I meant to post this last week but work got in the way and I never got around to doing it. This is a link to a piece on Iceland, arguably the single greatest casualty of the financial crisis. Since it’s written by Michael Lewis of Liars’ Poker fame, it’s unsurprisingly very insightful and well-written. Some choice quotations from the article:

“You have to understand,” he told me, “Iceland is no longer a country. It is a hedge fund.”

As absurdly big and important as Wall Street became in the U.S. economy, it never grew so large that the rest of the population could not, in a pinch, bail it out. Any one of the three Icelandic banks suffered losses too large for the nation to bear; taken together they were so ridiculously out of proportion that, within weeks of the collapse, a third of the population told pollsters that they were considering emigration.

They understood instantly, for instance, that finance had less to do with productive enterprise than trading bits of paper among themselves. And when they lent money they didn’t simply facilitate enterprise but bankrolled friends and family, so that they might buy and own things, like real investment bankers: Beverly Hills condos, British soccer teams and department stores, Danish airlines and media companies, Norwegian banks, Indian power plants.

One thing I found almost shocking is how unapologetically scathing Lewis is towards the Icelanders. It’s clear that he thinks that the Icelanders have no one but themselves to blame for their mess. Much of the media coverage I’ve read had a tendency to portray Iceland as an unfortunate victim of the excesses of U.S. capitalism.