Why Didn’t We Do This? On Iceland

Via Mike’s blog, I discovered this fascinating article about Iceland.

I’m sure everybody remembers how at the beginning of the current economic crisis Iceland was on the news a lot. This was a country that had participated most actively in the financial bubble and now crashed a lot harder and a lot faster than many other countries. At that time, the crisis that now is experienced by Greece, Spain and Italy was still a thing of the future. Iceland was the first small country (please correct me if I’m wrong here) to be hit hard by the crisis. It was also the first one to come out winning.

Iceland hasn’t appeared on the news for a while, so I’m sure many of my readers will be surprised to learn (just as I was) that this is how the country decided to deal with the crisis:

The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

While here in the US we keep agreeing to endless cuts to education, healthcare, science, research, social programs, etc. in order to repay the debt caused, to a great degree, by bailing out billionaires, people of Iceland decided to jail the crooks instead of rewarding them:

In the March 2010 referendum, 93% voted against repayment of the debt.  The IMF immediately froze its loan.  But the revolution (though not televised in the United States), would not be intimidated. With the support of a furious citizenry, the government launched civil and penal investigations into those responsible for the financial crisis.  Interpol put out an international arrest warrant for the ex-president of Kaupthing, Sigurdur Einarsson, as the other bankers implicated in the crash fled the country.

Moreover – and this really sounds like science fiction – the people of Iceland are now writing a new constitution. Mind you, not the politicians are writing it. The people are:

To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens. This document was not the work of a handful of politicians, but was written on the internet. The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape. The constitution that eventually emerges from this participatory democratic process will be submitted to parliament for approval after the next elections.

I don’t think the US needs a new constitution. However, it would be nice to have a system where, instead of watching corrupt politicians of both parties fight their useless battles in Congress, citizens could have more of a say in what’s going on.

For now, it seems like there are two countries that have been able to weather the global crisis pretty well: Iceland and Canada. (I’ve just come back from Canada and, believe me, they are doing extremely well compared to how things are going in the US, let alone in Western Europe). If anybody knows of any other countries that are dealing with the crisis in inventive and productive ways, please let me know in the comments.

Because no matter what your political persuasion is, I think that you have to agree that whatever we are doing in the US is not working.