Published July 22, 2011
After the publication of the SIC report, there was a near unanimous agreement in Icelandic society that it was not only an important analysis of the economic collapse’s causes, but also a settling of the books if you will—a critical attempt to tally up the mistakes that were made in the lead-up to the crash of 2008 and, as such, an important step toward national reconciliation.
Everyone realised that this would mean that some people in power would be cast in a less than sympathetic light, and that many would be uncovered as incompetent and greedy, even criminally incompetent and greedy.
The report was universally celebrated as simply the best example of an official report ever prepared in Iceland. It had exceeded the expectations of most people. It even received very favourable press abroad, where it was hailed as a landmark attempt to uncover the roots of the global financial crisis of 2008.
That was then. This is now.
Enter the backlash
As Snorri Páll Úlfhildarson Jónsson—one of the Reykjavík 9—discussed in his Grapevine op entitled ‘The Reykjavik One’, the supporters of Geir H. Haarde, the former Prime Minister who presided over the largest financial collapse in modern history, whine about a political witch hunt. And Geir seems to fancy himself as ‘the saviour of Iceland.’ In an interview with AFP he claimed to have somehow saved Iceland from an even larger catastrophe—had it not been for his steady hand at the wheel, we would have experienced ‘a real catastrophe’! The SIC report, meanwhile, concluded that Geir had failed to act in a timely and appropriate manner in the face of the crisis.
At a meeting of his supporters, Ministry of Economic Affairs chief of staff (and long-time Social Democrat functionary) Kristrún Heimisdóttir delivered a speech in which she spoke about how the SIC report had in many cases gotten the facts wrong, and had made wrongful accusations. She did not name any specifics. No, she simply stated that this was some general feature of the report.
The most forceful pushback against the SIC report has come from Lýður Guðmundsson, former executive chairman of Exista, one of the largest investment companies of pre-crash Iceland. Lýður has mounted a one man media campaign against the report, attacking not only the SIC report but the entire attempt to come to terms with the crash, learn from it and identifying its causes and those responsible. According to Lýður Icelanders should “be ashamed of themselves.”
And why? Well, Lýður argues that because no executives at U.S. investment banks have been prosecuted, it is somehow shameful that their Icelandic colleagues are! Basically, his argument is that because those guys got away with crashing the world economy with their irresponsibility, greed and questionable—if not illegal actions—we should get away with the same. Since U.S. authorities and regulators are in the pocket of Wall Street and failed to mount any serious investigations of its practices, it is a heinous crime that such investigations be conducted in Iceland.
Seriously. That is his argument.
Some honest mistakes
Oh, yes, also that his companies were all fabulously well run, that he and all his underlings did a heck of a job. He does admit to having made mistakes, but they were all honest mistakes—and it is certainly not due to them that everything came crashing down. Anyone who says otherwise is engaged in a witch-hunt.
But did we really expect that these delusional elites would face up to their mistakes? Did anyone believe that people who actually imagined that Iceland was on its way to become a global financial centre (rivalling Luxembourg)—people who thought that you could build a viable economy on leveraged buyouts and an asset bubble or that it was sound economic policy to turn a national economy into a hedge fund—that such people would face up to their mistakes?
The fact is, the SIC report is historically unique—as an official report it is up there with the findings of the Pecora investigation following the 1929 Wall Street Crash as a unique attempt to uncover the causes of a financial crash. And the Icelandic attempt to come to terms with the causes of the crash, and to force those responsible to face justice, even if it is very incomplete and far from satisfactory, is still far more robust than anything we have seen in most other countries. When compared to the US, the Icelandic effort looks pretty aggressive. And none of this would be possible if it was not for the SIC report.
By attacking the SIC report Lýður and the supporters of Geir H. Haarde are actively attempting to undermine these efforts.