Iceland's financial meltdown

[Jeff_Leskovar]

In the latest issue (April '09) of Vanity Fair Michael Lewis tells the peculiar story of Iceland’s financial meltdown without ever discussing fractional reserve banking, the central bank, or anything else that might explain what happened. He even claims that a prominent Icelandic journalist told him that no one in Iceland understands what happened. Could someone write Iceland’s recent history from an Austrian perspective? It could be very influential with the Icelandic elite. Maybe the Mises institute could convert an entire country to our point of view!

[Nitroadict]

@Jeff

In the latest issue (April '09) of Vanity Fair Michael Lewis tells the peculiar story of Iceland’s financial meltdown without ever discussing fractional reserve banking, the central bank, or anything else that might explain what happened. He even claims that a prominent Icelandic journalist told him that no one in Iceland understands what happened. Could someone write Iceland’s recent history from an Austrian perspective? It could be very influential with the Icelandic elite. Maybe the Mises institute could convert an entire country to our point of view!

What pissed me off most was reading this idiotic dreck from, you guessed it, The Huffington Post, where some jobber proclaims Iceland to be an example of libertarianism failing “yet again”.

Even on the economic twilight of the proverbial hitting the fan, the Democrats still enjoy stewing the pot with completely mis-interpreted & purposely smeared terminology & semantics in order to bring almost every issue to a matter of “You’d be crazy not to agree with us!”, or “If you not with us, we will pretend to give the right to disagree, but turn around and tax into poverty you until you consent!”

Here’s an excerpt of this “journalistic gem” in action, which starts off swinging with a Rumsfeld quote, & ends with a shark jump over a few words from Komrade Krugman:

via: http://www.huffingtonpost.com/iris-lee/libertarian-experiment-in_b_172961.html

Friedman saw Iceland as his utopia. “I would like to be a zero-government libertarian [but] I don’t think it’s a feasible social structure. I look over history, and outside of perhaps Iceland, where else can you find any historical examples of that kind of a system developing?”

At first, the policies appeared to be very successful. The economy grew at a strong pace, rising until Iceland achieved one of the highest per capita GDPs in the world. In 2007 it also topped the score for the United Nation’s Human Development Index.

Iceland rocketed to the top 10 in the indexes of economic freedom. The Cato Institute praised the “Nordic Tiger” for its flat taxes, privatization and economic freedoms, and rated it as the least regulated country in the world.

Unfortunately, it has become evident that these libertarian policies were not the panacea that Friedman claimed they were. In fact, economists are already using Iceland as a textbook case of how to ruin a nation’s economy. As Paul Krugman recently noted, there is an “almost eerie correlation between conservative praise two or three years ago and economic disaster today.”

[+o(]