The US and other nations must take it as a model for the next time the too-big- to-fail corporations screw things up and ask for a bailout with taxpayers’ money, he added.
RT: The jail terms are the biggest penalty for such crimes in Iceland's history. What is the significance of the precedent?
Charlie McGrath: It’s significant in regards to the 2008 crisis, if you happen to be living here in the United States, where the majority of these too-big-to-fail institutions are headquartered, where the true corporates are, where the CEOs and COOs of these massive corporations live. Not one of them went to jail. Not one of them has been indicted. There’s been a handful of token fines, that had been paid by these corporations – and let me reiterate ‘by the corporations’, not by these individuals themselves.
So we see an actual government, an actual people and nation stepping up and saying: “I’m sorry, you committed fraud. You screwed over a nation. And you are going to pay for it by your butt being put behind bars.”
This is exactly what needed to happen in the United States and in the rest of the world. And my hat is off to Iceland for standing up to these bankers.
RT: Could there be broader ramifications of this case. Is Iceland setting a new bar for prosecution of financial fraud?
CMcG: I hope so, but I am not optimistic of that. Unfortunately I myself and lots of other people – Jim Rogers, Mark Favors, Harry Dent – we all believe that there is another mega-collapse coming.
And let’s face it, these institutions that we called too big to fail in 2008 – the six largest of them are 37 percent bigger than they were in 2008. They hold sway over the economy. They hold sway over the government. And we are doing the exact same things that led to a collapse in 2008.
I truly believe that 2008 was a financial terrorist event. It was a financial 9/11 committed by these institutions, and when we go into the next crisis that is going to affect the entire globe. I hope that Iceland is held up as a model on how you deal with this scum!
RT: In light of this scandal, how much involvement do you think governments should have over the dealings of financial institutions?
CMcG: Here in the United States, we pretend that it is socialism when you start talking about government control over financial institutions. But we have something far worse here.
We take the so-called private corporations, these free-market capitalist corporations –they are in control of the economy here – we take these corporations and put them on a pedestal, and when they fail, we spread their debt to the people of this country.
That’s something far worse than socialism. It’s the worst form of fascism! So to pretend that government has no place in overseeing these institutions is to sit back and say: “Go ahead, bankers! Go ahead and take over the future of this nation and lead us into financial ruin!” And that’s exactly what happened.
What happened in Iceland is what the people demanded of the government. In 2009 they marched on the parliament and said: “We are not going to take the fraudulent failures of these banks lying down.”
They cordoned off these institutions. They’ve formed state banks. And they hit at the problem head on. They helped the people rather than the banking institutions. So I again hope this is the model that we are looking forward to.