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Should We Be Like Iceland? A Controversial and Alternative Approach to Economic Turmoil
In the midst of a viral meme claiming that the US (and other European nations) should “be like Iceland” and the recent claims that Wall Street owns the US government, this is a glimpse into what really occurred in Iceland during the 2008 financial collapse and how some speculate we could have learned from it.
Is everything in the meme regarding Iceland’s economic solutions and recovery true? Upon further research, it is surprising to report that yes, it is. Of course, these are only small statements meant to represent a portion of the big picture and it makes no mention of how the country reacted and how the rest of the world was impacted. As with the Denmark meme regarding their own economic policies, this meme leaves a lot to be desired and must be broken down to understand if the US can extract anything from Iceland’s economic solutions.
Based on comments from when the meme was originally posted, one of the biggest criticisms is that Iceland is incredibly small compared to the US population and policies that they implement could never work here. The criticism of the size comparison is completely reasonable; Iceland has 0.1% of the population that the US does, but it is hardly fair to say that nothing in their strategy is worth learning about. Though they may have only had 3 banks fail in their collapse, compared to our 465 between 2008-2012, their collapse in comparison to the US collapse, their collapse based on the size of their economy was the “largest experienced by any country in economic history.” So although there is a size differentiation, their stakes were raised even more by the size of their collapse relative to their population and economy, yet they managed to do what no other country did under the same circumstances: they let their banks collapse.
Philosophers stone – selected views from the boat http://philosophers-stone.co.uk
Source: http://www.philosophers-stone.co.uk/?p=8478
