From Iceland — Money Never Trickles Anywhere But Up: Seven Years in Iceland

Money Never Trickles Anywhere But Up: Seven Years in Iceland

Published October 27, 2015

Money Never Trickles Anywhere But Up: Seven Years in Iceland

Iceland has changed a lot since I moved here just over seven years ago. The scary part is what has stayed the same.

I moved to Iceland from the U.S. just over seven years ago, in late August of 2008. George Bush was in charge, and we hadn’t yet elected Obama. My wide-eyed liberal West Coast early 20-something spirit turned Scandinavia-ward, and when I learned that my last U.S. tax return was enough to cover an entire graduate school here, there was no looking back.

Seven years is a long time. I draw some comfort from the thought that I have lasted here longer than Brad Pitt in Tibet. A lot can change in seven years, both in your personal life, and in the life of a nation. I find it helpful to take a periodic look back on what has changed and what remains the same.

The Day Iceland Shattered

Amidst the shocking, thrilling process of adjusting to a new country, seven years ago a very strange thing happened. The Prime Minister of my new home country came on TV one evening and delivered a sombre message to the nation, in what to me sounded like Elvish. The only words I caught were at the very end, “Guð blessi Ísland.” When I asked my friends what he was talking about, the only response I heard was, “I don’t know.” “Well, just tell me the words he was using.” “I don’t know those words. I have never heard them before.”

The following weeks and months were littered with confusion and rage. As the details of the global financial crisis were slowly illuminated and its repercussions unfolded, Iceland’s bleak position became clear to the population, and the scent of revolution wafting from Austurvöllur was overpowering. Then the Icelandic króna fell off a cliff. At the beginning of 2008, one US dollar was worth around 60-65 ISK. In early December of 2008, (my first Christmas in Iceland) the one USD went for 148 ISK. The nation was staggering into a mystifying economic fog, and nobody new which way to turn, or what the future had in store, or who stole their money.

“Should we send army blankets?”

News of Iceland’s desperation spread quickly in the international media. My grandmother asked if I was able to get money out of the ATMs, and assured me that all would be okay, because at least my parents have land if things were to get really bad. I think she was envisioning a back-to-the-land survivalist scenario, and started stocking up on canned food and water. Icelandic credit cards quickly stopped working abroad, and accessing foreign currency was no longer an option.

As I had only been in the country for a few months, I didn’t understand the language at all and had no idea about the politics here. A great deal of my memory of this time is through the filter of Icelandic friends and through foreign media reports on Iceland. Names flew through the air and fell upon my ears without any association. Davíð Oddsson? Geir Haarde? Who are they again? What did they do? What is that adorable French lady with the glasses doing here and why is she so angry? I was a fresh mind thrown into the deepest part of a nasty political and economic quagmire.

Picking up the pieces

My suitcases were barely unpacked when the protests began. I didn’t have any reason to be angry. I had not lost any money in the crash, my mortgage or car loan hadn’t doubled overnight, and I didn’t have any pension to lose. Chalk it up to the plus side of a poor college student, maybe, but even if I didn’t suffer like other people, I did learn a lot from watching. I went to the protests and tried to understand why people were so upset. I was so fresh to this place, I thought maybe people here were just really good at protesting.

Alongside everyone else who was putting together the pieces of the global economic crisis and the great recession, I began putting together a picture of Iceland, not just of the economic woes, but the country itself. What emerged in my mind was a rich tapestry of cronyism and bad decisions by greedy people who were likely psychopaths, or at the very least, unforgivably ignorant of the risks they were taking with other people’s money. And conversely, a populace united by their collective anger at getting fucked over by cowboy bankers.

A Phoenix Of Hope rises from the Austurvöllur ashes

A raging fire can decimate an old forgotten forest, making way for new growth and a more resilient ecosystem. In the wake of the crisis, after Iceland had set aside the pots and pans and the park bench bonfires had calmed to ash outside parliament, things started to look brighter for the country.

There was an inspirational and hopeful feeling in Iceland, centred on the shame of excess wealth. Blatant extravagance was taunted as being “so very 2007.” For instance, if your friend decided to buy all new furniture for her living room because she was tired of looking at her old couch, you might have said, “Whoa. That’s pretty 2007 of you, don’t you think?!” The old government was gone. The banks were demonized and legal actions against them commenced. Kaupthing turned into Arion bank, Glitnir became Íslandsbanki. We wrote a new constitution (didn’t we? What happened to that whole thing?). Modesty trumped hubris. I remember telling myself that if my great grandmother could survive the Great Depression, I would definitely learn to make do with less. People started knitting and clothes-swapping. We were going to build a stronger economy with regular folks at the centre. The crisis was embarrassing to proud Icelanders, and a realigning of What Really Matters in life was at the forefront of national dialogue.

A series of unfortunate events

In the spring of 2013, promises of wealth and prosperity led the Icelandic nation to re-elect the political parties who were in charge before the crash. These leaders of the right-wing Independence and Progressive parties did not directly cause the economic woes of the nation, but they were at the very least complicit in economic crimes. It puzzles me still that they were able convince enough people to trust them. It doesn’t square with the picture of Iceland I shaped while elbow to elbow with people carrying signs that said “HELVÍTIS FOKKING FOKK!” in the heat of 2008.

Ironically (and maybe somewhat appropriately) the former Independence Party leader, Geir Haarde, the deer-in-the-headlights-God-Bless-Iceland fellow, was recently made Iceland’s US Ambassador. Another former party leader, Davið Oddsson, who was named as one of Time Magazine’s “25 people to blame for the financial crisis” took over one of the two major newspapers of the country… which would be a bit like George Bush taking over the New York Times. If George Bush was smarter and more maniacal. And if the New York Times was funded and published by an interest group. Somehow, these brilliant politicians broke Iceland’s economy and then managed to convince enough people to trust them and were put into positions of enormous power and influence. It conjures an image in my mind of an abuser convincing his victim he will never do it again.

Many things have changed in the seven years I have lived here. We go see concerts in Harpa instead of Háskólabíó. There is finally excellent beer and amazing food. The harbour is all shiny, and Grandi gentrified from industrial dump to hipster paradise. In large part because of the weak currency, tourism has exploded and just overtook fishing as Iceland’s biggest revenue generator. We are building again. The “crane count” from my downtown Reykjavik office window last week was eight. There is apprehension among people who remember that we are heading into another bubble economy. The “moral pollution” of 2007 is creeping its way back into the nation.

Iceland is a land in between. It is being torn apart physically by North American and European tectonic plates, just as it is torn between the capitalist casino banking of America and the more modest democratic socialism of Europe. This week, we got news that two of the three largest banks are now nationalized. Like a bad acid trip the sends you flashbacks years later when you feel your bones pop, the financial crisis still rears its ugly head every now and then. We slowly start to think that maybe jailing a few bankers and changing the names of the banks was treating cancer with a band aide.

Having arrived here at the exact moment the crash happened, I can see clear similarities between the national rhetoric now and seven years ago. The 2007 party has begun already for a few select rich and powerful people. They clink champagne glasses against a backdrop of worker strikes, a suffering middle class, and a crumbling healthcare system on the brink of privatization.

My dear beloved Iceland, I hope that seven years from now, in 2022, I am not referencing this piece with a finger wag and motherly, “I told you so.”

Step back. Look around you. Don’t buy into false promises. Be sceptical of the beautiful words of men in nice suits.

Money never trickles anywhere but up.

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Enough. Stop. Now.

Enough. Stop. Now.


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