Michael Lewis gave Iceland the Liar’s Poker treatment. And now Icelanders don’t find his writing so hilarious anymore.
NYT: Maybe Icelanders did not appreciate being depicted as “mousy-haired and lumpy.” Maybe they did not want their folklore about elves to be reprinted in the pages of a prestigious magazine. Or maybe they were simply embarrassed about their country’s economic collapse.
For whatever reason, an article by the acclaimed author Michael Lewis in the April issue of Vanity Fair about Iceland’s crisis upset some online readers in the country, one of whom called it an “attack on Iceland.”
Was Michael unfair? You be the judge:
Just after October 6, 2008, when Iceland effectively went bust, I spoke to a man at the International Monetary Fund who had been flown in to Reykjavík to determine if money might responsibly be lent to such a spectacularly bankrupt nation. He’d never been to Iceland, knew nothing about the place, and said he needed a map to find it. He has spent his life dealing with famously distressed countries, usually in Africa, perpetually in one kind of financial trouble or another. Iceland was entirely new to his experience: a nation of extremely well-to-do (No. 1 in the United Nations’ 2008 Human Development Index), well-educated, historically rational human beings who had organised themselves to commit one of the single greatest acts of madness in financial history. “You have to understand,” he told me, “Iceland is no longer a country. It is a hedge fund.”
An entire nation without immediate experience or even distant memory of high finance had gazed upon the example of Wall Street and said, “We can do that.” For a brief moment it appeared that they could. In 2003, Iceland’s three biggest banks had assets of only a few billion dollars, about 100 per cent of its gross domestic product. Over the next three and a half years they grew to over $140 billion and were so much greater than Iceland’s G.D.P. that it made no sense to calculate the percentage of it they accounted for. It was, as one economist put it to me, “the most rapid expansion of a banking system in the history of mankind.”