In the case of the Icelandic constitutional assembly elections, that would be the minister of interior. But try to tell that one to Ogmundur Jonasson.

After all, the call for constitutional reform was not just to change around a few words on a piece of paper. It was a demand for political reform. A new way of doing things, including politicians assuming more responsibility.

The most serious charge against the vote as it was carried out is that the ballots were easily identified by barcodes and numbers. A mind-boggling oversight on the parts of the organizers. Yet, things remain the same in Iceland. Blame is assigned elsewhere by anyone remotely connected to the execution.

But of course things are more complicated than that. The Supreme Court is part of what needs to reform. It might have had perfectly good reasons to overturn the whole election, but the way the justices have been appointed does little to enhance trust in the judicial system. It does not take a whole lot of stretch of imagination to question the motives of the three Independence Party insiders who ran and were the only ones out of 498 candidates who lost who saw reason to question the process.

There are no precedents of nationwide elections being ruled illegal in Iceland. There are six examples of local elections though, the most interesting being the one in Borgarbyggd in 2002, when outside ballots were questioned. In that case the Independence Party’s representative was against invalidating the result and went to court to try to overrule the decision. The vote was eventually repeated. The IP rep was one Odinn Sigthorsson, the very same who is one of the three who challenged the constitutional assembly vote.

And now they bark about money down the drain and that the whole thing should be called off.

The truth of the matter is that Iceland probably can not afford not to repeat the vote. This has to go through.

Because if there are going to be words on a piece of paper for politicians to ignore, it is better that those words are written by the people, for the people. Even if some of the people don’t care for that at all.

But if the current government is serious about reform, then one or two resignations every now and then will enhance its reputation in the minds of the 50% of Icelanders who currently do not put their trust in any particular party.

Related posts:

1. Skafti Hardarson Will Inherit Iceland
2. A Cause For Concern On Constitutional Reform
3. For Iceland To Get Back On Its Feet Important Reform Is Needed Within Independence Party

Well scratch away as the Employers’ Association under the leadership of the Independence Party’s Vilhjalmur Egilsson has threatened that it will not participate in pending talks on wage reform with the unions and employers associations unless the government reneges on its intentions to dismantle the current fishing quota system.

Blogger Jon Danielsson points out that this would be an understandable demand from the Fisheries’ Association, but from the Employers’ Association it makes little sense. It only counts 190 out of 2.426 of the businesses it represents as fisheries or 7.8%. Of the 56.100 employees working for their members, only 4.700 or 8.4% are with the fisheries.

The fisheries stance on the wage negotiations and the support they get from the Employers’ Association  means that more than 90% of the employers working for the latter’s members will have to wait for better pay for a while yet.

About half of them will probably succumb to some libertarian slogans and nationalistic rhetoric and end up believing that this is how things are supposed to be.

And that is how things really work in Iceland.

Related posts:

1. The Monkfish That Destabilized Iceland
2. Dirty fish at HB Grandi
3. Why Iceland Continues Whaling

This all remains to be seen and the real effects will probably not be known for another twenty years. But the political manouverings of Indefence are interesting to say the least. Here is a non governmental organization which has sprung forth in two years as a major policy influencer. How and why? Remember Bjarni Benediktsson’s conversation with the US Embassy?

Bendiktsson said that, in an attempt to force the issue into the courts, he intends to oppose the government-sponsored Icesave bill when it comes up for a vote in Parliament.  (Note:  Benediktsson, along with most of his

opposition Independence Party colleagues, abstained when the previous law was passed in August.  End note).  He acknowledged, however, that the coalition government probably had the votes necessary to pass the measure through parliament.  He also admitted that, were he to have his way and the bill fail in parliament, it could further stall Iceland’s recovery efforts.  It would certainly mean no further loans from the IMF and, without that cash inflow, the government would be unable to lift its capital control restrictions and would likely have to issue Euro bonds to raise the necessary capital.  He also said he was not anxious to assume leadership of the government, but preferred to remain in opposition until after the May 2010 municipal

elections to benefit candidates from his party.

So how about this from the opposition political leader? First we will throw any obstacle we can in the way of the government so that it is weakened in the eyes of the voters. Secondly we will use this to ride a wave of discontent back into the seats of power. Thirdly, it does not matter whether the nation as a whole suffers, as long as the party is back on its feet.

But how do the two most unpopular political organizations of 2009-2010 go about advancing their agenda? Supporting and influencing an organization battling vehemently against key issues for the government would seem like a good idea. Indefence anyone?

Olafur Eliasson of Indefence has scoured internet forums and blog comments to deny this. He maintains that the group’s agenda is to prevent the people of Iceland assuming massive debts which will hinder prosperity in Iceland’s future. He states that himself and Agnar Helgason had the original idea of creating the Indefence group and have fought to keep it bipartizan in nature.

It would be imprudent to accuse those two of holding political beliefs which they might not, but it is hard to look past the company they keep. Amongst the first prominent Indefence members was Sigmundur David Gunnlaugsson, who soon thereafter assumed the leadership of the Centre Party. He has now hired Johannes Skulason, another vocal Indefence member to be his assistant. Another, Magnus Arni Skulason has held positions on behalf of both the Independence Party and the Centre Party. Eirikur S. Svavarsson is a pronounced supporter of Gudlaugur Thor Thordarson, the former IP minister who was instrumental behind the giant donations the party got from Landsbankinn and FL Group in 2006. Lawyer Helgi Ass Gretarsson has been one of the most active legal supporters of the current fishing quota system so precious to the Independence Party and the Centre Party and Sigurdur Hannesson represented the Centre Party on the committee on foreign investment last year. Least we forget the “invisible member” of Indefence, David Blondal who is the son of one of the Independence Party’s most vocal members of Althingi Petur Blondal.

Perhaps Olafur Eliasson and others were working in good faith in something they absolutely believed in. But one lesson from Indefence and the events of 2008-2011 in Iceland is that in democracies, NGO’s can influence national policy and adapt it to their goals.

The only question is, who elects them to do so and whose agenda are they pushing?

Related posts:

1. InDefence: Request For A Meeting With The Dutch Finance Committee
2. IcelandTalks: The Indefence group, Kaupthing and the Progressive party
3. From The Ashes, Dirt Rises With New Iceland

TREASURY FOR MYERS AND NORTON
NSC FOR HOVENIER 

E.O. 12958: DECL: 11/13/2019
SUBJECT: INDEPENDENCE PARTY LEADER SEEKS MEETING WITH WHITE
HOUSE TO DISCUSS IMF 

Classified By: CDA SAM WATSON FOR REASONS 1.4 (B) AND (D) 

1.(C)  Summary. Charge d'Affaires (CDA) met Bjarni
Benediktsson, leader of the opposition Independence Party, to
discuss a range of issues on November 11.  Benediktsson was
eager to discuss a letter that he had sent recently to the
National Security Council (NSC) requesting a meeting with a
senior White House official.  Were he to receive such a
meeting, Benediktsson said he would express outrage with how
the IMF was used as a tool against Iceland in the Icesave
dispute.  He also would like to talk about future
opportunities for bilateral cooperation between Iceland and
the United States.  End Summary. 

Frustration with the IMF,s Role in Icesave
--------------------------------------------- -
2. (C)  Charge d'Affaires met opposition Independence Party
Chairman Bjarni Benediktsson to discuss a range of issues on
November 11.  Benediktsson said that one reason he hoped to
meet a high ranking official from the White House was to
express frustration with the role the IMF played in the
Icesave dispute. He opined that the Icesave matter was,
originally, an issue that involved only the
Governments of Iceland, Great Britain and the Netherlands.
The dispute among the three countries, he said, centered on
whether the Icelandic government must serve as guarantor for
British and Dutch depositors that lost money when the
Icelandic banking system collapsed.  There was no EU
legislation, according to Benediktsson, that obligated
Iceland to act as such a guarantor and legal precedents on
the topic were murky at best.  Great Britain and the
Netherlands, he said, understood that they were not operating
from positions of strength and brought the IMF into the
equation to force Iceland's hand.  The threat of withholding
IMF loans until the Icesave dispute was resolved was used to
force the Government of Iceland to capitulate.  It was, he
contended, a great misuse of the IMF and completely unfair to
Iceland. 

3. (C)  Benediktsson suggested that, at this point, the best
thing that could happen for the Icelandic people would be for
the measure to fail in a Parliamentary vote.  The British and
Dutch would then, he said, be forced to sue the Government of
Iceland and seek compensation via the courts.  A legal
solution would, he felt, be more preferable than the
negotiated settlement that is being thrust on the people of
Iceland.  Benediktsson added that if the British and Dutch
did not feel comfortable pursuing the matter via Icelandic
courts, he would be happy to suggest that the issue be
resolved by a tribunal of independent judiciaries.  He even
suggested that a U.S. Supreme Court Justice could play a role
as an arbitrator in the proceedings. 

4. (C) Bendiktsson said that, in an attempt to force the
issue into the courts, he intends to oppose the
government-sponsored Icesave bill when it comes up for a vote
in Parliament.  (Note:  Benediktsson, along with most of his
opposition Independence Party colleagues, abstained when the
previous law was passed in August.  End note).  He
acknowledged, however, that the coalition government probably
had the votes necessary to pass the measure through
parliament.  He also admitted that, were he to have his way
and the bill fail in parliament, it could further stall
Iceland's recovery efforts.  It would certainly mean no
further loans from the IMF and, without that cash inflow, the
government would be unable to lift its capital control
restrictions and would likely have to issue Euro bonds to
raise the necessary capital.  He also said he was not anxious
to assume leadership of the government, but preferred to
remain in opposition until after the May 2010 municipal
elections to benefit candidates from his party. 

Increased Bilateral Cooperation with the U.S.
--------------------------------------------- --
5. (C)  Benediktsson also hoped to discuss with the White
House ways to promote bilateral discussion and cooperation
between the United States and Iceland.  He said that when the
U.S. withdrew from the Keflavik Air Base in 2006 it created a
public perception that the relationship between Iceland and
the United States was deteriorating.  This perception, he
suggested, has only been enhanced with Iceland's recent
application to join the European Union.  Benediktsson
acknowledged that the Strategic Dialogue allows for annual
high level meetings between U.S. and Icelandic government
officials.  He felt, however, that even more dialogue was
necessary.  Benediktsson was somewhat vague with suggestions
on how to accomplish this but suggested that the Parlimentary 

REYKJAVIK 00000203  002 OF 002 

Foreign Affairs Committee visit the United States.  He then
asked whether, considering Iceland's current financial
problems, there might be some U.S. financing available to
facilitate such a trip.  (Note: Benediktsson later sent CDA a
follow up email expressing continued interest in meeting with
an official from the White House even if he came alone. End
note.) 

6. (C)  Comment:  Benediktsson continues to seek a meeting
with a high-ranking  White House official to discuss
increased cooperation and the IMF vote even though IMF board
review vote is long past.  His request may be a political
ploy designed to embarrass his opponents in the government
and make waves in the media.  On the other hand, it could
also fit into the agenda of his Independence Party, an
organization which has traditionally supported strong ties
with the United States and fiercely opposes Iceland's
application to join the EU.  Given his proposed solution on
Icesave, namely send it to the courts, his angle appears more
likely political than economic.  End comment.
WATSON

Related posts:

1. The Drunk In The Pond
2. Complexity Of IceSave Too Much For Althingi?
3. Ogmundur Resigns Amid IceSave Chaos

1. There was a demand of reform in the fishing industry. It was needed because the resource was gathering in the hands of very few who in turn used their wealth to borrow intensely against it and invest in other sectors. The profits of the sector have increasingly been disappearing abroad. Oh and the UN Human Rights Council had condemned the system and claimed it was in violation of human rights. The new government indicated that reform measures would be taken. Then it appointed a reform committee dominated by industry lobbyists and politicians whose career depends on the industry. The result..a fucking fuck solution which benefits the…fishing industry.

Finnbogi Vikar, a member of the committee delivered a special opinion. “As I have said before, the appointment of this committee was a mistake because from the beginning it was clear what the result of the majority would be. One needs only to examine the interests behind the members of the committee to realise that most representatives of the wage-earning public and employees in this country have long ago taken a stand with the representatives of the largest organizations of employers and against the public’s interests after the collapse of 2008. Together these parties form a formidable power-bloc which controls a great deal in our society with the bloated undemocratic pension funds behind them. It is unbelievable that there is no demand to be made of the political parties and the politicians on this committee that they reveal the amounts donated to them from interest groups in the fishing sector in recent years.”

2. There were demands of constitutional reform. Iceland copied the Danish constitution in1944 and then Althingi neglected review and reform for decades on end, despite promises and indications otherwise. Reform is for example needed in clearer seperation of the branches, re-examination of the role of the president and timely separation of church and state. Althingi is stuttering through with a constitutional congress for which elections are supposed to be held in the autumn. The way appears clear for demagogues, special interests and representatives of the politicalparties to deliver a loud and argumentative debate and a fucking fuck result.

3. There was outrage over campaign finances. Political parties and members of Althingi were awash in cash from the finance sector, the energy sector, the fishing sector to name a few that their loyalties were not just questionable but plain obvious. The way politicians bent over backwards to exploit public utilities for the benefit of shaky corporations and ignore regulation for the suicidal financial sector left a bitter taste in the mouths of voters stuck with higher utility bills and monumental sovereign debt. So a campaign finance reform committee was created and its results are an almighty erect middle finger in the fucking fuck direction of those voters. The party‘s don‘t want real change and have just made some minor inconsequential changes.

The Movement‘s announcement. “This issue is a clear example of how Althingi is not going to consider the work of the Special Investigation Committee and its conclusions. The eight chapter of the committee’s report is named “Morality and procedures connected to the collapse of the Icelandic banks in 2008”. In Chapter 2.3 it says “One of the most obvious tool of the business sector to influence politicians are direct donations, both to parties and individuals.” The conclusion of the chapter is where conlusions are drawn and the lessons of the past are examined. “Ways to draw a clearer line between the financial sector and the political sector must be found. It can not be tolerated that the guardians of public interest act on the behalf of private companies in such a manner as was done in the event of the banking collapse.” With this new legislation, Althingi has rejected the conclusions of the part of the Special Investigation report which criticizes harshly the connections of poltical parties to the business and financial sectors. Unfortunately the financial interests of the four parties are placed above the publics. Democracy and transparancy are of little use against the mixed up priorities of those in power.

4. There was great displeasure with the president, Olafur Ragnar Grimsson who had opened the doors of the presidential office to the bankers and financiers who in turn jetted him around the world to open doors to global business. The president had become a caricature who had brought the reputation of the office down. Then he managed to somehow please the special interest group InDefence by approving their call for a national referendum on sovereign debt and won some credibility back with the increasingly xenophobic, scared and confused public. So he still occupies the office, trying to reinvent his damaged image to the amazement of observers. A president who owes his people is suspectible to participate in plenty of fucking fuck demagoguery.

5. It became clear in the banking collapse that on the global stage Icelandic politicians had neglected making friends, forming alliances and providing shelter for their citizens. Timothy Geithner laughed at advances made by David Oddson, the Nordic countries offered concerned but sound advice and Britain offered solutions. Instead Icelanders followed the lead of the Independence Party‘s leaders and decided to sulk, play the victim and accuse the international community of a siege. When things were coming to a heat, the Social Democrats delivered a plan that could restore Iceland‘s credibility abroad and solutions to the volatile currency and mounting public and national debt. An application was made to join the EU. And then the xenophobes, cold war relics, special interests and racists hijacked the debate to the point that grown up, educated people want the IMF out without any alternative solutions to Iceland‘s currency and debt problems, a national referendum designed to exit NATO without any alternative solutions towards Iceland‘s defences and to retract the EU application without ever having to offer alternative plans to restore Iceland‘s economic viability and international credibility. Meanwhile in the real world, Iceland recently dropped almightily the World Economic Forum‘s Report on Global Competetiveness as far as macroeconomic environment goes and is ranked number 138. The Independence Party, the Centre Party and the Left Greens have offered no solutions or propositions on how to restore Iceland‘s standing. They are currently getting away with spewing venom all over the only realistic and credible plan available. Oh and fucking fuck IceSave is still unresolved.

6. The media came under plenty of scrutiny for not delivering scrutiny at all. Now it is in the hands of Jon Asgeir Johannesson and David Oddson. Editor in chief David Oddson even has the nerve to accuse the State Broadcasting Channel of bias because a reporter there is the sister of Exista‘s CEO, implying that her media can not be trusted with delivering news. Apart from maybe DV, the media is worse than before. When investigative reporting was needed, Channel 2 cut theirs from the program and gave the nation cooking lessons from the wife of Baugur‘s head of finance. Agenda, propaganda and fucking fuck through your mailbox and television screen every day.

7. There were loud calls for debt reform through restructuring and write-offs. For a moment, people actually believed that those who had accumulated the greatest debts would have to pay the most. Then reality bit hard and cold. The government‘s promise of a fortress around Icelandic households ended up in solutions which benefitted those who had geared themselves the greatest. Those with a 100-200% mortgage were bailed out, especially if they could find members of Althingi willing to do their bidding within the banks. Those who had saved and put down payments on their homes were left to rot with their inflated debt. And what about Jon Asgeir Johannesson, Bjorgolfur Thor and their kind? Well they have so far managed to score deals with the banks on massive write offs domestically so they can manouvre deals where they can get back their companies abroad. And they have been granted stand-still agreements where their debt collects no interest and is not gone after either. Many of the same people are still main actors in the business sector. Bjorgolfur Thor has been seeking tax-exemptions while wage-earners are experiencing higher taxes and higher utility bills. Did you think Sigurdur Einarsson, wanted by Interpol a few months ago was here to be questioned the other day? No he was here in talks to buy a fucking fuck financial institution.

8. There was need for someone to hit the refresh button in the political arena but so far it seems like the old guard has gotten away with a restart. The Social Dems were and still are unable to find anyone with remotely the same political credibility as Johanna Sigurdardottir. The ladder below is crowded with wallflowers and followers of men. If Johanna has enough then it does not bode well for the only party with a plan for the nation. Meanwhile the Independence Party, Left Greens and Centre Party are ablaze with infighting. All three parties are currently letting the monkeys run their circus and if it were not for Steingrimur J. Sigfusson‘s incredible turn from idealism to realism then all bets would probably be off. But it says all about the unruly waters of Icelandic politics that isolationist xenophobe Ogmundur Jonasson has had to be brought in to the government again to appease his followers. The Centre Party is currently in suicidal mode as requests for rampant demagoguery is fully provided elsewhere. And then there is the Independence Party which freed from the oppression of David Oddson almost managed to start a self-examination and reconciliation process, only to fall prey to the rampant partisanship and playground politics of their great leader again. The party‘s ladder is also crowded with hungover leftovers from the heady days. The only realistic challenger to the madness is former vice-chairman Thorgerdur Katrin Gunnarssdottir who has the financial freedom thanks to the former banks and little political reputation left to lose. New pretenders on the political scene have been pushed out by the Citizen‘s Movement which collapsed in record time and the Best Party‘s moves are under relentless attack from the four parties. It is not just an economic crisis anymore but an all out fucking fuck political crisis.

9. According to rumour there are people preparing to take the law into their own hands this weekend if the parliamentary committee charged with determining the responsibility of the elected officials named in the Special Report this spring comes up with a fucking fuck whitewash. It is to the Icelandic nation‘s outstanding credit that not one of the politicians or the businessmen most responsible for the ponzi economy which collapsed has been physically hurt so far. But it is to the incredible detriment of the political system‘s inability to appropriate blame that ordinary Icelanders are being heard in private conversations saying that “If I do it alone then it is murder, but if a group of us do it then it is a revolution. I am too angry.” The government and Althingi apparently now must be careful. An indebted and outtaxed public might cross new boundaries if they continue seeing Jon Asgeir and Bjorgolfur Thor parking their Range Rovers in Laugavegur, if Sigurdur Einarsson returns to Icelandic banking or if David Oddson claims his kingdom back. Lady Justice is in a fucking fuck pickle in Iceland these days.

10. The public is currently in an all-encompassing state of fucking fuck delusion. Serious, well meaning, well educated people are discussing between themselves in “revolutionary” terms. Yet, they still buy Morgunbladid, access Jon Asgeir‘s cable TV, vote for the Independence Party and nod when Ogmundur Jonasson talks of Nazi Europe. Currently letters are going out to 1.000 Icelanders selected for a National Meeting on constitutional reform. Yet again, a simulated process is given priority over weighty substance in the national debate. The public has already been lead on a ride by the Citizens‘ Movement (guilty), the National Meeting (not guilty), national referendum on IceSave (not guilty) and the Gudmundur Franklins‘ of Iceland are only beginning. Instead of taking responsibility for getting to know the issues of today, voting responsibly and holding their elected officials to their words, people are talking revolutions, Right Green parties and secession from NATO, EEA and the civilized world. Good, sensible people seriously need to start taking a stand in the fucking fuck that is Iceland.

Related posts:

1. The Icelandic Discourse in A Nutshell
2. Blue Handballs and Tackles From Behind
3. Iceland Will Say No To The EU

It seems like Bjorgolfur Thor and Jon Asgeir Johannesson are going to be the two people who hold the reins in Icelandic business once the dust has settled. Their creditors including Landsbankinn and Arion seem to be competing for who can pay them more for writing off their debts (proving the old if you owe the bank a million then you are blah blah, if you owe the bank a billion the bank is blah blah).

The Independence Party is scoring highest in the polls (No, Icelanders do not understand cause and effect).

Ogmundur Jonasson is back in the government and Jon Bjarnason keeps his place (it pays to be a bully, ask David Oddson).

Tryggvi Thor Herbertsson and Gudlaugur Thor Thordarson are criticizing the government for covering up economic failures (although to be fair they should know a thing or two).

Thorgerdur Katrin Gunnarsdottir is back in Althingi (after a 900 million krona bullet loan mishap) .

Arni J. Sigfusson, the mayor of astronomically bankrupt and thoroughly corrupt Reykjanesbaer is begging for a bailout in the form of an aluminium smelter.

And the church is mending broken souls with a poster campaign (so both of its attendees can read about how abusing people is bad on the church’s wall…next to the toilet).

Is it 2007, 2003, 1983, 1528, a groundhog day or a bad dream?

Related posts:

1. Finally Debt Relief…For Independence Party MP
2. Two days later – our homes are at risk
3. An Independence Party Split?

The award is called the Kjartan Gunnarsson Freedom Award and it was presented by the youth association of the Independence Party at the party’s headquarters.

Kjartan Gunnarsson you may recall was the CEO of the Independence Party who simultaneously sat on the board of Landsbankinn, the bank responsible for IceSave. You might also remember how the Independence Party government of David Oddson handed Landsbankinn to its preferable owners, Bjorgolfur Gudmundsson and Bjorgolfur Thor.  And you might not have forgotten about the 25 million ISK donation that Landsbankinn gave the Independence Party days before it enacted new campaign financing laws.

Amongst the guests, Independence Party MP Petur Blondal, the proud father of one of InDefence’s most active members.

It hardly gets more absurd than this crowd.

Related posts:

1. Independence Party = Enron
2. An Independence Party Split?
3. The Independence Party’s Successful Projection Of Baugur and IceSave

But with reserves of unsold whale meat mounting and a minuscule market for the meat, it is quite reasonable to oppose whaling on economic grounds. The business case has always been puzzling, but it might not be a question of money for meat but something more real-political.

The real reason why Iceland is still whaling is because  politicians and businessmen who want nothing to do with Iceland in the EU find it convenient.

Outgoing fisheries minister Einar K. Gudfinnsson of the Independence Party poured the poisoned chalice on his last day in office before his government was chased out by its citizens for general ineptitude. The Left Greens inherited the ministry and have not reversed the course. The current fisheries minister Jon Bjarnason is a staunch anti-EU politician.

The guardians of the old system do not let go so easily.

Iceland’s whaling is going to lead to confrontation in membership talks with the EU. The EU is going to demand that Iceland stop hunting whales and the anti-EU lobby is going to shout from every rooftop about lost sovereignty and a bullying empire when it does.

And that is why Icelanders still hunt whales.

And confuse them with fish like Kristjan Loftsson, the primary whaling lobbyist:

“Whales are just another fish”

Related posts:

1. Why Whaling In Iceland?
2. Why whales?
3. Questions on whaling

Earlier this week, a Social Democrats insider Andres Jonsson pleaded to the “moderate section” of Independence Party to meet them on the issue of the EU.

It is understandable that some of the Social Dems should cast their glance to the right. It is not far off politically from their own position and they probably believe that it is easier to get things done with “moderate” Independence Party members than with the “wild left” of the Left Greens. Planned shake ups in the government indicate that room has to be made for Ogmundur Jonasson. With Iceland a political and economic china shop, the Social Dems are obviously hesitant to let that bull in.

The trouble is that the “moderate section” of the Independence Party is still as paralysed as the Left Greens and the Centre Party as far as reform within their own party goes. Only a few elders and a couple of “unruly” members have yet to stand up to the corruption and xenophobia which David Oddson and co. have installed in their ranks. The so-called moderates are in some cases badly damaged themselves, like former minister Thorgerdur Katrin Gunnarsdottir or stuck there through emotional, social and nepotist ties like Benedikt Johannesson and Thorsteinn Palsson.

Letting the Independence Party in without a serious clean up instigated by members of the party would be a big mistake. Reykjavik city mayor Jon Gnarr of the Best Party has now explained why. He ran on a novel platform where all the “animals in the forest were supposed to be friends” and offered an olive branch to Hanna Birna Kristjansdottir, the Independence Party leader by including the opposition party on a scale never before seen.

Last night in the “Mayor’s Diary” on Facebook, Jon Gnarr wrote: “I feel like I am naive, can not handle this or do this in a beautiful way. I doubt that I can work with the Independence Party. I feel like I am showing humility, but all I get in return is hot shot arrogance or lack of interest. Should I also stop smiling or keep trying to make friends with these people who do not respect me or what we are trying to achieve.”

People who think anything different would happen with the Independence Party in a coalition government are more naive than Jon Gnarr. Besides, have the other parties not learned anything from the past twenty years? The original Social Democratic Party became a deflated balloon after being in cohort with David Oddson from 1991-1995. The Centre Party used to be able to claim half and half of the corruption spoils with the Independence Party and scored around the thirties a decade ago but is so badly damaged that it can hardly claim a tenth today. The Social Democrats were seen as the antithesis to the Independence Party until 2007, when it became too impatient to wait anymore for its place at the power tables and joined hands. Imagine the clout the Social Democrats would have had in the clean up after 2008 if Ingibjorg Solrun Gisladottir had refused Geir Haarde’s kiss of death?

Bad things happen when good people let the Independence Party assume power.  Jon Gnarr is not a politician by trade, which is encouraging in these times. But the tension between the Social Democrats and the Left Greens could inadvertently open the door for the unreformed Independence Party.

Some people still fail to see the difference between affectionate word and kisses of death.

Related posts:

1. The Icelandic Discourse in A Nutshell
2. The War Begins
3. The Independence Party’s Successful Projection Of Baugur and IceSave

Tyler Durden at ZeroHedge points out this video of Columbia University economist Fredric Mishkin who has changed the title of his 2006 pen-for-hire paper on Iceland’s economic state from Financial Stability in Iceland to Financial Instability in Iceland.

Some time ago we penned a post, titled”Mishkin On Iceland: “Nothing Is F*#&ed Here Dude” which discussed the former Fed director’s March 2006 analysis “Financial (IN)stability in Iceland”. Those interested in our original observations of Mishkin’s horrendous analysis (of what proved to be the first bankrupt European country of the new century, but certainly not last) can find them at the original link. Yet continuing with the Duderino references, today, new shit has come to light, which once again confirms that not only is the Fed populated by the most intellectually incapable and corrupt people, but that anything coming out of Columbia University (and the Ivy League in general) is not worth the paper it is printed on. Watch the attached clip to see a former Fed director go from comfortable, to fidgety, to stuttering, to thoroughly discredited, to in dire need of diaper change, in under 2 minutes. Last but not least, here is the soundbite of the year: “You have faith in the central bank.” No further comment necessary.

Why would a noted professor who wants to be taken seriously do such a thing?

Probably because he should try to distance himself as far away from the reality that his report was commissioned by the Chamber of Commerce in Iceland as a false reply against an avalanche of criticism which hit Iceland financial world in 2006. Mishkin got paid $124.000 to write the report with then Independence Party economist for hire Tryggvi Thor Herbertsson. If Mishkin had done any independent research he would have quickly been aghast at the foreign debt accumulating, the bubble forming

My belief is that he actually only lent his name. The wording of the report looks suspiciously like it originated from the Chamber of Commerce’s spin machine. It would be

interesting to hear how much time Mishkin spent on the report, which documents and statistics he researched and who he spoke to.

Like Transparency International and the damned ratings agencies, Frederic Mishkin failed enormously in getting below the surface of Icelandic politics, history and financial markets.  Danske Bank, Merrill Lynch and the IMF did not. They rung the alarm bells.  Robert Z. Aliber and Robert Wade did as well. The analysis of the former lead to the chairman of the Icelandic Financial Services Association threatening professor Thorolfur Matthiasson that he would never get any grants from the group again for bringing such a man into Iceland.

Hopefully Mishkin held on tight to his $124.000. Within three years they had doubled in value in Iceland.

Let us hope Mishkin’s students grill him on the subject if anyone is still listening.

Here is a check-list which they would be well advised to bring to class.

1. How much time did you spend on the report?

2. Which documents and sources did you use to reach your conclusions?

3. Did you know that your co-author Tryggvi Thor Herbertsson was a trusted member of the ruling Independence Party?

4. Did you know the IP had appointed its former head as Central Bank governor, with no background in economics at all?

5. Did you understand the close ties between the movers and shakers in the IP government, the Central Bank, the Financial Authority, the Chamber of Commerce and the banks? If so how could you reasonably claim academic integrity behind the report?

6. Did you understand the power struggles between the Central Bank governor and some of the largest owners and executives of the Icelandic banks?

7. Why did you report contradict noted researchers at Danske Bank, Merrill Lynch and IMF? Was the report made to order?

8. Why did you not reveal the large payment you received from the Chamber of Commerce in the report? Did you get any other amenities paid for, such as reindeer hunting trip in Iceland with your co-author?

9. Why did you change the name of the report on your CV from Financial Stability in Iceland to Financial Instability in Iceland? How would you react if your students did such a thing?

10. As a professor how would you grade the report in light of recent events in Iceland?

The report:

Related posts:

1. Frederic Mishkin’s Role In Iceland’s Collapse
2. Mishkin for sale
3. MP’s Two Million ISK Payment For Mishkin Report