Now, If We Could Manage To Extradite Jon Corzine To Iceland

Damn!  These Icelanders actually sent two banksters to prison!  Man-bites-dog-alert!

Really, ya'll, think it over. The United States has seen its wealth and culture decimated by a series of massive bank frauds. Apart from Bernie Madoff, who turned himself in, no one has been indicted, or prosecuted, or seen a day of jail time. Most of the perpetrators of the crime are still in their jobs, or jobs similar, in both finance and government.

So, OS, ever the innovator, has a proposal:

Let's lease Iceland. 

 
Not the real estate, mind you, but its prosecutors and courts, economists and political leadership. They told Europe and its death-dealing Euro to stick it where the sun don't shine, returned to their own currency, and began prosecuting the fraudsters (after kicking the previous regime of politicians to the curb for their complicity in turning their country into a giant hedge fund). Their economy is recovering, because they made a decision to save their cultural soul and make the economy the servant of the culture, not the master.

So, knowing that, let's make a deal: We grant the Icelandic courts and prosecutors jurisdiction to prosecute financial fraud in the United States, wherever they find it. A bounty system, if you would. The more they recover, the more they get to keep. They indict, we extradite. They convict and house the banksters (for loooong sentences) in cold and uncomfortable cells up on the eastern shore, where the cold winds blow from the Baltic. The banksters get to learn how to grow their own food, fish for their protein from small open boats with limited fuel and no life jackets, and are not allowed in the vicinity of any electronic device apart from a transistor radio tuned to the local station. We pay Iceland handsomely for their services, so they can make a tidy profit for doing what our own systems of justice and politics seem incapable of. Think of it as a frozen version of Club Gitmo, only the inmates have verifiable identities and are serving defined sentences for actual convictions.

After Corzine and about one hundred others are actually seen serving sentences in the Icelandic pokey, OS predicts a new sobriety may overtake both bankers and politicians. A chill new wind would blow down both Wall Street and Pennsylvania Avenue.

Think about it, ya'll. It would cost a lot less than the price we've paid to date, and help Iceland as they poke a stick in the eye of EuroLand.

Eurozone? We Don't Need No Effin' EuroZone! Iceland Stands Tall, And Is Recovering

As Robert Peston so succinctly phrased it a few years back, the bankers and government of Iceland had essentially transformed the country into a large hedge fund, backed by the taxpayers (without telling them about it).

As these things always do, it all blew up, and instead of paying to bail out the bankers, and the politicians, and the Eurocrats, the Icelanders reverted back to their traditional life of freedom, told them all to stuff it, and got on with their business.

It worked. Which is why you hear so little news of it in general. 


Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.

Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.

Activists say the banks should go even further in their debt relief. Andrea J. Olafsdottir, chairman of the Icelandic Homes Coalition, said she doubts the numbers provided by the banks are reliable.
“There are indications that some of the financial institutions in question haven’t lost a penny with the measures that they’ve undertaken,” she said. 

It was painful, and to some extent still is. But no one from Brussels has arrived to install their own government in a defacto coup, as has happened in Greece and Italy.  Or, it may be argued, here.

Just sayin'...

Iceland Stands Tall--Banks And Depositors Must Bear Risks, Not The Taxpayers

Good for them!

By ASSOCIATED PRESS

REYKJAVIK, Iceland -- Icelandic voters appeared Sunday to have rejected a government-approved deal to repay Britain and the Netherlands $5 billion for their citizens' deposits in the failed online bank Icesave.

Partial results of a national referendum suggested the "no" side had gained more than half the votes -- a reflection of enduring anger over the economic havoc wrought by Iceland's risk-taking bankers.

Full results were not due until later Sunday. With partial results in from all six of Iceland's constituencies, the no side had almost 57 percent of the votes and the yes camp just over 43 percent.

"This is of course a disappointing result," said Prime Minister Johanna Sigurdardottir.

'...a disappointing result...'--but for whom?

The day is long overdue when the idea of 'risk' should be reintroduced to bankers, depositors, and borrowers. There is always the possibility that things might go wrong, since Murphy and his law are alive and well.

There is also the idea of 'moral hazard'. Lay the risk off to third parties, and an individual is allowed to behave recklessly. (Sound familiar?)

Here's a more formal definition:

Moral hazard arises because an individual or institution does not take the full consequences and responsibilities of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to hold some responsibility for the consequences of those actions.

In this case, British and Dutch savers had lost money when IceSave bank collapsed. Their own governments made them whole (because?), and attempted to stick the Icelandic taxpayer with the bill, threatening retaliation via the EU. Given the chaos created by the Euro, exclusion from that clown circus should be a blessing.

Next on the task list: Send the Prime Minister packing, along with the geniuses who put the country through the referendum in the first place. A few prosecutions of the bankers responsible might also prove invigorating for the health of the economy in general. It's good for everyone, top to bottom, to understand the concept of risk and the dangers of moral hazard.

Here's hoping the Irish take heart, and demand their bailout terms and EU participation be put to a vote.

OS likes fish. He'll be shopping for Icelandic cod this week...