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View Diary: Bleed, you sinners! (128 comments)

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  •  Because that's not what happened. (0+ / 0-)

    Iceland didn't default.  And the crisis had nothing to do with the "investor class" (the Icesave dispute was mainly about overseas retirement accounts).  Iceland had no national debt crisis before this conflict.  The "investor class" (including the IMF) played a critical role in getting the loans needed to restructure their banks after the crisis hit.  And on and on.  Basically, everything most people think they know about the kreppa is completely inaccurate.  Please spent some time reading about what actually happened.

    •  I googled "Iceland default" (0+ / 0-)

      I got 4,400,000 results. Here is the first result:

      I'd be happy to see any other sources you'd suggest.

      •  Read the second paragraph (1+ / 0-)
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        The part in bold:

        Instead of bailing out its banks using taxpayer funds like the United States did, Iceland let its bank default.

        Seriously, reading comprehension, people.  When they bold the part that you're missing and you still miss it... that says something.  They had banks default.  Iceland itself did not default.  Iceland did not have much debt.  They just had some runaway private banks that dragged the country down with them.

        And yes, lots of people like you are spreading bad information about Iceland.  Which is why it's so much work to correct it.  Heck, even that article is wrong; they wrote "let its bank default".  There were multiple banks that went down, and none of them were government-owned (as implied by "its bank").  They were all privately owned -- Landsbanki, Glitnir, Kaupþing, etc.  I think there's some confusion on this front because Landsbanki/Landsbankinn literally means "The Nation's Bank".  But that's just a name, like "Bank of America".

        Here's a good article from The Reykjavík Grapevine about the misconceptions.  Heck, even Wikipedia gets it right.

        •  Your block quote (0+ / 0-)

          (with bank(s) instead) is the whole point, right? We bailed out our private banks but they didn't. Didn't they even hold a plebiscite with 90 some % voting not to? Iceland seems to be recovering while countries like Ireland and Greece keep spiraling down. Conflating private bank debt with the country as a whole is what the PTB want us to do. Let them fail.

          I don't see how we're in disagreement.

          •  Also wrong. (0+ / 0-)

            First off, back to the frame of reference: this article is arguing about how Greece shouldn't default.  Greece has a national debt problem, not a banking crisis.  Also, it's on the Euro, it's in the EU, and a whole bunch of other things that make it totally non-analogous with Iceland.

            Furthermore, even if we want to be comparing it to the US.  You write:

            "We bailed out our private banks but they didn't."

            Yes, they did.  As much as they were able.  They refused to cover the debt obligations to foreign citizens (the bank obligations were so big that there's no way they could have), but they bailed out their domestic citizens.  The country invested nearly a year's worth of GDP, going from one of the lowest debt countries in Europe to one of the highest (per-capita).    Unlike Greece, of course, this debt isn't the result of a systemic problem, but of a one-time series of really big loans in order to buy up the assets of their failed banks and guide them through restructuring.  Yes, Iceland took foreign loans, IMF loans, etc.  

            As for the banksters... well, check out how, say, Björgólfur Þór is doing these days.  Not only is he still free, and wealthy, he even still has a diplomatic passport.

            Once again you compare Iceland to Ireland and Greece, which is once again a ridiculous comparison, because Iceland Did Not Have A National Debt Problem.  Iceland acquired national debt to resolve a banking crisis.  Greece and Iceland are turning to bankers to resolve a national debt crisis.  Iceland's problem was truly unique globally because how vastly larger their banking obligations were compared to their economy.

            No, "90 some % voting no" to bailing out the banks did not happen.  Did you even read the article I linked?  As previously mentioned, the government did buy up the banks' assets.  But by refusing to insure the accounts (which, by the way, were mostly people's retirement accounts) for British and Dutch citizens, the British and Dutch filed suit against Iceland in the EFTA.  It was a legal squabble; their argument was that Iceland had claimed they would insure the accounts against default, while Iceland claimed they had never done so.  Britain in particular was really provocative, seizing Icelandic assets with an anti-terrorism law.  The votes that were held were over whether to settle this squabble out of court.  There were two votes over different repayment plans.  The first was really grossly unfair terms, and it was rejected by about 90%.  The second was much more reasonable; it initially looked like it was going to pass, but ultimately failed, with just under 60% voting no.   BTW, it was their new, leftist government who was pursuing this repayment plan.  The repayment plan rejected, the situation was pushed back into the ball of the EFTA court system.  The latest twist is that with the slow restoring of order to the Icelandic banking system, the banks which the government bought up now seem to be worth enough to pay off their overseas debt obligations.  But Britain and the Netherlands are still filing suit to recover damages for the delay in repayment.

            Let's reiterate the key points here:

             * Iceland did NOT default, like people are wanting Greece to do.
             * Iceland had a unique banking crisis which was not and cannot be applied to anywhere else in the world, due to the size of their banking sector compared to the size of their economy.
             * Iceland is neither on the euro or in the EU, and is not major world economy.
             * Iceland's banks were private, and the funds under threat were largely individual retirement accounts ("Icesave"), not investments of monied interests.
             * Iceland's government did bail out their domestic accounts, just not the international accounts.
             * Iceland's government did buy up the banks during receivership.
             * Iceland now has significant debt because of all the loans it took (including from the IMF) to do this.
             * Iceland has instituted austerity measures, and salaries were effectively halved by the deliberate collapse in currency.
             * Most of the bank officials involved are still walking free.
             * The main dispute Iceland has been involved in is an international legal battle, involving provocative actions by old rivals, about whether or not Iceland ever claimed to ensure the accounts.
             * The referendums had nothing to do with buying up the banks, but trying to end the international squabble by partially compensating them over a period of time for the losses of the Icelandic banks.
             * It was their new, celebrated liberal government who did most of the pursuit of this deal.
             * The battle is not over.

            People here have this fake image in their mind of what happened with Iceland.  If you need an analogy for what you want Greece to do, pick something that's actually analogous and describe it in a way that concerns things which actually happened.  Leave Iceland out of it.

          •  I'll add... (1+ / 0-)
            Recommended by:

            that I apologize for how I may come across in this discussion.  But after the 8.000th time of having to correct misinformation, well, it gets rather frustrating.  Please just agree to not spread misinformation, to correct it where you see it being spread, and leave it at that.  I'm probably more sensitive than usual because it's my new country that people are spreading misinformation about.  It's weird, to actually feel patriotic about something.

            •  Many of the points (0+ / 0-)

              you're making, I didn't disagree with in my short comments, maybe others are. I don't think the distinction you make about the national debt problem and the banking crisis is all that different. The players are the same. The only difference is who gets to be the victim. The Greeks are refusing to play the role. The Argentinians have prospered since they quit playing too.

              It seems you are well informed on this but the issue has been framed (maybe incorrectly) in a shorthand way- Iceland let the foreign investors fail to the benefit of it's own citizens. I think the main source that formed my opinion was a piece (I can't remember from where) about the modest guy they put in charge of the investigation who rose to the occasion. Maybe not as successfully as the article implied.

              Misinformation is never good, of course, but Iceland has come out looking good. I am disappointed in my fellow citizens. I am always looking elsewhere, hoping that it's different there. The people of Iceland seemed to handle the crisis well. At least that's the impression I got.

              I remember you now, you did that beautiful photo diary. And right, you're moving there. It made me want to go too.

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