. This is of course a great foundation for an economic disaster, especially in a small country where the élite knows everyone and the power has close ties with the economic execs. The American example show somewhat of a likewise story.


About tegis

This blog belongs to Carl-Mikael A. Teglund - tegis. Swedish emigrant with a heart for languages, philosophy, history, and politics (classical liberalism in the European tradition). Go ahead and look, read, or listen. I'm sure you will find it interesting.
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7 Responses to Iceland’s crisis

  1. What would you consider to be an appropriate plan of action for Iceland from here? How does a country come back from a situation like that, without state intervention? (I’m not necessarily advocating state intervention, but am unaware of what the options are for this country)

  2. Elizabeth says:

    Is it a bad idea for politicians to own banks because they are fraudulant, or because they are politicians and don’t have a damn idea what the hell they are doing? I sure don’t want politicians owning the banks in the states!! ::Shudder:: But soon our government is about to!

  3. tegis says:

    It is a bad idea for politicians to own banks because they are not interested in what is beneficent in a long-term scenario but only interested in a 4/2 years of term of office- scenario. They are also much more interested in doing the “popular” thing, not the wise. Let me give you an example. I might say that I will give free chocolate to everyone named Elizabeth during my term of office. That might lead to that I get mighty popular (at least among those who are called Elizabeth) but it might not be wise in the long run due to that the economy will take a serious blow in the future because I used a lot of the fed. reserve for providing free chocolate to all the Elizabeths in the States. I might even be elected and re-elected for that sake, but I sort of push the problem ahead of me to the one who will replace me after I had my fun.
    When the economy goes boom I’m long gone.

    Another thing that is bad is that politicians cannot create – only redistribute. Only manufacturers and entrepreneurs can create. Politicians therefore see economy as a zero sum game, meanwhile for those competing on the market it is all about making the cake grow – not dividing it into equal shares.

    Politicians WERE basically owning banks in the States, or at least in practice. Check out the link I had here above on the American example …

  4. Elizabeth says:

    Great point. Personal interest. Might I add that anyone giving me chocolate wins :). Got my vote. I will use registration fraud as much as ACORN has to pursuade the public that you are reelected. It’s a worthy cause, for my own personal interest.

    I’m sorry, I’m not quite sure what I’m clicking on for the American example? Do I just click on the “America” link?

    By the way, thank you for your contribution to our site, you’ve brought up many points I agree with that I could have never stated more eloquently.

  5. tegis says:

    I meant this link .

    Ya, thanks. I love to debate and I learn a lot from you guys as well. I think it is important that we learn from each other over the big pond, so to speak :). I don’t know if I’m eloquent or not..:) but thanks heaps anyways :). All I know is that you probably get a pay check for doing this (am I right? 😉 ) and I just screw up my studies haha 🙂 I have a paper that is due till Monday and I’ve just started :S *sniff* 😦 but it is a drug for me to debate and learn 😉 I’m an addict 🙂

    I hope we can stay in touch even after election 08?

  6. Elizabeth says:

    Oh ya, I remember that article! Messed up. I don’t understand how people allow themselves to be fraudulant. I have such high principles for myself. There’s much I will just say no or yes too, regarding on how it effects my soul. If it gives me a bad feeling in my stomach before I go to bed, I will go against that feeling. I work on karma, and love. I wonder how these dirty politicians/ corporate folk can look themselves in the mirror if they know they have done wrong. And I have to state this as well… not all politicians are evil. The govenrment I do have my problems with, but it also does so much to protect me and see that I am safe. For that I give my gratitude.

    I have recieved a stipen for my work with PS. For a college student its grand, but I still hold a job as a florist and I am taking several classes- and I’m with you! I have tons of papers and tests coming up LOL!! makes me laugh, I face the same problem of juggling school, work, travel for PS and engaging in political discussion. I find myself currently to be warped by the election, but I won’t know what to do with myself when it is over.

    I hope we stay in touch! Tons of what I’ve learned about the US has been from outside the US, and outside sources. I submitted my school e-mail address above, you should shoot me an e-mail and then I can have yours as well. Good luck with your paper!

  7. koivis says:

    Greetings from Belgium,
    Crisis allso here, small fish dont eat big fish.
    Please visit my websites (blogs) on: and
    Thanks. You can also leave a message.

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