Sinking Ship

I met this fellow at Mill Lake one day. His ship was sinking, literally, so he brought it back to shore (it was motorized with a remote control) and knew exactly what the problem was and how to fix it.

I thought of this as I listened to a fascinating interview a few days ago, with the President of Iceland. After the world economic crash in 2008, his country was more or less written off and it was predicted that it would be the first to default its national debt, even before Greece. It would become the Cuba of the north. After going to a referendum with his citizens, he undertook a plan that went against all current so called wisdom in the world of economy. He presented it to his debtors, England, the Netherlands and a handful of other EU countries. Under threat of having their international assets frozen, as well as other severe sanctions, he went ahead and let the three major Icelandic banks go bankrupt.

Since that time, there has been a rapid recovery of their economy, the IMF has pulled out, and they are projecting 3% growth for 2012!

Since "going to school" on the subject, I am convinced that this is exactly the route other nations should have taken at the time. "Too big to let fail" is an excuse that flies in the face of a true market economy. Look at where it has brought us.