The final cry of the last Thatcherist

A very interesting story broke on RUV (Icelandic state TV) in the show Kastljós (Spotlight) yesterday evening.

In short: According to RUV reporters, a report from a former banker at Landsbanki shows that the fall of the Icelandic krona was mostly a domestic issue. It had been said time and time again that foreign hedge funds attacked the Icelandic currency and brought it down to make money out of it. Similar to what George Soros did when he tried to devaluate the British Pound in 1992. This was the main talk of the town, and held to the media and to the public when the whole house of cards came crashing down in late 2008.

According to the RUV report the banks are mostly to blame. That was pretty obvious to all those who wanted to know, but the interesting part is that when the author of the report claims that the Central bank under the leadership of David Oddsson (he led the bank for the last few years before the collapse) failed on a catastrophic scale and in that sense, gave the banks permission to control their own foreign currency flow, when the Central bank should have tightened the hold on the banks.

the shadow of David OddssonThe former banker claims that the Central bank failed mostly because of political corruption, in the sense that the bank directors and board members were hired in on political grounds rather than on professional merit.

This is well known here in Iceland. David Oddsson did a “Berlusconi” and appointed himself as the bank manager before retiring from the position of Prime Minister. Most of the board members were and still are his best friends and the ideological thinkers of the Independence party. Their ideology, a hybrid of Leo-Straussian neoconservatism, and local corrupt politics and favouritism with a dash of Hayek. Even Davíð Oddsson was hailed as the best hope of liberalism in Europe, and said to be the last “Thatcherist” by the NeoCons back in 2004. Back then, that was a huge compliment for the right wingers of the world.

The great hope of liberalism in Europe (Davíð Oddsson) managed to manipulate the whole system in Iceland, and rule by the iron fist of the “blue hand” of corruption (called the blue hand after the Independence party colors). His legacy and that of the blue hand is Iceland as it is today. the blue hand

The great hope of liberalism has said many times in his own newspaper Morgunblaðið, which he is the editor of now, that he warned the Icelandic government time and time again of the pending doom of the Icelandic economy. In his own mind that is probably true, but nobody else has heard of this.

His warnings seem all to be in his mind, for this report by the former Landsbanki specialist seems to clearly show that instead of doing anything to stop the madness, the Central bank under Oddsson simply cast fuel to the fire. In a less poetic language the correct term is deregulation, a term used when the rules are stopping the marked to control itself, according to Hayek and others, who believe that the market will correct itself and find the best solution to all problems by self regulation and no watchful eye of governments or other regulatory institutions.

This belief and I stress that this has no facts behind it, only a theory based on belief instead of academic research. This religious system has been taught for 40 years in business schools all over the world, and Davíð Oddsson and his band of ghouls preached this with the same intensity as a “born again christian” from Texas.

To get back on the issue at hand, the media is split when covering this massive story. The same media as fed us public with stories of foreign hedge funds, misunderstandings and other misleading facts about the economic collapse are strangely silent.

RUV broke the story last night, then Eyjan and its star reporter Egill Helgason has reported about it. So has DV newspaper and the Business newspaper Viðskiptablaðið. But Morgunblaðið under Oddsson has not reported a single word about this. The blogsphere is up in arms about this story as well.

So the final cry of Davíð Oddsson, the last Thatcherist is not loud, explosive or misleading. It is a screaming of pure silence.


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