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Doddsson’s tyranny: a casebook study

In late September 2008, Glitnir bank was in serious trouble and turned to the Central Bank for help. Davíð Oddsson was then CB director, and decided to nationalize Glitnir.

The Investigative Committee has ruled that, on this specific point [as well as others] Oddsson showed negligence in the line of duty. Indeed, it has been widely said that the nationalizing of Glitnir prompted an immediate run on the other Icelandic banks [whether or not they could have been saved anyway is open to debate – I think probably not].

At this time, one Tryggvi Þór Herbertsson was advisor to Prime Minister Geir H. Haarde. At a private meeting with Davíð Oddsson, Tryggvi Þór expressed doubts about the wisdom of Doddsson’s plan.

The report quotes Tryggvi Þór:

I had just begun when he went berserk, said I was undermining his recommendations and said: “The prime minister [Haarde]is sitting out there and shaking like a leaf in the wind and can’t make a decision. He listens to you and you’re undermining this. If this does not go ahead I will personally make your life miserable here in Iceland for the rest of your days.” He also said I should not mess with Össur [Skarphéðinsson, Minister for Foreign Affairs], or he would come after me. He was rabid, to put it mildly, and I was completely taken aback. I responded by saying that we had been comrades for many years and my only thoughts were for the future of our country. At this he calmed down a bit, but I could see that he was fuming.

A few days later, Tryggvi Þór stepped down as advisor to Geir H. Haarde.

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  • Steinn Sigurðsson April 13, 2010, 5:57 pm

    Dabbi wasn’t a tyrant. He was, and is, a bully and a coward.
    He was also way over his head, and did not have the professional competence or experience to do his duties as a civil servant.
    This is common among charismatic politicians who rely on personal connections, party politics and behind the scenes hardball to get to the top, but some, unlike our Dabbi, have the sense to take advice when they get there. Others, like Dabbi, just like to play emperor until it all goes bad, and then, cowards that they are, they blame everyone and anyone else.

  • Joerg April 13, 2010, 6:14 pm

    For me this particular incident among others in connection with Davið Oddsson are the most striking parts of the report. They provide insight into the stifling atmosphere of fear and defamation, which must have prevailed in the time before the crash.

    All those examples of an apparently pathologic lack of ability to take criticism are in my view plainly disgusting. And I can’t understand, that the younger members of the Independence Party haven’t managed to detach themselves from this tyranny, so far.

    My hope about this report is, that it could trigger a process resulting in a common understanding to exclude all people, who have been named as participants in this collective Ponzi scheme and who are not willing to accept their share of responsibility, from influence in public affairs. On this note – it’s just ridiculous that a central figure of this collapse with such a load of responsibility is still dominating the public debate as chief editor of Morgunbladið.

  • James April 13, 2010, 7:58 pm

    Meanwhile, in 2010, a Political Correspondent at Morgunbladið could have released the following statement:
    I had just begun when Oddsson went berserk, said I was undermining his recommendations and said: “The Political Editor is sitting out there and shaking like a leaf in the wind and can’t make a decision. He listens to you and you’re undermining this. If this does not go ahead I will personally make your life miserable here in Iceland for the rest of your days.” He also said I should not mess with the Foreign Editor, or he would come after me. He was rabid, to put it mildly, and I was completely taken aback. I responded by saying that we had been comrades for many years and my only thoughts were for the future of our country. At this he calmed down a bit, but I could see that he was fuming.”

    I’m still waiting to hear that an irate mob of torch-bearing Icelanders have pursued Oddsson to his hideout…

  • Rik Hardy April 13, 2010, 8:09 pm

    Stein, history’s famous tyrants were all bullies and cowards.
    That’s the essence of a tyrant.
    He tries it on until at last the nation stands up and says, “No more. You are NOT better than anybody else just because you have built up a private empire and a crowd of fawning cronies to maintain it for you and for you to hide behind. The future of the people who live and work in this country matters more than you do. You’re fired.”

  • The Fred from the forums April 13, 2010, 8:12 pm

    I’m illiterate in Icelandic, so I can’t read the report and answer this question for myself.

    Davið Oddson has said before that he tried to warn the government about the risk to the banks and nobody paid attention to him.

    Does the report bear this out, or is his statement, how shall we put it, erroneous?

  • alda April 13, 2010, 8:25 pm

    Fred – the reports discusses this at length. It appears that Doddsson “warned” the government at meetings in which the Minister of Commerce was not included. There is no formal record of those “warnings”, nor were there any formal responses by the government. It was sort of like, “Hey Geir, you should probably look into the banking thing …” but nothing more. And obviously the government did nothing.

  • Sigvaldi Eggertsson April 13, 2010, 10:32 pm

    Alda, the Central bank issued statements assuring everybody that the banks were “basically sound” at the same time as Davíð was warning the government about the same banks and as Geir was used to a certain level of dramatisation from Davíð it is unlikely that they took those warnings seriously.

  • Easy April 14, 2010, 12:08 am

    I belive, based on this report, people that have a forign currency loan and other kinds of loans have a strong legal case, this OFFICIAL report is saying:”the banks decived you, the goberment didn’t protect you, and the media covered the information up”

  • Easy April 14, 2010, 2:08 am

    ”the banks decived you, the goberment didn’t protect you, and the media covered the information up”
    Based on this, how was people supposed to make a well informed and responsable decision according to THE OFFICIAL report people really didn’t know what were they doing and not because they were stupid, but because the information was deliberately hidden from them, people took those loans from a possition of disadvantage.

  • Steinn Sigurðsson April 14, 2010, 5:16 am

    It is important to get some perspective – Dabbi was not a tyrant of Iceland. He was a disproportionately influential politician, who abused his authority and influence. He was, in succession, removed as prime minister and as head of the central bank.
    His control of the Independence Party was arguably tyranny, but they are a private party, and as Joerg notes, the members need to either walk away, or take control away from the Old Boy gang and their cronies.
    Many of history’s famous tyrants were, at least at times, personally brave – all were, by definition, harsh in their rule, but I’d argue that is distinct from bullying. Dabbi is a bully, and he is a coward, who cannot take responsibility or face criticism. He might aspire to tyranny, but has neither the strength nor the skill to achieve it.
    Don’t make him more than he is.

  • Rik Hardy April 17, 2010, 11:59 am

    I think Steinn is right about some of history’s famous tyrants being personally brave, but just as many were not, and knew that the rank they schemed to achieve would include a considerable degree of personal protection.
    From that protected environment, which all-too-easily becomes an isolated and coddled environment, the tyrant, who by definition has little interest in the well-being of his own countrymen, simply does as he wishes.
    Doddi was clever enough to manipulate this situation to the limit, and whether this makes him greater or lesser is a matter of moral interpretation, but his aims and methods were tyrannical in nature, and were stopped only by the impressively stubborn common sense of his own people.
    In other countries, which I could easily name, he would have got away with it.