Obama Bailouts Too Socialist, Says Sweden

Ah, Sweden!  That legendary land of buxom blondes, nude beaches, the Midnight Sun (yes, just like Norway) - and a welfare system so thorough and penetrating that, so we hear, birth certificates no longer even have a blank for the father's name.  It should come as no surprise that American liberals have long looked to Sweden as an example of everything the United States should be and is not - free love, free medical care, and free darn near everything else.

Ted Kennedy would surely feel right at home, though the Swedish nude-beach patrons might not be quite as enthusiastic about his visit as he with them.

Yet contrary to the predictive theories of conservatives, Sweden does not appear to be the Hobbesian dystopia of universal "equality in poverty" that you might expect.  Indeed, to the casual visitor, it appears to be far closer to a Utopia of happiness and satisfaction.

There may be room to question whether Sweden is all that it seems to be, but that's a different question.  The point is that the Swedish welfare-state model represents the Holy Grail for the American left, from the lowliest long-haired protester right on up to our newly-elected Socialist-in-Chief.

As it happens, Sweden suffered from a banking crisis in the 1990s much like the one we're experiencing now, and was able to handle it in a reasonably effective fashion; Obama found their solution to have a certain appeal.  CNS News sums up the Swedish crash recovery model:

Sweden moved quickly, nationalizing two banks and setting up an asset management company to take over bad debt.

This contrasts rather well with Japan, who in a similar situation dumped endless funds into the dying banks, thus keeping them alive as "zombies" and preventing the market from clearing.  The end result was their famous "lost decade" of no economic growth at all.

Perhaps surprisingly, Mr. Obama ultimately rejected the statist but successful Swedish solution, instead reaching for something much more akin to the fantastically expensive and as yet unsuccessful Japanese bailout plan.  He does, however, have a plausible reason for this decision:

Obviously, Sweden has a different set of cultures in terms of how the government relates to markets and America's different. And we want to retain a strong sense of that private capital fulfilling the core -- core investment needs of this country.

In other words, Mr. Obama rightly realizes that the Swedes are used to government running everything anyway, so taking over the banks was no big jolt; whereas in America, at least in theory, we believe in private enterprise and a total takeover of the baking industry wouldn't go down nearly so smoothly.  Surely this is disappointing to the netroots!

But it's hard to fault his analysis of the political situation.  It's a fact: Sweden is socialist born and bred; America is not, at least not yet.

Which makes it all the more shocking that Sweden does, actually, draw the line somewhere.  The International Herald Tribune reports:

The Swedish government has responded to Saab's desperate financial situation by saying, essentially, tough luck. Or, as the enterprise minister, Maud Olofsson, put it recently, "The Swedish state is not prepared to own car factories."

As socialist as Sweden surely is, living next door to the Soviet Union has taught them that there has to be some degree of private enterprise in order to maintain social prosperity.  There has to be private industry; there has to be competition; and, where necessary, failed enterprises must be allowed to die in order to allow new, successful employers to take their places.

Yes, it's a wrench; yes, the residents of Trollhattan, home to a giant Saab factory, are furious that the government won't bail them out; yes, unemployment is increasing.  But Maud Olofsson hit the nail squarely on the head: as badly as GM has run Saab, a government agency would do even worse.

Yet Mr. Obama is still considering bailing out GM back here in the United States, a company far vaster, far more complex, and in far worse shape than Saab which at least boasts a good reputation and a core group of staunchly loyal buyers.  Who on earth does he think is going to be able to fix GM?

Tim Geithner, supposedly the smartest man in the room and the only person who could possibly fix our economy, so much so as to make his personal tax frauds irrelevant?  That doesn't seem to be working out so well, with Geithner's performance so utterly incompetent that voices on both sides are calling for his resignation.

Considering how Mr. Obama has been treating company exectives of late, which of them will be in the mood to help him out even if they could?  No, if he wants to prop up GM, his actions are clearly based far more on fundamentalist leftist philosophy than on any sense of reality or expectation of success.

During the election, Barack Obama was condemned as the most socialist Senator; but that was too modest by half.  He now reveals himself to be more socialist than Sweden, rushing in where even Scandinavians, those angels of the Left, know better than to tread.