Interesting article from The Daily Beast regarding the similarities in our financial crisis and the structure of the one Sweden weathered in the 90’s. While their economy recovered quickly and thrived, a parallel situation was happening in Japan with a different effect:

“There are similarities [to Sweden's case],” Lundgren said. “There are three things any plan must do—the first is to maintain liquidity, that’s taken care of by the Fed. The second thing is to restore confidence, and that hasn’t been done so far and obviously the first proposal to buy toxic assets wasn’t enough. And then you need capital injections so banks can keep lending at the levels needed for the economy as a whole.”…

Even if it’s a totally different situation, you have to get the financial system in order and in order to do that you have to get confidence,” Lundgren said. “Franklin Roosevelt did it by closing all the banks and reopening the sound ones, we did it with a blanket guarantee to creditors and depositors. And Japan, well, they didn’t do anything, to be honest. Now the question is what can be done in the US. You don’t need the same techniques, but you need to restore confidence.”

With one of the highest standards of living in the world, a life expectancy of 79 years for men and 83 for women, universal healthcare and a a progressive scientific community, Sweden is the perfect human model for the U.S. to aspire to. Yes, it is technically a “socialist” country, but not in the known definition of the word.

From Forbes:

By 1991 the voters had had enough. They threw out the Social Democrats for the first time since the war and installed Carl Bildt’s Conservative government. Bildt set about liberalizing important state-monopolized or dominated markets, notably telecommunications and banking. As competition in telecoms cut telephone and internet access charges, Sweden became a hotbed of technology experimentation, with some of the highest penetration rates for mobile phones and internet access.

Sweden has continuously reinvented itself and, while their tax system cannot be ignored, the quality of life for most people is pretty sweet. Those who wish to do better financially can always do what we do - plant the main office of our business in a place like Bermuda, get cheap labor from India and take the bulk of our pay in dividends. No matter where you live there’s always a workaround.

You don’t have to become socialist to be the kind of country that values all its citizens. America used to be that country. Sadly, after decades of rule by governments that looked out for themselves and their own, we’re a shadow of our previous promise.

Current News American government, depression, economy, Sweden

Terrific post from Examiner.com

So why would any of these governors turn down help for their neediest residents? Maybe it’s because all three have been named as potential challengers to Obama in 2012. Jindal is being rewarded with the official GOP response slot after the President’s speech tonight. He, along with Barbour and Sanford, should be giving a different kind of gift from voters: they should be bounced out of office when they’re up for re-election. Or, maybe jilted voters can act sooner. Like Illinois, these states can use an impeachment process to dump governors who put politics and personal gain ahead of the best interest of their residents.

The republican response last night was, in a word, pathetic. It was as if we were listening to people from another planet and time. And the politics of his statement was loathsome. Most of the public, it seems, agree.

Examiner.com

63% of Americans think the Republican congress opposed the stimulus package for political reasons.

74% of Americans believe that President Obama is trying to be bipartisan by reaching out to Republicans.

Please keep this up, Republicans. Your demise is very welcome from the rest of us who give a damn about this country.

Politics Bobby Jindal, depression, economy, Obama speech, republican response, stimulus

The Northridge Earthquake. A reminder of things to come.

In 1994, January at 4:30 in the morning I was lying in bed in Westwood, Los Angeles, wishing I could take off from work. A second later, I was standing in the doorway of my bedroom, holding on as an earthquake rolled through my apartment. I had been living in LA for 3 1/2 years and was pretty used to earthquakes by then. At least once a year something would hit, sometimes substantial, and then you went about your business.

This one felt different. It started rocky, took a long time to rise until it hit a point where it felt like the floor beneath me had dropped. It was at that point I said to myself, “uh, oh.”

Today, while the rumble had been very low, almost undetectable for several years, and the rolling seemed to have started sometime around December, this one seems different too. This one, unfortunately, is our economy.

Life is a series of good and bad circumstances, coincidences and near misses. Any of us with a sense of history know that everything comes around on the guitar if you wait long enough. The Great Depression lasted from 1929 to 1939 - ten years. Fortunes were lost, millions were unemployed, the dust bowl didn’t help and nothing really changed dramatically until we were hired to make armed weapons for allies who’s situation was worse than ours since they were now at war.

The cause of the depression? As explained by Irving Fisher, a well-respected American economist, the following occured in this order:

1. Debt liquidation and distress selling
2. Contraction of the money supply as bank loans are paid off
3. A fall in the level of asset prices
4. A still greater fall in the net worths of business, precipitating bankruptcies
5. A fall in profits
6. A reduction in output, in trade and in employment.
7. Pessimism and loss of confidence
8. Hoarding of money
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates

Don’t know about you, but alot of that sounds pretty familiar. We’re currently down between 7 and 8 if I were to score.

We know pretty well how we got here. The dot-com collapse was a warning, but our government didn’t listen to warnings (please reference the PDB “Bin Ladin Determined To Strike in US”), and their solution for everything was tax cuts and massive spending. We’ve spent like gluttons, giving ourselves massive debts, bought houses that were too big for us and we couldn’t afford, we asked for no sacrifices and gave none, refused to remember the past, and let a free market economy - one that has NEVER regulated itself ever - go absolutely hog wild with no constraints whatsoever. We’ve got ourselves to blame for some of it - that is, for any of us who at any point in the past 10 years refused to look at reality and just plain expected everything to turn out well.

I know it seems to be a reflex nowadays for a liberal to blame Bush, but you can’t get away from the fact that this man’s personal habits, his lack of reflection, and his stubborness made a bad situation much worse - desperately worse - than it should have been. He was ill-equipped for this job and proved it up to his last few days by approving a stimulus that also expected the banks and free market economy to regulate itself. Hadn’t they learned anything?

Well, I hope Obama can get us out of this. Given yesterday’s stock market drop, my hope is eternal. I would like to save more, have retirement, buy a bigger house (I was one of the few, apparently, who did not bite off more than I could chew mortgage-wise. My test limit was to buy a house that my wife and I could still afford even if we were working at MacDonalds), have to worry about my career being in stagnation for a decade, and wonder why I didn’t choose a career as a banker or broker like many of my classmates and spend the last few years fleecing my fellow Americans of their investments - and then their tax dollars - so I could walk away from this nightmare a millionaire.

Current News, Politics bush economy, depression, economy, Northridge Quake