If voters in the US or the UK had been given a vote on whether their governments should inject trillions of dollars into their banks (in the form of loans, guarantees and investments), it is pretty likely that those referenda would have been lost.



Most opinion polls indicated that citizens were furious with their banks - and were not persuaded that letting them fail would wreak the kind of economic havoc that would impoverish all of us.

So most economists, central bankers and finance ministers would probably say that we should be grateful that in America and Britain the people aren't quite as sovereign (if that makes sense) as in Iceland.

However most of us should surely empathise with the majority of Icelanders who don't see why they should be punished for the greed and stupidity of a handful of banks and bankers.

Actually, let's be clear: they will vote in their referendum on whether they should be punished yet more for the mistakes of their banks; there's no doubt that Iceland and its citizens have already been firmly spanked for the failures of their financial system.

Icelanders' real disposable incomes fell almost 20% last year and are forecast to fall a further 15.8% this year.

In other words, each of them will be a third poorer on average as a result of the deep dark recession caused by the collapse of their over-stretched banks.

Of course, they all became unsustainably wealthier during the boom years of the early-to-mid noughties, when hot money gushed into high-interest rate Iceland as part of the global carry trade and was re-lent and re-invested all over Europe, but especially in the UK.

That said, losing income is always painful, irrespective of whether that income is sustainable and deserved in some fundamental economic sense.



And by the way, those of you who put your money into Icesave accounts for the extra increment of interest that wasn't available from more mainstream banks: well, you too could well be charged with fecklessness and with receiving unsustainably high returns.

Yet you have been bailed out, by Her Majesty's Treasury - which is now insisting that Icelands' beleaguered citizens pay it back.

So let's be honest, Icelanders' reluctance to dig into their pockets to the tune of £3.4bn to repay Britain and the Netherlands is understandable.

And for me what this saga illustrates is something I've been banging on about for ages, which is the democratic deficit between people and finance, between citizens and big banks.

Icelanders now know, more than any nation on earth, that when banks run into difficulties, they have to be bailed out by all taxpayers.

We've learned that too.

But we weren't as aware of it as we should have been, before the crisis.

And, arguably, we haven't yet been properly consulted on what kind of banking system we want, what kind of risks we think the banks should run, for the future.

Given the economic price we've all paid for the reckless behaviour of banks, it's perhaps surprising that we're not all as angry as the Icelanders.

BBC.co.uk, January 07 2010
By: Robert Preston

Views: 27

Comment

You need to be a member of 12160 Social Network to add comments!

Join 12160 Social Network

"Destroying the New World Order"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

omegamann is now a member of 12160 Social Network
4 hours ago
Doc Vega commented on Doc Vega's blog post Three Must See Movies for Halloween
"cheeki kea Thanks. I watched most of the movie but I'd forgotten until a few minutes into it…"
8 hours ago
cheeki kea commented on Doc Vega's blog post Three Must See Movies for Halloween
"That's a fine movie menu you've got Doc V. I love the old days theme. Great to view when…"
14 hours ago
Doc Vega posted a blog post

Three Must See Movies for Halloween

Grab Your Popcorn and Settle In!  If you really want to get in the mood for Halloween and you like…See More
yesterday
Bob of the Family Renner posted photos
yesterday
Doc Vega posted a blog post

Terror on All Hallows Eve

Chapter IElizabeth was angry. All of her friends were going to be out on Halloween, but her. She…See More
Monday
Jeff favorited Jeff's profile
Monday
Jeff favorited Jeff's profile
Monday
Jeff favorited Doc Vega's profile
Monday
Jeff is now a member of 12160 Social Network
Sunday
Doc Vega posted blog posts
Friday
tjdavis posted a video

How Corporations Are Secretly Poisoning Our Food Supply

Dupont and 3M have been secretly poisoning America for decades. PFAs — also known as forever chemicals—are now in our food, water, clothes, and our blood. Th...
Oct 24
Doc Vega posted a blog post

They Won’t Stop

 The demonically driven left will not stop. Makes no difference how much violence they call for or…See More
Oct 22
Doc Vega posted a blog post

What US Scientist unwittingly helped the Nazis devise the V-2 Missile?

  In the early 1920’s and leading up to World War II German technology outpaces the peace time…See More
Oct 20
tjdavis favorited Sandy's video
Oct 19
tjdavis posted a photo
Oct 19
Christopher Walker is now a member of 12160 Social Network
Oct 19
tjdavis posted videos
Oct 19
Burbia commented on tjdavis's photo
Thumbnail

Reflection

"Let's see if this goes past indictment."
Oct 18
Doc Vega commented on Doc Vega's blog post Something Watches From Out there in the Wilderness
"cheeki kea That's very interesting history. So many things about history that go ignored or…"
Oct 18

© 2025   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted