image: enzai.9-11.jp
Reform in Iceland’ Produces Surprising Success
The technique Iceland used is a basic route to economic recovery. If other countries use this technique one after another, bankers would be put into prison. I do hope Greece to do so.
According to the article, Icelanders still
have burden harder to bear and has kept on facing difficult challenges. I think
it is similar to the hardships under which Cuba has been forced to rely on
self-sufficient economy due to economic sanctions imposed on the country. With
the new financial system properly arranged, I think Iceland would gradually suffer
much less hardships.
Masatoshi
Takeshita
January
27, 2015
Excerpt from a Japanese article: Takisan’sHomepage – January 26, 2015 –
Reform
in Iceland’ Produces Surprising Success
Dating back to 2008, Iceland was stuck in economical
predicament. They did something abnormal; they threw
bankers in prison and eliminated derivatives. What’s the result? Today, Iceland has survived with its unemployment rate of less than
2 percent. Probably, Greece would succeed with
this policy and other countries would rush to follow suite.
Dear friends, this is the reason why the
cabal have wet adults’ diapers!
———-
Source:
Iceland’s
Stabilized Economy Is A Surprising Success Story
You may have
heard about Iceland’s toppling economy back in 2008. As one of the hardest-hit
countries at the time, Iceland’s heavily criticized method to escape veritable
economic demise actually did the trick.
Faced with the
possibility of financial failure, Iceland had to
think on its feet. Instead of
bailing out banks USA-style, the country
forgave mortgage debt for the population – and completely
started over from square one.
A country
with a small population of roughly 320,000 citizens, Iceland‘s entire banking structure “systemically failed” in the
early days of the 2008 recession.
Despite the fact that Iceland is still on the road to recovery, the country
ranks high as a politically and economically stable nation. Their success
over the last few years has been largely under-reported, and the story behind
it is quite fascinating.
A Little Bit
of Morality Goes A Long Way
Let’s face it:
Icelanders are tough. They are entirely isolated, living in
frozen tundra, perpetually enduring less-than-optimal weather patterns.
While they are surrounded by epic natural beauty, these people aren’t spoiled;
they’re tenacious.
Instead of
allowing the criminals responsible for bank fraud to run free as the years passed by, Iceland thought it
might be wise to actually indict
bankers who committed serious financial crimes that contributed to the collapse. By paying off loans for consumers, forgiving homeowner debt (up to 110% of the property
value), and throwing the offenders in prison, Iceland was able to bounce back. Now, its economy is “recovered” and is growing
faster than both the US and European economies.
When Iceland’s President Olafur Ragnar Grimmson was asked whether or not other countries – Europe in
particular – would succeed with Iceland’s “let the banks fail” policy, he stated the following:
“Why are the banks considered to be the holy churches of
the modern economy? Why are private banks not like airlines and telecommunication companies and allowed to go bankrupt if they have been run in an
irresponsible way? The theory that you
have to bail out banks is a theory that you allow bankers enjoy for their own
profit, their success, and then let ordinary people bear their failure through
taxes and austerity.
People in enlightened democracies
are not going to accept that in the long
run.”
Grimmson’s
“famous” reply to the controversial question, “What is the reason for Iceland’s
recovery?” is most remarkable.
“We were wise enough not to follow the traditional
prevailing orthodoxies of the Western financial world in the last 30 years. We introduced currency controls, we let the banks fail,
we provided support for the poor, and we didn’t introduce austerity measures like you’re seeing in Europe.”
Picking Up
the Pieces On the Road to Recovery
Of course,
though, everything isn’t all rosy. Many
Icelanders have two or three jobs to sustain themselves and their families
post-2008, and a sudden spike
in taxes – an inevitable result of letting the banks fail – made the burden even harder to bear.
Though
unemployment is down (it’s less than 5% of the population), you could say that
“Iceland is a victim of its own success.” Very high standards of living and 60-70 hour work weeks
create a bit of a pinch in the pockets. Difficult challenges lie ahead, but whichever way you
look at it, Iceland did avert a seemingly incurable catastrophe. The point is that Iceland was criticized for
allowing the banks to fail – and we now know that the disparaging remarks from
scathing critics were too quick to judge.
Since 2008,
Iceland has added jobs to its tourism and green energy sectors. In fact,
according to the Icelandic Tourism Board, foreign visitors increased last year by 15.9% – and
travel now accounts for 5.9% of GDP.
However
unorthodox in its method, Iceland’s “let
it fail” policy resulted in jubilation. We
can’t seek perfection in the years after a global financial collapse, but we
can acknowledge nations who persevered with integrity.
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