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Forum Post: "Just Say No To Corporate Greed ; The Case Of Iceland", by Ellen Russell.

Posted 2 years ago on Feb. 28, 2012, 10:42 p.m. EST by shadz66 (19985)
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February 28, 2012 "Rabble" ( http://rabble.ca/columnists/2012/02/just-say-no-corporate-greed-case-iceland ) -


"Capitalism is looking pretty mean these days. No amount of profit is enough, and no level of collateral damage to get that profit is unreasonable. And when capitalism on steroids runs amok, any extremes of public pain are justified to save the butts of those who made the mess in the first place. Corporations understand that they have a green light to punish people ruthlessly for even a modest improvement to their bottom line (ask Caterpillar workers if you want details). Whole nations may be bled dry to shield financial institutions from the consequences of their own bad behaviour. The Greek government is deliberately creating a national great depression to appease international financial interests.

Happily there are some instances of people saying no to this madness. Iceland is a great example of people who stood up and fought for civility.

Iceland used to have a sound but not too adventurous government-owned-and-operated banking system. It more or less did what it was supposed to do to serve local needs. An orgy of neo-liberalism in the 1990s culminated in the privatization of the banks in the late 1990s and early 2000s. The mavericks who took control of the newly privatized banks took corporate greed to extreme levels. They caught the worldwide disease of speculative euphoria, and made immense profits as the country's banks started doing some pretty crazy stuff.

Financial journalist and former investment banker Michael Lewis offered one financier's apt depiction of the hocus pocus that was going on in Icelandic banks: "'you have a dog, and I have a cat. We agree that they are each worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners, but Icelandic banks, with a billion dollars in new assets.'"

This lunacy was largely fuelled by borrowed money. Iceland's top three banks went on such a pathological borrowing spree that their assets were 10 times Iceland's GDP. It doesn't take a genius to realize that this loony behaviour will end badly. When the speculative bubble burst, all three of the country's major banks