From Iceland — Well Here’s Another Fine Mess You’ve Gotten Us Into

Well Here’s Another Fine Mess You’ve Gotten Us Into

Published March 12, 2012

Well Here’s Another Fine Mess You’ve Gotten Us Into

Here’s what international journalists—the same ones who’ve previously slagged us off numerous times—are presently saying:

• In Iceland, the voice of the people has won
• In Iceland, true democracy and equality is at work
• Iceland is a once-vibrant economy which has returned—fist-swinging—from the living-dead
• Iceland is ‘now’ governed by a sensible, strong, determined leadership that considers the interests of its people above all else
• Iceland has dug itself out of the crisis without playing by the rules
• Iceland has stamped out corporate greed, nepotism and cronyism

Oh, and let’s not forget:

• Iceland is still one of the happiest countries on this fine planet…

In February, there has been a deluge of reporting covering Iceland’s so-called reinstatement into the global monetary community, its upgraded credit ratings, and unorthodox methods to tackle the debt crisis. It’s almost as if those financial journalists have no other up-to-date source material to call upon. Even that Chinese lion is starting to lose its economic-media momentum. (The World Bank recently suggested that the Chinese economy is significantly slowing down.)
Or perhaps someone’s just trying to ramp up the heat on Greece? On March 1, commodities website,, stated: “If Greek politicians were really acting in the best interests of the Greek people, they would have taken the same path chosen by Iceland’s leaders—default.” Bleak indeed. Bleaker still: “There is no hope for Greece to repay its debts by meeting the draconian burden imposed on it. But the banks want their money back, even if it means keeping Greece in debtor’s prison.” CNN paints a similar picture of our Hellenic cousins: “Greece…will be lucky if it reaches its target by 2020 in accordance with the terms of its second bailout.”
Here’s Iceland, in February and early March as the widely extolled paragon of virtue and diligence:

• BBC: “Iceland debt ‘safe’ to invest after ratings upgrade”
• CNN: “…three years on, Iceland is poised to re-emerge from economic purgatory…”
• Daily Telegraph: “Iceland’s Viking Victory” calls for hearty “congratulations…”
• “…maybe…there’s something we can learn from those happy [-go-lucky] Vikings…”
• MarketWatch: “Iceland’s debt comes in from the cold”
• RT (Russian News Channel): “Iceland shows eurozone how to fight crisis”
• Business Insider: Iceland’s banks “have forgiven 13 percent of the country’s debts…” easing the burden “…for more than 25 percent of the country’s population…”
• Bloomberg: Quoting Danish banker, Lars Christensen: “…Iceland holds the world record in household debt relief…”
• Bloomberg again: “Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of its markets every time.”
• (a Canadian online magazine): “Iceland is a great example of people who stood up and fought for civility.”
• again: “Even the IMF is holding up Iceland as an example of how to overcome deep economic dislocation without undoing the social fabric.”
• MoneyWeek (a UK investment website): “The Lessons Learned from Iceland’s Economy: Let Banks Go Bust”

It goes on, but you get the idea, right?
But here’s my very favourite quote of the past month…and the prize goes to the Russian news channel, RT. Get a whiff of this—a quote from Russian investment banker, Tamerlan Khassimikov: Apparently it was not only effective crisis management that helped Iceland to stay afloat, but according to Khassimikov, “Iceland is a disciplined country, it’s used not to spend more than it has.”
So tell me, folks: How did we get into this mess in the first place?
Khassimikov concludes that the crisis occurred “because Iceland’s banks are a part of global banking. As for Greece, it became the victim of its own careless approach to finance.”
Where did this guy get his master’s degree?
Honestly speaking, only Macleans, the Canadian current affairs magazine, seemed to be talking with any measure of balance this month.
Though here too, in Chris Sorensen’s article, “Iceland: a new model for dealing with collapse?” someone has been a victim of misconstruction.
For example, Soerensen says “[Ólafur Ragnar] Grímsson stepped in—not once, but twice—so that the [Icesave] deal [struck by Icelandic parliament] could be put to a referendum.”
Now, I am sure some folks would disagree that he—er, just stepped in. Just as no one quite knows whether he’s about to just step out. Sensibly, however, Sorensen also interviews Ragnar Arnason, an economics professor at the University of Iceland. “[Arnason] argues that many foreign observers have conveniently ignored key details when they marvel at Iceland’s recovery.” As Arnason notes among other things, capital controls now threaten Iceland’s key industries, preventing “export industries from developing.” And yes, that’s just the tip of the proverbial iceberg.
Do any of these guys read between the lines? For Odin’s sake, would someone please set the record straight?  

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