The Swedish model takes a hit

Remember back when Sweden-style bank nationalization was all the rage? What if that, too, was a handout to bankers?

By Andrew Leonard
Published July 1, 2009 8:26PM (UTC)
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Tyler Cowen, no fan of the welfare state, provides a link today to what he labels as a "A Polemic Against Sweden," published in the Guardian.

Authored by one Ruben Andersson, described by the Guardian as "an anthropologist, writer and journalist based in London," the opinion piece doesn't deserve the honor of the label "polemic" -- it's really just an odd rant declaring that the "Swedish model" is dead and the "Swedish dream is over." Sweden, once "in the vanguard of postwar social democracy ... has since the 1990s become a neoliberal experiment."

I wouldn't even be taking the time to mull it over if it weren't for one passage that struck my fancy. (Italics mine.)

... [I]t was Sweden's homemade financial meltdown of the 1990s that finally killed off the dream. Poverty was added to the pessimism. Savage cuts hit schools, unemployment rocketed, the krona sank -- leaving the social system in a disarray from which it has not recovered. The conservative government at the time has lately been praised worldwide for its handling of the crisis. Actually the bankers were rewarded, not punished, while the rest of the country is still reeling from the cuts, selloffs and dashed dreams the crisis provoked.

Sweden, readers will no doubt recall, is the country that resolved its banking crisis by guaranteeing the entire nation's bank debt and nationalizing two of the country's largest banks. Many critics (from the left) of the Obama administration's approach to resolving the banking crisis in the U.S., have held up the "Swedish model" as the appropriate kind of tough love necessary for a fundamental resolution of the ongoing problem.

And yet, for Ruben Andersson, bankers were rewarded -- which is exactly what the left believes has happened in the United States.

The overall tone of Andersson's rant doesn't incline me to invest his pronouncements with much in the way of credibility, but the through-the-looking-glass aspect of his declaration does strike me as kind of funny.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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