In a move that would make many capitalists’ head explode if it ever happened here, Iceland just sentenced their 26th banker to prison for their part in the 2008 financial collapse.
In two separate Icelandic Supreme Court and Reykjavik District Court rulings, five top bankers from Landsbankinn and Kaupping — the two largest banks in the country — were found guilty of market manipulation, embezzlement, and breach of fiduciary duties. Most of those convicted have been sentenced to prison for two to five years. The maximum penalty for financial crimes in Iceland is six years, although their Supreme Court is currently hearing arguments to consider expanding sentences beyond the six year maximum.
After the crash in 2008, while congress was giving American banks a $700 billion TARP bailout courtesy of taxpayers, Iceland decided to go in a different direction and enabled their government with financial supervisory authority to take control of the banks as the chaos resulting from the crash unraveled.
You don't need a degree in math or finance to understand this basic truth: When the economy is in an upward swing, a banker can get away with a lot of crooked crap to earn himself and his institution a lot of money. It's only when the economy takes a downward swing that he or she will be exposed. Prior to 2007 and 2008, the downward turns were small enough that the financial shenanigans never came all the way out into the open, as far as the American public and most of Europe and South America were concerned. But in 2008, the economic dip was so bad there was no Peter to rob in order to pay Paul
Some countries tried austerity measures that crushed the everyday people. Here we were luckier. Here President Obama did whatever he did, and it appears to have worked. Our president successful applied a bandaid to cover our current banking problem -- for now.
But President Obama did not successfully get any serious reform past his overwhelmingly republican congress. And this is the probably the one time the white republicans reaction wasn't founded on race, racism, and obstruction. The only thing white republicans are more dedicated than preserving the advantages of whiteness is protecting the 1% -- where the bankers who almost took us down reside.
The 2 to 5 years in prison each might not sound like much. But stop thinking about drug addicts and gangsters doing drive-bys on television cop shows. Two to five years sounds like nothing when you're thinking of the devistation caused by a small time criminal trying to prove his masculinity on a television cop show. Think about what you would do yourself, as a working person where jail is only a reality on television, to avoid jail. To me? Two to five years sounds like it's as good as a life sentence. As a middle class person my life is completely derailed. I'm thinking loss of property, credit score etc. A rich person probably has money to help him recover, but I'll bet they don't see it that way. I'll bet jail is something to be feared like a death sentence for the rich banker too.
I'm thinking a real threat of jail when you're essentially betting the horses with other people's money while sitting in a bank that's too big to fail would stop bankers from seeing financial vehicles riskier than the race track as attractive.
I hope somebody with a realistic knowledge on how to get our country and our congress to move in this direction is paying attention. But in a year where the election is all about disaffected white people who actually think it makes sense that they can't choose between Bernie Sanders and Donald Trump, rather than Bernie Sanders and Hillary Clinton, I don't see this happening in the United States anytime soon.