Lesson, What Lesson? (ESA)

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eyglo02_dlThere once was a man who preached with his megaphone on Oxfort Street day after day, telling all the “shopaholics” who passed him by that they would go straight to hell.

What would he have made of the throngs of people, estimated at more than 10,000, who stormed through the halls of the German home improvement chain store Bauhaus when it opened in Reykjavík last weekend?

To quote a story from satirical news website Baggalútur (again):

Search and Rescue Look for Man in Bauhaus

Search and rescue squads from Reykjavík and Mosfellsbær are trying to track down a man who went missing while shopping in Bauhaus on Saturday where he intended to buy building material for a veranda, wired nets and various small tools.

The man is not familiar with the surroundings and concern has arisen that he may have tried to walk between the garden tool department and timber department—an approximate two-days’ walk.

The man is poorly equipped for shopping—he only carried ISK 20,000 in cash and did not have a credit card.”

Priceless.

History is quick to repeat itself in Iceland and I find myself writing the same thing as in November 2007—I might as well copy and paste my words from back then:

“‘Are Icelanders manic buyers?’ A reporter asked a chubby middle-aged housewife, who had been standing in line for two hours to be one of the first customers to enter the brand new Just 4 Kids toy store which opened in Iceland last week. ‘Yes,’ she admitted without feeling the slightest bit ashamed.

The housewife was one of many who queued in the cold outside the toy store that day. Teenagers, young parents, senior citizens, bankers and bus drivers, everyone was impatiently waiting to spend money on things they didn’t need.

I don’t think they even cared whether it was a toy store they were queuing outside or some other kind of store. The important thing was that a new place to spend money had been created, a newer, bigger, better and, maybe to some extent, cheaper place to shop.”

Only this time Icelanders outdid themselves again by setting a new record in turnout at the opening of a new store; just when one thought the opening of Lindex last autumn— when a few days later the store was forced to close again because customers had emptied the shelves and storage—couldn’t possibly be topped.

There are some things worth noting in these stories:

Just 4 Kids, an Icelandic toy megastore established to compete with Toys “R” Us that had recently arrived in the country, went bankrupt a few months after the opening.

The reason, as in the case of so many companies at the height of the “boom years”, was that Just 4 Kids, created on the basis of a small-scale company with a successful history, aimed too high too soon, borrowing too much money to be able to pay it back in time.

This was before the crisis hit with the banking collapse in October 2008.

Bauhaus originally planned to open in Iceland that very month. The store was fully constructed, employees had been hired, products had been placed on the shelves.

Then the economy came crashing down and the chain store’s managers decided to cancel the opening and lay of the staff.

Since then the big Bauhaus building, mockingly perched on a hill overlooking Reykjavík, right off the highway leading out of the capital, served like an emblem of the crisis.

That is, until Icelandic consumers decided the crisis was over.

Shortly after the three-year anniversary of the banking collapse, in the midst of political and economic instability, the state and public still buried in debt, Icesave unresolved and the mortgage system in shambles, Lindex opened and Icelanders went berserk, spending money like never before.

And so Bauhaus’ managers decided it was safe to finally open their Icelandic branch as Icelanders were once again spending beyond there means.

In weekly Fréttatíminn on April 27 there was an interesting interview with chair of the Constitutional Council and director of the University of Iceland Institute of Ethics Salvör Nordal, who was on a task force working with the Alþingi parliament’s Special Investigative Commission (SIC), reviewing the nation’s ethics and work methods.

“I had hoped that the nation would learn from the collapse, take it seriously and have it motivate changes. However, we haven’t learned the lessons from the collapse that we needed to,” Salvör stated.

Sadly, she is absolutely right. One week later the opening of Bauhaus proved her words.

Among the 58 suggestions for improvements that Salvör’s task force made in the eighth volume of the SIC report, was that the nation needed to review the levels of consumerism which reigned in the pre-crisis years and made the economic collapse much more difficult for many families and individuals than if they had been more moderate in their spending.

Nah, drawing from the experience of the crisis is too hard, saving money is boring. Let’s rather spend like crazy and fuel the inflation until the next crisis hits—and be just as stunned as last time, blaming everyone but ourselves.

Eygló Svala Arnarsdóttir – eyglo@icelandreview.com

Views expressed here are the author's own and do not necessarily reflect the opinions of Iceland Review.