05.24.2011 2

Iceland’s Revolution Against International Bank Bailouts Goes Global

Spain Bailouts Protest

Spain bailout protest: "We want to be Icelanders!"

By Bill Wilson -In April, the people of Iceland went to the polls, decisively rejecting a bailout of British and Dutch investors who lost billions in the Icesave bank in 2008.  Iceland is the rare example of a nation that allowed its banks to fail in the wake of the financial crisis.

Now it appears to be an example for the whole world, and has inspired protests in Spain and Italy, a movement called M15.  Some of the movement’s slogans include, “When we grow up we want to be Icelanders,” “don’t rescue the banks,” “let the culprits pay the crisis,” “banks rob us,” and “bipartisanship is dictatorship”.

While some in the media have characterized the movement as left-wing, it appears to be appealing to individuals across the political spectrum, young and old.  One video promoting the movement spoke out against both of the major parties in Spain, the center-right Popular Party, and the leftist PSOE.

And dispelling the notion entirely, the group’s founding website, “Real Democracy Now,” articulates a broad message for folks of all political stripes: “Some of us consider ourselves progressive, others conservative. Some of us are believers, some not. Some of us have clearly defined ideologies, others are apolitical, but we are all concerned and angry about the political, economic, and social outlook which we see around us: corruption among politicians, businessmen, bankers, leaving us helpless, without a voice.”

This all sounds quite familiar.  In this narrow sense, M15 appears to at least in part resemble America’s tea party movement.  It’s a revolutionary sentiment that surpasses party factions.

These protesters, like the tea party, oppose efforts to bail out international banks that bet poorly on housing and sovereign debt.  They also recognize — and oppose — the tyranny of the few that has emerged in the wake of the sovereign debt crisis where financial institutions refuse to take any losses on their bad investments.

Notably, the tea party has been noted for its opposition to the bailouts, whether it’s a Republican administration proposing them or a Democrat one.  It was similar sentiment that knocked Republicans out of power in 2006 and 2008, only to put them back control of the House in 2010.

Similarly, in Spain, the unrest has now seen the socialists dealt a decisive loss in the May 22 regional elections to the Popular Party.  Clearly, the center-right party was the beneficiary of the dour economic situation in Spain.

But, that victory will likely not be long-lasting if that party cannot follow through on its promises of reform.  In Ireland, Fine Gail was catapulted back into power on the promise to end the bank bailouts.  But after that nation’s central bank said they would need another €24 billion to stay afloat, Prime Minister Enda Kenny went back on his word and stepped in to prop up the banks, earning the enmity of the Irish people who oppose the bailouts.

In Finland, the True Finn Party achieved an historic 19 percent of the vote in the latest elections opposing bailouts of sovereigns like Portugal, Ireland, and Greece, rising from its relatively obscure 4 percent showing in the prior election.

Because of special rules in Finland that allow its parliament to vote on European Union decisions, the True Finns were in a unique position to stop the European Union €78 billion bailout of Portugal.  That was because Social Democrats there had demanded that bondholders of Portuguese debt take losses in exchange for the bailout.  Without their support, the deal was in doubt.

But, like Fine Gail in Ireland, the Social Democrats have now gone back on their word against bailing out Portugal and the banks that lent them billions.  Now, the Finnish parliament has approved the bailout with the Social Democrats’ help, and the True Finns will likely benefit from this betrayal in future elections.

Here in America, as citizens attempt to persuade their leaders to regain control of the nation’s finances with a $14.3 trillion national debt, the largest in the world, they too have been frustrated at the apparent lack of progress made.  They were promised $100 billion of spending cuts in 2011 by Republicans, only to see that reduced to $61 billion, and again reduced by a deal to cut $38.5 billion in spending authority that only resulted $352 million in net cuts for the year.

If Republicans cannot find a way to rein in the unbridled spending and borrowing in Washington — which benefits the same international banks that are so unpopular in Europe with hundreds of billions of dollars of interest payments — their newfound majority may not be long-lived.

They might learn a thing or two from the Icelandic revolution that is spreading throughout Europe.  The primary lesson is to listen to the will of the people, or endure their wrath at the polls.  Because the people are in charge, not the banks.

Bill Wilson is the President of Americans for Limited Government. You can follow Bill on Twitter at @BillWilsonALG.

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