Iceland: It’s different there

Iceland Map by Abraham Ortelius ca 1590 (Source: Wikimedia Commons)

Every four years, residents of New Hampshire (population 1.3 million) are the focus of media attention as every want-to-be presidential hopeful comes to their state for the first primary of the year. Voters have a chance to meet the candidates face to face.

For people living in Iceland it’s like New Hampshire all the time.

Iceland is an island roughly the size of Kentucky with less than 10% of the population of the Bluegrass State. In fact, if it was a US city, Iceland’s population of 318,452 would put it between Aurora and Toledo, down around 60th place. The least populated state, Wyoming, has 568,158 inhabitants, over 40% more than Iceland.

Iceland is one of the most cohesive societies on the planet. 94% of the current population are descended from the original settlers, a mix of Norse, Irish and Scots, 93% live in urban areas and 80% are members of the Lutheran Church of Iceland. Â (There’s even a database where an Icelander can find out how closely related he/she is to someone before dating them.) This is a country where people are listed in the phone book alphabetically by first name.

So it is not a surprise to me at all that the government of Iceland has placed the interests of its people ahead of those of international bankers. The general population and the politicians know each other (and where they live and who their parents and grandparents were).

Iceland has recently embarked on an experimental form of constitution-making from below. Iceland is in this a rare – in distinct ways probably unique – example of a popular or citizen-driven constitutionalism. This participatory approach in many ways challenges core assumptions of mainstream, modernist understandings of constitutionalism, such as the idea of constitutionalism as a social phenomenon and practice dominated by legal professionals or that of constitutions as higher laws that are near to impossible to change. At the same time, the Icelandic experience brings to the fore many questions that popular or democratic constitutionalism raises as an alternative understanding and practice of constitutionalism, not least related to the modes and effectiveness of participation, the notion of representation in the constitution-making process, the role of deliberation, as well as the actual, substantive results of participatory constitution-making.

Iceland really is a place where all politics are local (and there’s an alignment of interests there that’s hard to achieve with our population of 311.6 million people).

(Note: this is not intended as a defense of what happened in this country. We should have seen the (mostly) men who wantonly wrecked the economy pay a public, personal price for their crimes.)

Iceland anger forces banks to forgive debt while anger here is ignored

Unfortunately, anger here against banks has had little effect, mainly because Obama hired the architects of the disaster to pretend to clean up the mess they made. In Iceland, banks are forgiving debt. This is because they have a government that genuinely responds to the demands of their people.

In The US, the Home Afforable Modification Program “has to date been a failure.” This should come as no surprise since, as Eliot Spitzer says, Obama “has been on Wall Street’s side since Day One.”

Iceland nationalized their banks, arrested banksters, and defaulted on their bonds. Thieu economy is now recovering strongly while ours isn’t. But when the US president is a captive and compliant entity of the banksters, that’s to be expected.

Spitzer summarized Obama’s efforts as the “occasional speech” criticizing Wall Street practices, largely followed by little to no substantial legislative action.

The Great American Foreclosure Song from ProPublica uses satire and humor to explain how the fix is in.

Iceland president: Renewables helped us survive financial crisis

Icleand has shown us what democracy looks like. They nationalized banks, fired and arrested the banksters, defaulted on bonds, and are now recovering.

Renewable eneregy has aided in that recovery. Emphasis added.

I chose the democratic will of the people over the force of the market,” Grimmson said. In other words, the irresponsible bankers, who the Iceland Finance Minister even compared to Enron, lost their jobs — not middle class workers. Clearly, Occupy Wall Street sympathizers will find this brand of leadership inspiring.

But there’s another aspect of the story that should intrigue the green-inclined. Iceland, Grimsson says, is now powered entirely by clean energy. And that has led to post-crisis investment that has helped Iceland weather — and begin to emerge from — its recession.

Romney / Bachmann in 2012? And hurray for Iceland!

"I Think of Iceland." Spain protests. Flickr photo by edans

From the discussions on our podcast last night:

Bachmann did well in the Republican debate because she was non-wacko and thus surprised many. However, Romney is still the frontrunner. The nomination is his to lose, even as a recent poll shows Cain (yes, Cain) closely behind him. But Ron Paul was the real winner of the debate because his ideas, once considered fringe, are now mainstream. For example, he has long opposed our foreign wars because they are bankrupting the US and is suspicious of the Fed. Other Republican though are cynically becoming anti-war as a wway to attack Obama, in the same way that the anti-Iraq war protests were mostly anti-Bush. Democrats vanished from the protests once Obama got elected. Republicans will become born-again hawks if they take the White House. And a Romney / Bachmann ticket could unite the Republican Party.

The Greece debt crisis may seem far away and unimportant. But it will impact us. Greece sooner or later will default or their debt will be restructured, causing much pain to over-extended banks holding enormous amounts of toxic glop bonds. When Lehman Brothers failed, everyone knew the consequences would be severe even if they didn’t know exactly what would happen. Moody’s just put the big three French banks on downgrade watch. This is a direct reaction to what is happening in Greece. A liquidity crisis could be coming because the big banks stop loaning because no one trusts each other or knows where the risk is. Your bank loans $10 billion for a week to another bank who discovers one of their counterparties just became insolvent because their credit default swaps on Portugal debt went the wrong way and that impacts them, the bank you lent to, and thus your bank too.

Iceland did it right. When their banks collapsed, they let them fail, nationalized them, arrested some of the CEOs, then defaulted on their bonds. International banks threatened them with no more loans. Iceland ignored them and is on the road to recovery.

The podcast is Steve Hynd of Newshoggers, Josh Mull (@joshmull) and myself.

Listen to it on BlogTalkRadio or on iTunes or download it.