RS3 - A New Mom And The President of Iceland

Listening to Planet Money's podcast "A New Mom And The President of Iceland," I had several things run through my mind.  One being why would people from England and the Netherlands trust a random bank from Iceland with their money when they probably have never even heard of them. And two when the financial crisis occurred why did the people of England and the Netherlands think they were entitled to get their money back when they took a gamble and lost.

The fact that there was a vote on whether they should pay back England and the Netherlands or not to me is just ridiculous.  It should have been a unanimous decision to not pay England and the Netherlands back.  I don’t know why people would be scared that it would go to court because in my eyes, as I already stated, the people took a gamble and ultimately lost.  Obviously the bank is going to take care of the people in its own country.  They are their main clients, not the people of England and the Netherlands.  It would just be a generous thing to do to pay the people of another country back their money, it’s not an obligation unless they signed some sort of contract when they opened the savings account with the bank in Iceland.

The vote ended up being sixty percent with the no don’t pay them back and forty percent yes pay them back, so the governments of England and the Netherlands took it to International Court.  The courts final decision was that Iceland did not have to pay back either nation and they won, they were victorious.  They considered this a major plus, they called it their second win when it comes to war.  The only other was the cotton war where there wasn't even armies involved they joked about.  All in all in my personal opinion it should have never came to the point where the international court had to get involved because it is not the job of Iceland to pay the countries of England and Netherlands their money back because they had a financial crisis.

Although I sided heavily on the vote of not paying back England and Netherlands there very well could have been some bad side effects.  They ultimately could have been shut out of the world economy resulting in complete disaster.  If your country is not able to be part of the world economy they would not be able to trade goods, so ultimately Iceland would become a place where no one could possibly live.  The country would have to make everything, from clothing to all types of food.  And judging by the name of the country, the climate just wouldn't support that.