The people of Iceland have spoken to the banksters, and loudly, rejecting the IceSave referendum with 93% voting no.
Voters rejected the bill because "ordinary people, farmers and fishermen, taxpayers, doctors, nurses, teachers, are being asked to shoulder through their taxes a burden that was created by irresponsible greedy bankers," said President Olafur R. Grimsson, whose rejection of the bill resulted in the plebiscite, in a Bloomberg Television interview on March 5.
The referendum came about because of efforts to resolve the fallout of Iceland's spectacular Landbanki Islands bank collapse, which decimated the deposits of UK and Netherlands citizens who'd deposited money there seeking higher yields. Iceland's version of the FDIC, unsurprisingly, was not sufficiently funded to cover the losses. The UK and Dutch governments stepped in and bailed out their depositors, and then set about trying to recover the money from Iceland.
The battle, as it were, has been about how much the people of Iceland should pay for the sins of the banksters based there. While there are about 1,000 Americans for every Icelander, there are parallels between the US taxpayer liability for the likes of AIG and Goldman Sachs and the Iceland taxpayer liability for the likes of Landsbanki.
The bill would have obliged the island to take on $5.3 billion, or 45 percent of last year’s economic output, in loans from the U.K. and the Netherlands to compensate the two countries for depositor losses stemming from the collapse of Landsbanki Islands hf more than a year ago.
The underlying issue, as in all the bank bailouts, is what level of burden the public should bear for the reckless predatory actions of private banks. The people of Iceland clearly think they're being asked to socialize too much of the losses, and have regular protests involving approximately 2,000 people (this, in a country of 320,000, is comparable to 2,000,000 Americans protesting TARP).
Protesters have gathered every week, with regular numbers swelling to about 2,000, according to police estimates. The last time the island saw demonstrations on a similar scale was before the government of former Prime Minister Geir Haarde was toppled.
Icelanders have thrown red paint over house facades and cars of key employees at the failed banks, Kaupthing Bank hf, Landsbanki and Glitnir Bank hf, to vent their anger.
Unlike the rest of the world, where pliant paid-for politicians have meekly surrendered the public purse to the demands of the banksters, the President of Iceland rejected parliament's capitulation and gave the people of Iceland a chance to make a direct decision.
The fact that a quarter of Iceland's electorate petitioned to reject the bill undoubtedly helped stiffen their President's resolve...
There has been a great deal of pressure on the government of Iceland, including the use of anti-terrorism law by the UK against Iceland early in the crisis. There are some serious questions here about government responsibilities across borders.
So Iceland cannot escape some share of political responsibility for the Icesave fiasco.
But Iceland was far from alone in this negligence. The political establishments of Britain and the Netherlands -- indeed, those of the European Union and EEA as a whole -- encouraged financial deregulation and a more extensive Single Market in financial services, without almost any regard for the wholly predictable risks of large-scale economic failure.
What is interesting - or depressing - in all this, is that the governments of the UK and Netherlands chose not to go after powerful banks, but after powerless public citizens of a very small country. Ultimately, nations that want true sovereignty are going to have to decide whether to resist the banksters or to exercise their national power against other, less powerful, nations.
Regardless of how this turns out, it is fascinating that the people of a small country like Iceland are standing up to their political elites and massive international pressure in refusing to simply accept a huge public debt load while the political and banking elite who brought about the meltdown suffer no consequences.
Two things in Iceland's favor is that is has the capability to feed itself (fishing) and provide itself energy (geothermal and hydro power). These are important considerations in today's world.
A parallel development, during this period, has been Iceland's effort to become a haven for investigative journalism, launching the Iceland Modern Media Initiative. Given that the intellectual capture, control and alignment of political, financial and media elites in the US has distorted the development of the banking system into a predatory one, and their near-total control over the public debate, this may be a critical action.
Imagine if America were like Iceland. Imagine if we still lived in a nation of laws, where massive dishonesty led to jail, instead of 100% CDS counter party payoffs on the public dime.
Are we all Icelanders now?
Some places to look, if you're curious about this:
Update: There is a new post on this story at Jesse's Cafe Americain.