Financially Bold Britannia

U.S. Treasury Secretary Henry Paulson's $700 billion bailout plan still suffers from at least two problems. First, Paulson has yet to explain what he is going to do exactly with all that money. His primary justification was to buy "toxic" mortgages from sinking financial institutions. But the U.S. mortgage crisis has turned into a global credit freeze, and Treasury has yet to explain how its new-found funds will address this far bigger issue. Second, Paulson's plan is still likely to reward those who made the worst mistakes while giving taxpayers little to nothing in return for their investment except a bunch of worthless mortgage assets.

Enter the Brits and the Swedes.

Continue »

Posted by Lauren Keane on October 10, 2008 3:57 PM

Our New Capitalist Model: Sweden

Sweden is not accustomed to being touted in America as the example of capitalism done right. Two months ago, most policymakers referred only to the Nordic country as an example of the classic cradle-to-grave social welfare system with all of its inherent challenges. Politicians on the right were particularly fond of pointing out all the inefficiencies and socialist policies that undermined the country's capitalism. And just one month ago, Mike Huckabee warned at the Republican National Convention that Obama had taken "lots of ideas from Europe he'd like to see imported here."

But now it is not just Obama who is suggesting some idea imports from Europe. Almost overnight, world leaders have rushed to seek advice from Swedish policymakers on how to deal with a banking and credit collapse and restore faith in the capitalist system. The irony that socialist Sweden may rescue America's capitalism is causing some smug smiles in Stockholm.

Continue »

Posted by Lauren Keane on October 10, 2008 1:39 PM