Iceland and Wall Street: A parade of fools

The island nation should have stuck to fish, and Wall Street should have checked its math. Some reading suggestions.

Published March 5, 2009 5:21PM (EST)

The global economic crisis is no fun for billions of people, but for writers like Michael Lewis (a set which really has only one member) it's an unending bonanza. His latest epic, "Wall Street on the Tundra," tells the preposterous story of Iceland's rise and disastrous fall as an international banking power with great verve.

If you want to know what just happened in Iceland, it's a great story. But the parallels with what happened/is happening on Wall Street are unavoidable. It doesn't take much of a leap to imagine that we are all Iceland now.

The world is now pocked with cities that feel as if they are perched on top of bombs. The bombs have yet to explode, but the fuses have been lit, and there's nothing anyone can do to extinguish them. Walk around Manhattan and you see empty stores, empty streets, and, even when it's raining, empty taxis: people have fled before the bomb explodes.

It's a great read -- all 10,000 words of it. Felix Salmon was the first blogger I saw recommending it. Felix, by the way, has the cover of Wired magazine this month with his own essential contribution to understanding the crisis, "Recipe for Disaster: The Formula that Killed Wall Street." One of Lewis' themes is that the Icelanders who rushed into investment banking had very little clue as to what they were doing, and were basically treated like suckers by international financiers. But Salmon demonstrates pretty conclusively that Wall Street's smartest, longest-established players don't have much to brag about, either.


By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Globalization How The World Works Iceland Wall Street