"Stopping a Financial Crisis, the Swedish Way" ... LINK

[Blackhatjack]

http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?em

Stopping a Financial Crisis, the Swedish Way

"A banking system in crisis after the collapse of a housing bubble. An economy hemorrhaging jobs. A market-oriented government struggling to stem the panic. Sound familiar?

It does to Sweden. The country was so far in the hole in 1992 — after years of imprudent regulation, short-sighted economic policy and the end of its property boom — that its banking system was, for all practical purposes, insolvent.

But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.

Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.

That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well."

MORE

[ContinentalOp]

1. No, no, that sounds like socialism.

Let's just write a blank check to a guy who used to work for one of these crooked institutions that we're bailing out. That'll fix it. And please get the check to him by Friday... OR ELSE.

Seriously though, that's a good article. I just happened to read that a few minutes ago before you posted this.

[TheDonkey]

3. OK Mr. President!

[Blackhatjack]

5. Just shows they don't have to reinvent the wheel to deal with this crisis...

Smart people always look around to see if these kinds of crises have occurred before, and how others dealt with them.

We don't have to copy this plan, but there is a lot of wisdom in their approach we could benefit from in crafting our own solution.

[Iris]

16. How many history courses did the MBA president take?

[Greyhound]

2. K & R.

I was looking for something on this a couple of days ago, thanks.
:kick: & R

[spag68]

4. Socialism

If socialism is so bad, why do those swedes and other country's around there seem to have such happy,educated, and healthy people? Think about this, they have Amsterdam, beer and pot, what a concept.

[dmr]

8. Yet no one EVER, EVER bitches and moans about fascism.

I hear about the fear of Socialism all the time, but just once I'd like to hear the word fascism spoken. That is where we are heading. Police state and all.

[Iris]

17. me, too.

[bushmeister0]

20. Isn't it strange that all the countries closest to the "Iron Curtain"

right after WWII got set up with such liberal socialist governments?

It almost seems like the PTB in Washington were trying to convince all these countries not to go over to the "dark side" when our good friend Uncle Joe was in the assendant.

We almost lost France and Italy to the dirty commies, if you'll remember, just after the war.

The further you got from the borders of the USSR, the more right wing the governments wound up.

Accident? I think not.

[Hawkowl]

6. Send this to your congressman!

We need to demand no bailout WHILE offering alternative solutions. Remember Al Gore saying the Chinese symbol for crisis is also the symbol for opportunity? We could successfully start this country back up the road of a prudent mixed economy.

[eridani]

9. Will do. Have emailed them every day this week

There is always a new point to be made by some article posted on DU, and I let them know about it.

[bleever]

7. That kind of ruthless capitalism is fine, until

some people think that the Public, because they pay the taxes, should be able to actually OWN anything.


THAT would be socialism. Even if they pay for it!


Damn Public.

[amborin]

10. i posted this the other day..the main point is equity for taxpayers

<http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x7160604>

the essence of the swedish bailout was that taxpayers had equity shares, so they could benefit if the banks improved

the US plan does not provide taxpayer equity

[vaberella]

14. From what I saw on CNN, before McCain showed up. Taxpayer equity was on the list.

When we bailed out AIG, that's what we got.

[amborin]

21. but aig is earlier

the ny times article explains the swedish model involves taxpayer equity for the larger scale bailout

[vaberella]

23. You're not understanding my statement.

On CNN, they listed what was in the Frank-Dodd revision Bill. They said of the provisions taxpayer equity shares were on teh list. 3 of Obama's six provisions were met. The fourth one on mortgage, Obama wanted the stimulus package to be done separately and the last is changes that need to be made to SEC, which just involves with the SEC putting that in their paper work and there's a committee attached to that.

Anyway the provision was met as stated today on CNN. That changed with McCain and we're back at no.1, so to speak.

My reference to AIG was to show the comparison between the two bail outs.

[SoCalDemocrat]

11. Clearly the right solution

involves taxpayer shares of ownership, if we are indeed going to bail anything out.

[WCGreen]

12. That was the best article I read yesterday....

Really showed that a melding of socialistic ideals could be melded into a free market approach and ne successful

[vaberella]

13. I thought this was Obama's plan from the beginning?! Was it just me?! n/t

[Window]

15. K/R.

:kick:

[truthisfreedom]

18. We should push for it, do it, and make the rethugs sick to their stomachs over it.

I'm all for anything that has a proven track record.

[quantass]

19. Ok, so why isnt ANYONE (Congress, Candidates, MSM) bringing this up?

[vaberella]

22. What are you talking about? The Frank-Dodd bill had

equity shares to us. It did not give gifts to the CEOs. It needed more language but that was the plan, oh and panels and committees to watch over these things.

Unfortunately McCain showed up, GOP went crazy and everuything was blown to hell.