Took away this interesting little tidbit from Krugman’s article today
But a funny thing happened on the way to economic Armageddon: Iceland’s very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. Where everyone else was fixated on trying to placate international investors, Iceland imposed temporary controls on the movement of capital to give itself room to maneuver.
So how’s it going? Iceland hasn’t avoided major economic damage or a significant drop in living standards. But it has managed to limit both the rise in unemployment and the suffering of the most vulnerable; the social safety net has survived intact, as has the basic decency of its society. “Things could have been a lot worse” may not be the most stirring of slogans, but when everyone expected utter disaster, it amounts to a policy triumph.
The political powers make things out that we have to save the financial sector at all costs. That we must suffer while they are saved, else the world will collapse into a 21st century Dark Ages. It’s bullshit …
The whole governmental response to the economic collapse could have come right out of the Shock Doctrine (a fantastic and somewhat terrifying read). In short The powers that be are using the shock of an economic collapse to convince the general populace (the 99%) to give up social safety nets, collective bargaining rights, and on and on because there’s “no other way” … all the while enriching the monied people by rigging things in their favor.
Maybe, hopefully, the OWS protests mean that people are waking up to this reality