Iceland and Capitalism

Paul Krugman describes Iceland’s “great economic disaster stories of all time” in his post which I described in the article above, and I’m not sure if he is being ironic or if he doesn’t really realize how closely he is describing his own country. He says that their economy was,

…hijacked by a combination of free-market ideology and crony capitalism; one of the papers (pdf) at the conference I just attended in Luxembourg shows that the benefits of the financial bubble went overwhelmingly to a small minority at the top of the income distribution.

That sounds familiar. Are we sure he’s talking about Iceland? He finished,

And in the process of building short-lived financial empires, a handful of operators built up enormous debts that their fellow citizens are now expected to repay.

We would never do anything like that in this country, would we?

What happened is interesting, though. The “are now expected” that Krugman uses should actually be “were expected” because the Icelanders refused to pay up. They rioted in sort of a, “Hell no, we won’t pay,” reaction and physically threw the bankers and crony capitalists out of their offices.

In this country, not so much. I’m not really sure the general public is even aware that such debt exists, let alone who is expected to pay it.