“The public opinion is powerless, because the public’s values all point towards pity. A shroud is wrapped over everything, where care might be the material but carlessness is definitely sown in. ” – Sigurdur Nordal, Skirnir 1925
These words of Sigurdur Nordal which were brought up on Silfur Egils today are apt. At the time they were written to explain the corruption that was allowed to flourish in Icelandic society.
It is now just over four months since the economic crash and for some reason a lot of people one talks to seem to be thinking the worst is over. Yet all signs point towards the fact that we have only seen the top of the iceberg.
We now know that there are thousands of empty homes in Iceland because the contractors, financial institutions and the local governments did not care to monitor the massive construction underway in the past few years and the effects it would have on the housing market for years to come.
We now know that the government, no matter which parties occupies its seat does not understand the injustice of borrowers having to shoulder the responsibility of keeping inflation down by themselves, without any help from lenders. What price-indexation has given to the Icelandic public should be tried in court as a crime against humanity.
We now know that those who owned the banks and the largest companies in Iceland took a lot of money and ran off with it to the Caribbean and Luxembourg. We also know that even though they might lose a company or two, they are in prime position to gain others on the cheap.
We know that the Central Bank’s interest rates have had adverse effects on inflation for years. In an open economy where foreign loans have been so available, the lofty interest rates have forced businesses to roll the costs of their own borrowings onto their consumers, therefore maintaining high inflation. Icelandic interest rates since the Central Bank set itself inflation goals are the exeption that proves the rule that everything that goes up must come down.
We now know that there is going to be an ideological nuclear battle in Iceland for the next 5-10 years. The main culprit will be those who became filthy rich during the last few years and a certain elite within the Independent Party. Meanwhile, important issues for whole generations will suffer.
I predict that we have five years of economic turmoil ahead of us, and ten years of political and social turmoil. They might be necessary for future generations but none of us who are going to go through them are ever going to get them back.