Iris Erlingsdottir

Iris Erlingsdottir

Posted January 20, 2009 | 11:50 PM (EST)

Iceland Is Burning

While Americans were watching the historic inauguration of Barack Obama as successor to the deeply unpopular conservative George W. Bush, thousands of Iceland's citizens were fighting riot police around the Icelandic parliament building Althingi to try to prevent the world's oldest parliament from meeting.

Riot police have fought protesters with pepperspray and teargas.
Photo credit: Johannes G. Skulason

"We are calling on the world to help us get rid of this corrupt government," Sturla Jonsson, one of protesters said in a midnight phone call from downtown Reykjavik where a crowd of about 2,000 still surrounded the Althingi House, in front of which a bonfire continued to burn. The protesters pounded drums and other instruments, shouted slogans against the government and parliament and threw eggs and food items, even old shoes at the house of parliament. The protest was nowhere close to slowing down despite it being close to midnight. The parliament postponed meeting until tomorrow afternoon, but protesters, whom police fought all day with teargas, pepperspray, and clubs, vowed to stay downtown all night, "and as long as we have to" Jonsson said. "And I want to tell you that the people gathered here are not "activists" or "militants," he added, "they are just ordinary adults of all ages."

Photo credit: Johannes G. Skulason

One year ago, Iceland was named the most desirable country in the world. Today, its economy has been devastated by the catastrophic collapse of its three largest banks. Unemployment rose 45% between November and December, and a recent survey indicated that 40% of households and 70% of businesses were technically bankrupt. Since the fall of the banks in October, there have been no resignations from the government, the boards of the now nationalized banks have remained substantially the same, and weekly gatherings calling for new elections have been ignored.

Americans will certainly recognize strong parallels between Iceland's current situation and their own. After years of tight state regulation, the conservative government of David Oddsson privatized Iceland's banks, and in exchange the newly-rich owners of these banks ensured that Oddson's party remained in power. Even after he stepped down, he had himself appointed as head of Iceland's Central Bank and continued to ensure that regulatory oversight was kept to a minimum.

The Icelandic government appears to be completely oblivious to Reykjavik burning around them, fiddling with vital legislative affairs, such as the item on today's parliamentary agenda, the Conservative party's bill to allow supermarkets to sell booze. Members of the government, who themselves have been busy burning - most recently the country's socialized medical system - remain convinced of the correctness of their current misguided course of action. "We need to keep this system of ours running. We need to try to improve it," Education Minister Thorgerdur Katrin Gunnarsdottir, (whose own personal finances are linked to a shady scheme cooked up in one of the Icelandic banks) said this evening. The incremental changes proposed by the government stand in stark contrast to the egregious abuses of the financial system for the benefit of a select few over the past few years.

Thomas Jefferson wrote in the American Declaration of Independence that "Governments are instituted among Men, deriving their just powers from the consent of the governed [and] whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government." As the protesters fight to enforce that right, in this county that has known no war for generations, that has not seen violent conflict among its citizens for centuries, we must ponder what could be.

Today, as the United States makes a fundamental shift in direction, Iceland is tearing itself apart. The peaceful transition of power we watched in Washington following a fiercely contested election is a symbol of hope to us. The competent confidence and inspiring rhetoric of Barack Obama have rallied the vast majority of Americans behind him to face the myriad challenges all around us. The arrogance and obliviousness of Iceland's ruling elite has had the opposite effect.

Over the past eight years, America ceased being the City on the Hill, shining its light to the rest of the world. America and Britain closed the NATO air base in Iceland, and have made no offer to help Iceland in its time of trouble. We need help, not only to break down the old power structure, rotten to the core, but also to prevent it from being rebuilt. We desperately need stability, economic assistance, impartial advice, and fair supervision.

Barack Obama, a nation turns its lonely eyes to you. Please!

Protest organizers have emphasized that protesters be respectful of police; "they are only doing their jobs." Photo credit: Kjartan Einarsson

Photo credit: Kjartan Einarsson

Read more on this subject:

What's next for Iceland: Ensuring a Fair Election in May
Iceland is Burning - Day 2
"Crime Once Exposed has no Refuge but in Audacity"

Iceland - the Nordic Zimbabwe

While Americans were watching the historic inauguration of Barack Obama as successor to the deeply unpopular conservative George W. Bush, thousands of Iceland's citizens were fighting riot police arou...
While Americans were watching the historic inauguration of Barack Obama as successor to the deeply unpopular conservative George W. Bush, thousands of Iceland's citizens were fighting riot police arou...
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Acclaimed cartoonist/writer
01:52 PM on 01/26/2009
"The feeling is we are unable to look after our own affairs" says Hallgrimur Helgason, one of the country's leading novelists. "We were on our own for years and we went too far, too fast, in too little time. We behaved like children and the first thing we did when the stock market opened 10 years ago was go to London and buy toy stores and candy stores. Now we are bankrupt and there will be no money for years to come and we have more debts than we can ever repay.
Story continues below

"We're just like kids whose parents went away for the weekend and we trashed the entire house."
Quaerite primum regnum dei
09:58 PM on 01/25/2009
I certainly feel for the people of Iceland and frankly can't help but think we are next.We may be asking you for help on how to handle lie after total fiscal collapse.

Lastly, your protest is admirable and shows the stark difference between the rest of the world and AMericans- citizens in other countries, from Spain to Myanmar, will take to the streets when injured we do so only in small numbers.Most Americans don't recognize their own exploitation.
09:24 PM on 01/25/2009
I'll buy another Bjork CD if that'll help things over there. Don't worry Iceland, be happy. It's going to be fine.
07:05 PM on 01/25/2009
I genuinely feel for Iceland but would probably feel more for a country that respected endangered life too much to practice whaling. Sorry, but there it is. Stop killing loving, sentient beings and I'll intercede with our new president for you. Until then...
07:39 PM on 01/25/2009
As AnnaHI put it so beautifully in her comment: For any Americans on the subject of whale-killing: when you stop killing people we'll stop killing whales.
Quaerite primum regnum dei
09:55 PM on 01/25/2009
Cold post.
12:41 PM on 01/25/2009
3 Cheers for a long awaited resignation!!!!
09:31 AM on 01/25/2009
"We are calling on the world to help us get rid of this corrupt government" When you get your government straightened out, I call on Icelanders to help the US get rid of our corrupt government. Thanks and good luck.
01:35 PM on 01/25/2009
Iris, If things don't work out, you might want to consider emmigrating to the U.S.
07:42 AM on 01/25/2009
Having been to Iceland a number of times, while on international travel lay overs, i have to say I feel for the people of Iceland. There is a lot of chaos and craziness going on right now, and I hope that someone on the international stage will aknowledge the struggle of the Icelanders, and do what we, yes we can to help the people resolve their own crises
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07:37 AM on 01/25/2009
We should support any real effort at obtaining freedom, if not with money and guns (usually a bad idea) then with words and political pressure. Why haven't our leaders spoken out on this subject? What is happening there is the most likely way our country will move from representative republic to plutocracy (of course needing funds nearing a billion dollars to be elected, makes it likely we have already moved).
09:33 AM on 01/25/2009
Are you serious? Don't call for the US government to intervene in Iceland. They have enough problems already.
05:38 PM on 01/25/2009
It's a global economic problem. We need to help them for moral reasons, but also as it directly benefits us. A better question is what is the reason not to help them?
06:34 AM on 01/25/2009
I enjoyed my several visits to Iceland. It is time for them to join the EU and hook up with other countries for guidance and unity. I'm surprised Norway hasn't helped them. Iceland is out there alone and I've noticed an attitude of arrogance developing in Icelanders over the past few years.

Now is the time for Icelanders to turn the page and join Europe. The Euro alone will give them some stability...certainly more than they have now.
09:30 AM on 01/25/2009
Negative. They need to create a government whose first priority is the welfare of the people.
02:07 PM on 01/24/2009
The people of Iceland deserve governmental accountability regarding the dire economic situation of their country...

It is so sad that it has come this and I hope this desperate message is heard by our President Obama and other heads of state who are in a position to help these people...
06:53 PM on 01/24/2009
our own president doesn't even turn his head. he's been invisible through the whole thing. you wouldn't believe the insanity that goes on around here now. everyone was in on it, even people who were political enemies. it's like dubya and sean penn having drinks or something.
10:15 PM on 01/23/2009
Iris, tell your people not to give in, continue the protests and try to enlist the police into your ranks. Always remember that the people know hardship, these corporate thugs do not. That is why the people of all Nations will always outlast them. Control the commerce and they cannot function. We may have our own hardships right now but, many of us support your fight for Freedom.
05:33 PM on 01/23/2009
We have our own problem here, that need to be dealt with FIRST.
07:56 PM on 01/23/2009
I think you're being pretty harsh considering Iris is just reporting on the condition of Iceland. That's like an American journalist in some other country filling them in on our condition. Plus, with many banks in Iceland holding (or once holding) alot of the world's money, is does in some way affect us.

Very interesting article Iris. Thanks for sharing and I wish the people in Iceland the best of luck.
10:10 PM on 01/23/2009
Being ignorant of the rest of the world was a Bush specialty. Why would anyone want to continue on a path of ignorance? We might learn from other's mistakes just as we might learn from Sweden's ability to turn their economy around when it collapsed a few years ago.
05:42 PM on 01/25/2009
Excellent point.
02:29 PM on 01/23/2009
umm..Iris...we closed our NATO base in Iceland and you cite this as a 'bad' thing?

You must understand, that the the US and it people are broke, too. While I agree it is sad that is seems like the whole world is ignoring the troubles in Iceland, i do believe you guys received financial support from the IMF, which the US donates heavily to in order to help in times like these...

we are all in the same boat; in the post-imperial Obama era, what you are asking from the US seems more like an 'occupation' than anything else..which the US will surely be blamed for nation can save another..only the people of that nation can save their own is not, nor never was, it the place of the US to dictate or nation-build other countries..but i can agree on the social solidarity and financial support fro international orgs. like IMF and World bank

capitalism did not fail; people failed, as they always do in "idealistic" systems like communism or pure free market capitalism, which both in pure theory are good, but in reality are disasters, we need a moderate, reality-based mixed economy.

Best of luck and i have no doubt the good people of Iceland will rise above the chaos!
03:12 PM on 01/23/2009
The USA (as well as other countries) should definitely help Iceland. We have been pumping money into a flawed system at home to little effect. It's a global economic problem, and it needs to be resolved globally otherwise it will feedback into the USA again and again and stall any efforts for a lasting resolution. We also should have kept the NATO base in Iceland, but that is another matter entirely. The leaders of numerous countries need to get busy on resolving these issues.
12:29 PM on 01/23/2009
I wish random Icelandic reporters would stop speaking on behalf of the Icelandic nation as a whole.
"Barack Obama, a nation turns its lonely eyes to you. Please!" ?
What does Barack Obama have to do with any of this?
I think Íris should report facts or make sure people know that any opinions or feelings described in the article are hers and not an entire country's.
And for everyone here who is saying "see, privatization obviously doesn't work!", would you care to explain your views? Why exactly does the problem lie there? What about oversight? What about the regulatory authorities that were supposed to make sure that the Icelandic equivalent of the SEC had any rules to enforce? Why did the authorities not make sure that everyone understood there was no way they could guarantee all deposits?
People need to be aware of the risks they are taking. Banks are not some riskless, for-the-good-of-the-nation, blessed by god entities that exist for some other reason than profit maximization. Granted, they were very poorly run, but a large part Icelanders also ran their households very poorly.
But of course, everything is always someone else's fault.
Also, for any Americans on the subject of whale-killing: when you stop killing people we'll stop killing whales.
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01:18 PM on 01/23/2009
And for everyone here who is saying "see, privatization obviously doesn't work!", would you care to explain your views? Why exactly does the problem lie there?

Well here in the United States, we privatized the coining of money in 1971 I believe, to the Federal Reserve. (The Treasury prints the paper, but it isn't "in circulation" until the Federal Reserve takes their percentage by distributing it through *loans* to the people via other banks.) Our Constitution reserves the right to coin money to the Congress, so our present arrangement is literally illegal. Is the situation in Iceland similar? Does the recent privatization represent a sharp break from longstanding custom or interpretation of what is legal?
02:11 PM on 01/23/2009
No the situation in Iceland is not similar to that.
She is referring to the privatization of the banks in Iceland. May people disagreed with that process because of how the privatization was handled. That is not the same as declaring all privatization as bad. Also, attributing Iceland's problems to the simple fact that the banks were privatized some years back (as some people seem to be doing) and not numerous other factors is very misguided in my opinion.
12:19 PM on 01/23/2009
Wow, Iceland's govt. sounds like Ohio's Republican dominatged state govt. a few years ago. While Ohio continued to lose tens of thousands of jobs and our public school system continued to suffer from an inadequate and illegal system of funding, our state legislators were all wrapped up in voting on conceal carry lawsm fighting gay marriage and engaging in all kinds of corrupt behavior instead of dealing with the pressing issues of the day.

Now we have a govt. willing to deal with those issues an no money to deal with them.

Doncha just love the conservatives? They leave a trail of destruction in their wake wherever they are!!
03:18 PM on 01/23/2009
Yeah, the only bright spot in Ohio is that they have screwed up the economy for so long there that the people missed a great deal of the bubble. Housing prices were somewhat stagnant and the job numbers were low for so long that it's not as great a shock to the system there. It sucked before 08 and it sucks more now, but the people are used to it. You would think that the rest of the country could look at Ohio and see where the conservative policies would eventually lead-but nope.