Iceland is a tiny country. It sits in the far reaches of the north Atlantic somewhere east of Canada. Its clock/days different. Because of its location, 24 hour days of sunshine or darkness are common. Population 320,000.
Iceland suffered the same banking disasters as the United States. Iceland had its 2008 where the banks brought the economy down.
Iceland dealt with the problem different from the United States. Iceland showed it had brass testicles.
Iceland’s banks needed a bailout. The people said no. An emphatic no! It was a David/Goliath situation. As in biblical times, David won.
The people in effect created a new government, adopted a new constitution, and arrested, prosecuted and jailed bankers and politicians. None of the too big to fail and too big to prosecute crap for them.
At the same time, Iceland created a Special Prosecutor to investigate banking crime in connection with or in the wake of its banking crisis. The list of bankers and government officials jailed is endless. Proof in many of the cases revealed the bankers enjoyed playboy lifestyles, mistresses and all.
Iceland’s economy took three years to improve.Following 2011, the percentage of unemployed dropped dramatically. Loans were available to Main Street and ordinary people.
Banks are and have been whores throughout history. For whatever reasons, governments have not been able to control bankers. Bankers have made money for themselves in gigantic numbers during certain periods. Most recently, the early 2000s through 2008 in Iceland. The early 2000s to today in the United States. Banks are still screwing the American people. The reason simple. The U.S. did not take the bankers in hand and kick them in the ass as Iceland did. Iceland’s finances continue to improve at the same time that the U.S.’s remain the same. In the U.S., bankers incomes are the highest ever and continue to rise. Whereas, people’s incomes remain stagnant.
Iceland and the U.S. are now facing another banking problem. That of central banks. The Federal Reserve System in the U.S.
Central banks allocate money to those entities actually in the banking business. A purpose of central banks is to protect depositors. In the 1970s, Congress changed Federal Reserve laws to spell out the purpose of the Federal Reserve. To effectively promote…..the goals of maximum employment, stable prices, and moderate long term interest rates. Also to…..regulate responsibility over many consumer credit protection laws.
The Federal Reserve has failed dismally in its responsibilities. The organization overwhelmingly does everything to protect and aid banks to the detriment of the American people.
Iceland has a similar problem. Their central banking system still leans the way of banks. A strong movement is underway to change the money allocation responsibility of Iceland’s central bank to the government. Makes sense. The government creates money. It should bear responsibility for who gets it. It is expected Iceland will make the move in the near future.
In the U.S., there are isolated voices to debunk the Federal System and give the allocating power to the government. Whether successful is highly doubtful. The banks, their money, their lobbyists and their attorneys, are geared up to oppose such a change.
The U.S.has not changed its banking laws as radically as Iceland. Until the U.S.does, bankers will continue becoming richer by day and the people poorer.
Dodd-Frank became law in 2010. The new law contained many provisions favorable to the American people. Laws were changed so greedy bankers could not practice certain of their evil ways again.
One provision had to do with deposits insured against loss. Somehow the banks had utilized the old law to have many of their 2008 losses guaranteed by the government. Taxpayer dollars were used to make the banks whole.
Derivative trading, securitized debt and non performing loans were guaranteed 100 percent by the government. The government paid off these guarantees with taxpayer dollars.
Dodd-Frank said no more! A victory for the American people. It lasted only four years. In December 2014, it lost its way. The old game returned. The government would insure and otherwise guarantee the speculative games/investments the banks were engaged in. It has been described as heads the bankers win, tails the taxpayers lose.
How did Congress and the President permit this regression so soon? The budget battle was in play in December 2014. No budget, the government would shut down. The budget was $1.1 trillion.
Republicans required their pound of flesh. Rollback the Dodd-Frank provision re; no taxpayer guarantees in certain areas. Many Democratic legislators and the President himself gave in to get the budget passed and keep the government running.
I do not like what happened. It is politics, however. It also represents one of the rare moments of a negotiated result.
A problem specific to the U.S. regarding banks involves the use of money in a less than palatable sense. Banks are so big they can buy the political process. And they have.
Little Iceland did what big United States could not/would not do. Iceland took the bull by the horns and did everything necessary to correct its banking problems. The U.S. did not. The people were buffaloed into the thinking the government had.
The American people remain in a precarious position with regard to banks. The solution is to do what Iceland did. Roll over the banks, force them to do what is right. I doubt such will occur. Our elected officials are too receptive and too dependent when it comes to banker contributions and perks.
Government by the people, for the people, continues to erode away.