Is an Identity Crisis Worth 10 Percentage Points of Unemployment?

That's the question that the Washington Post is implicitly raising for readers in its discussion of Iceland's recovery from the recession. The piece notes that Iceland's unemployment rate is 7.0 percent. It doesn't make the comparison to other crisis-afflicted countries which have unemployment rates well in the double-digits, with Spain leading the pack at 22 percent.

In general the piece does paint a reasonably positive picture of Iceland's economy, but it warns readers that:

"It’s tempting to conclude that this country of 318,000 people simply handled the crisis more adeptly than others, like a pick-your-own-ending book in which Icelanders chose correctly. There is a sliver of truth in that, but the full story is more complicated. That’s partly because the circumstances in Iceland are far different than in the United States and Europe, but also because such a simple explanation ignores the anger, the angst and the struggles that remain here, hidden barely beneath the surface.

"Iceland has weathered the worst of the financial crisis, but its society has yet to solve the identity crisis that followed in its wake."

If Post readers were informed of the situation in the other crisis-afflicted countries, they would be able to put Iceland's identity crisis in context.

aristotle aint no icelander
written by frankenduf, January 17, 2012 7:58 AM

any time the business press waxes philosophical, ur in for some real bs- i think the article highlighted an important effect of the recession, tho- the residual anxiety of the citizenry- anyone who's been unemployed for a significant spell knows the toll it takes on one's spiritual well being and connection to their community- no doubt the shock wave from this recession will continue to take a withering toll on the unemployed citizens/families as they try to reconnect to what we all feel when gainfully employed- the american dream...

"A sliver of truth"
written by Paul, January 17, 2012 9:36 AM

More like the whole truth, the one truth and nothing but the truth.

There is nothing complicated about what Icelanders, as opposed to their government which initially tried to bail out their banks, did: they refused to bail out the gamblers who made reckless bets and lost. So they allowed the banks to fail and restructured their financial system.

Now Iceland is on its way to a full economic recovery and its current unemployment rate of 7% is far below the U.S. which decided to bail out its banks.

Whatever angst the people now feel about punishing their banksters is certainly being eased by their new prosperity compared to Spain and Greece. The fact that their debt to GDP ratio is higher than the U.S. does not seem to be of any concern either.

Good job Icelanders! At least somebody is thinking in this crisis.

...
written by sherparick, January 17, 2012 11:20 AM

There are a lot of unhappy rentier readers of the NY Times and Financial Times who are using their Iceland Bank Bonds and CDs as toliet paper who certainly want to discourage Iceland being an example to the other countries such as Greece and Ireland that tried also to turn themselves into hedge funds. They have been far more successful in converting the avearage American, Greek, Sapainard, and Irishman to debt peonage to pay all those bank debts to which they were not contract parties.

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written by reason, January 18, 2012 4:43 AM

"Iceland has weathered the worst of the financial crisis, but its society has yet to solve the identity crisis that followed in its wake"

i.e. We can't think of much negative to say, so we'll make something up. Balance is important you know.

Is an Identity Crisis Worth 10 Percentage Points of Unemployment?

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