Political Reverberations of the Financial Collapse

Iceland has just voted out the Conservative government which set up and encouraged the unregulated "free market" economy that led to the banking collapse in that country and it huge international debt.

Here are a few interesting tidbits from the NY Times article by John F. Burns. I've bolded key bits:

It would also confirm a remarkable turnaround in the political fortunes of Johanna Sigurdardottir, the 66-year-old caretaker prime minister, who is the first woman to lead Iceland’s government. Only months ago, before January’s turmoil, she was readying herself for retirement after 30 years in politics and was widely seen as too feisty, and even too left wing, to rise beyond a series of midlevel coalition cabinet appointments.

Ms. Sigurdardottir is notable, too, for being the first openly declared lesbian to lead a government in the modern world, though her sexual orientation was never a significant election issue. What Icelanders say they like about her, as much as anything, is the way in which she embodies everything the New Vikings did not: a quiet, steady personality uncomfortable with the public spotlight, who chose to stay away earlier this month from a NATO summit meeting in Europe, where she would have met President Obama and other Western leaders for the first time.

In Iceland, the storyline of the election has closely followed the growing partnership at the head of the government between Ms. Sigurdardottir, a former flight attendant, and Steingrimur Sigfusson, the 53-year-old former truck driver and geologist who leads the Left-Greens. He, too, is a combative character, though as much at ease with the hurly burly of politics as the shy Ms. Sigurdardottir is not.

Mr. Sigfusson was finance minister in the caretaker government, a position he is expected to keep after the election, and he says he wants to free Iceland from the consequences of embracing the unrestrained free-marketeering that had its origins in the United States.

“What are the people of the United States mad about now?” he said in a recent interview. “It is the same poisonous philosophy that we had here, based on a lack of moral awareness and greed, and people who thought nothing of flying Elton John into Iceland for their 50th birthdays and paying him 70 million Icelandic kronur,” or roughly $600,000.

... the krona has plunged almost 50 percent against the dollar and the euro. Inflation in recent months has been running between 15 and 18 percent. Unemployment, virtually nonexistent for much of the last 20 years, is running at close to 10 percent.

On the street, people talk of standards of living that have been set back to the 1980s. Fears of an exodus of professionals to Europe and North America run deep...

“We have grown used over our history to bad harvests, seasons with no fish, the bad climate, things going up and down,” said Olafur Hardarson, dean of social sciences at the University of Iceland.

“People are saying, ‘This will be bloody tough, but we’ve got to get on with it, and we’ll muddle through.’ ”

There are lots of comments bouncing around about how the Great Depression fundamentally changed society. It looks like this recession/depression will be doing the same thing. The rich and powerful had a really good thing going, but they got too greedy and it now looks like a lot of their power & wealth will be taken away from them by populist outrage and the consequent political shift this will bring. Obama may be just the first faint whiff of the outrage that is to come and the political changes it will wield.