The NY Times has a story in today's edition that purports to explain how Iceland made such a rapid recovery from the financial collapse of 2008. The real truth is simple enough: Iceland permitted their banks to go bankrupt. That did it. A strong economic recovery began sixteen months later and that was that -- off to the races.
Meanwhile, all the Ivy league economists advising the Bush-Obama Administrations were busy counseling bailouts. The result -- the slowest economic recovery in US history.
Today's Times articles points to other policies, such as capital controls, that the article claims helped the Icelandic recovery. That is false. All the government intervention things cited in the article only made matters worse, as such government meddling always does.
The key policy that enabled Iceland to recover and recover vigorously was that the government stepped aside -- no bailouts. The banks failed, new banks emerged and it was off to the races.
You wonder why the US and Europe can't see the obvious. Iceland did the right thing and free markets restored prosperity.