No One’s Eating Apple Pie Anymore

Is Iceland’s collapse a harbinger for what’s to come in America?

I hear two things a lot here: “Kreppa,” which means “depression” in Icelandic. And, “We’re waiting.” That sums it up. Waiting. The first weekend after the crash, the partying was loud, as it always is. Then it got quiet. The AA meetings, always well-attended, have reached overflow capacity.

Iceland’s banking system was the first to go. You saw the same headlines they did on October 2nd: “Icelandic Banks Collapse!” “Billions Frozen!” “Icelanders See Icarus-Like Fall of Greed!”

The nation’s stunning  economic implosion tipped off the domino chain that’s cascaded around the world.  So does the aftermath of  Iceland’s spectacular collapse foreshadow what’s to come for the rest of the world?

Until food and supplies run out, the country remains in the quiet before the storm.

Iceland’s economy was 90% based on finance, and wholly dependent on foreign credit. When the credit market dried up thanks to a little glitch on a short strip of pavement in New York called Wall Street, Icelandic banks couldn’t back up their currency. The nation’s markets fell by 83% in a month. The krona plunged. The government nationalized the top three banks, and appealed to the International Monetary Fund for a $2 billion bailout. In polls, support for joining the EU soared.

In some ways, Icelanders are a lot like Americans. They look like they’re from Portland, Maine. I attended a party here and the host cooked three pies: apple, pumpkin and pecan – then we all sat around and watched the U.S. presidential debate. To say that these people are more dedicated to U.S. politics than Americans is an understatement.

But to say they’re just like just like us would be mistaken. They’re quirky (Bjork), socialists (“You just tell them your ID number and it’s free!”), and fond of fuck-me boots (black leather, knee-high, all the time). And Iceland is suffering a crisis of currency, which is different than our crash. Imagine living in a big town, and suddenly none of the neighboring towns would take your money. That’s what happened to this island, one seventh the population of Brooklyn.

Still, three weeks ago, foreign journalists searching for such a narrative packed into Icelandair flights and descended upon Reykjavik. They photographed WASPY types looking sad, then left. What’s happened since? Well...nothing. It’s a currency crisis. Until food and supplies run out, the country remains in the quiet before the storm. During the first week, the main shopping street was jammed with cars filled with families driving slowly, aimlessly. They didn’t know what to do. The restaurants were empty. The only rejoicing to be found was in expat hangouts, where dollars, recently worth 70 krona, were suddenly worth 150.