The depreciation of króna is not a fall of króna. Compare dollar against euro exchange history. It is not that different from krona.

Actually, it is a blessing icelanders can now stop buying the latest gadgets.

Fundamentally, Iceland is facing a simple problem: population grew 2x in some forty years period.
Cod wars and energy brought prosperity decades ago but the fish stock is the same today as it was then. Energy production has increased but it is technically difficult to sell it.
All in all icelanders can not maintain the same living standard as before. It is not enough just to go a few miles into a sea any longer.

Most probably the answer is simple: Cod Wars period was unique, sort of golden age. One can not expect to maintain such a pace of growth indefinitely. The financial “miracle” of the last years just proved it.

Independence party started a privatization process thinking there are plenty of resources to divide and that they can be run more effectively by private parties. The issue is that those resources were accumulated over a period of time using a limited reserve of natural resources.
The economy did not reorganized into some magic high tech companies making money from other sources than energy and fish.
What is going to happen next is probably quite simple. A greater unequality, reduced pace of growth. Back to a normal live so to speak.

Based on other countries experiences I would get out from under IMF yoke ASAP… perhaps not immediately but don’t think they are a fairy godmother out “to help”. The history of their help is not that impressive.

as for fishing magnates, well. At some point they were forced to come back with FX. At least the news were such. Otherwise I do not think icelandic parties at power are that strong or even ready to try this major overhaul of distribution of national income. Commies are extinct spieces and let them stay such. After all the whole mess may turn out not that bad at the end of a day(a decade I’d say). No need to do more harm than is already done. State is not effective at managing resources, the USSR have proved that. State rule only works at especially tough periods and for a rather short time. Corruption is no less only that media’s mouse is closed so that no one knows the extent of it. Actually, this is what already happened in Iceland at some extent during the last decade. State dictate or oligarghs dictate – what’s the difference? For the people state dictate is somewhat more preferable by the way. It puts an end to oligarchs feud and makes rules clear. Jaja, I’ve already said too much.

But that only tells half the story. Most people I know have had to experience wage cuts, anywhere from 10-50%, depending on the situation. Meanwhile, inflation has heightened the cost of living and of course mortgages have gone through the roof.

The number of college students has also risen dramatically and they are not counted in unemployment statistics.

This has certainly been the case. I’m not sure that I believe his point about the Icelandic government not bailing out the banks though. After all, the current news is that they’re not going to have to bail out the banks as much.

I’m likewise not convinced that Iceland has been handling the crisis in a manner that he would, from my glance at his bio, approve. i.e. (and here I must confess to not having a cast iron case) protecting the private wealth of fishing magnates at the public’s expense. Or not; perhaps it is a price worth paying to avoid disruption to an already stressed economy? But that is precisely the argument applies to support bailouts generally.

but one can not beat the fact that unemployment is not that bad in Iceland given the extent of crisis.

Around 10% ( part of it are foreigners who have nothing to lose and icelanders who are not in hurry to take whatever job) is not that bad. One must compare to other nations which where involved (I say explicitly “were involved” not “have involved” ) in easy credit party.
By this I mean that an average citizen of many indebted countries has as much choice as well, Godwins’s right, an average german had under Hilter’s rule.

And, yet again, wouldn’t it be nice if someone could flesh out the case for and against IMF involvement rather than making pretty useless statements like this?

Or maybe I’m meant to think for myself? Fair enough, but I’m not a FUCKING ECONOMICS PROFESSOR TELLING ICELAND TO KICK OUT THE IMF!

(Sorry, I’ve needed to get that off my chest for a few months )

Anyway, a little selective quoting shows that the guy is clearly off his rocker:

“In an interview with The Irish Times , he said one of the most successful countries in dealing with the current global crisis was Iceland . . .”

although, to be fair, the rest of the quote is

“. . . because it hadn’t invested taxpayers’ money in its banks in the way Ireland is doing, and could devalue its currency.”
http://www.irishtimes.com/newspaper/finance/2009/1009/1224256255558.html