US parallels swedish experience

M

Mav88

All economic arguments come with the usual set of disclaimers since economics is not an exact science. That doesn't mean there are not some gross truths though. For example it is almost certain that printing too much fiat currency means inflation, suddenly cutting oil supply by 50% means higher prices in the near term, etc.

Comparing the US to Sweden is flawed because Sweden is a small export economy with a more homogeneous and well educated population, at least until the muslims outbreed them and turn sweden into pakistan. I still think there are some gross comparisons.

In particular the Swedish currency crisis of the early 90's is something to look at as a lesson

I like Wiki's cliff notes version so using that... http://en.wikipedia.org/wiki/Economy_of_Sweden

Sweden has had a unique economic model in the post-World War II era, characterized by close cooperation between the government, labour unions and corporations. The Swedish economy has extensive and universal social benefits funded by high taxes, close to 50% of GDP.[4] In the 1980s, a real estate and financial bubble formed, driven by a rapid increase in lending. A restructuring of the tax system, in order to emphasize low inflation combined with an international economic slowdown in the early 1990s, caused the bubble to burst. Between 1990 and 1993 GDP went down by 5% and unemployment skyrocketed, causing the worst economic crisis in Sweden since the 1930s. In 1992 there was a run on the currency, the central bank briefly jacking up interest to 500% in an unsuccessful effort to defend the currency's fixed exchange rate.[5] Total employment fell by almost 10% during the crisis.

A real estate boom ended in a bust. The government took over nearly a quarter of banking assets at a cost of about 4% of the nations GDP. This was known colloquially, as the "Stockholm Solution." The United States Federal Reserve remarked in 2008, that "In the early 1970s, Sweden had one of the highest income levels in Europe; today, its lead has all but disappeared....So, even well-managed financial crises don't really have a happy ending."[6]

The welfare system that had been growing rapidly since the 1970s couldn't be sustained with a falling GDP, lower employment and larger welfare payments. In 1994 the government budget deficit exceeded 15% of GDP. The response of the government was to cut spending and institute a multitude of reforms to improve Sweden's competitiveness. When the international economic outlook improved combined with a rapid growth in the IT sector, which Sweden was able to capitalize from, the country was able to emerge from the crisis.[7][8]

The crisis of the 1990s was by some viewed as the end of the much buzzed welfare model called "Svenska modellen", literally The Swedish Model, as it proved that governmental spending at the levels previouly experienced in Sweden was not long term sustainable.[9] Much of the Swedish Model's acclaimed advantages actually had to be viewed as a result of the post WWII special situation, which left Sweden untouched when competitors' economies was in pieces.[10]

However, the reforms enacted during the 1990s seem to have created a model in which extensive welfare benefits can be maintained in a global economy
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A modern western economy whose competitors were destroyed by WWII (Very Important!), real estate bubble, deficit 15% GDP, runaway entitlements... seems familiar to me.

Swedes traded one of the highest income levels in Europe for big government welfare from 1970-1992. As with almost every single socialist adventure ever made, they found out that the cost is more than they bargained for. The reforms afterwards involved massive cuts to social welfare, something you will never hear american liberals discuss, and to this day Swedish policy is trying to reemphasize capitalistic ideals. They quicky found out that the goals of flat income distributions and government nanny-care leads to poverty for all. So here we are in the US in 2009 and the liberal mouthpieces and laedership eerily echos the very same policies that led to Sweden's crash. As someone once said, history teaches us that we learn nothing from history.

Here is the swedish prime minister on the 'new model', and once again you will never hear these discussions from an american liberal.


http://www.regeringen.se/sb/d/10296/a/99193


Today, in the age of globalisation, open economies and growing interdependence between companies and nations, it's more correct to point out distinctive features and experiences. Institutional features that need some historical knowledge to understand.
Let me just state a few factors that will allow you to better understand the historical context.

The institutions of free enterprise, the market economy, a well functioning legal system, a modern banking system, well defined property rights and an open attitude towards international competition.

An agreement between the social partners that lays the ground for lasting and stable relationships on the labour market.

Welfare services that focus on labour force participation and knowledge.

A clear work-first principle in labour market policy and social insurance.

Then, of course, the obvious point - the fact that Sweden was never directly involved in the Second World War.

All these fields together added up to form the framework of the old Swedish model. And the outcome speaks for itself.

From 1950 to 1973 annual GDP growth in Sweden averaged 3.7 per cent.

Unemployment varied between 1.5 and 2.0 per cent, which was lower than the European average and much lower than in the United States.

At the beginning of the 1970s Sweden also had the fourth highest GDP per capita measured in purchasing power parity.

Sweden was blooming.

***

Then came Sweden's mad quarter of a century.

Growth fell off. Unemployment rose. The quality of welfare declined. What, then, were the factors that made the Swedish model stop working?

The economic downturn that followed the two oil crises in the 1970s of course had a negative impact on Sweden. Also, the financial crises and macroeconomic shocks of the early 1990s had substantial consequences for the Swedish economy.

But these shocks also affected other industrial countries. And it is difficult to argue that Sweden was particularly vulnerable to the international business cycle.

This alone cannot explain why Sweden fell from fourth place in the OECD's ranking of member countries by GDP per capita around 1970, to eighteenth place in 1997.

Instead, I would argue that the explanation lies in other factors.

The vital balance between the institutions in the model disappeared and socialism swept over Swedish society. - emphasis mine

We saw budget deficits and high inflation undermine macroeconomic stability. In many respects this was the result of irresponsible and short-sighted political actions.

We saw a sharp rise in taxes, especially on labour, together with an expansion of benefit systems that undermined the work-first principle and made it less worthwhile to work.

The education system was distorted and Swedish schools focused less on knowledge.

Changes in international competition were met with subsidies rather than reforms. Free enterprise was not encouraged; instead it was questioned.

We saw a rise in unemployment and the percentage of working-age people supported by various social benefits and subsidies rose from 10 per cent in 1970 to about 20 per cent in the present decade.

What took a hundred years to build was nearly dismantled in twenty five years.
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The Swedish prime minister loathed socialism sweeping over Sweden displacing free markets and free enterprise, an education system less focused on real knowledge, subsidies for uncompetitve institutions instead of reform ....

ok now, watch the american left perform the same magic here, only this time there will not be a good economy in the rest of the world to export our way out of this mess. If a talented population like Sweden struggled with this, the disaster awaiting the uncompetitive american melting pot will be irreversible.

I want to be wrong, but that's my best guess.
 
yeah he's cute...

our intellectual heavyweight liberal president seems to think that he needs to butt in on the cop situation in Boston, it keeps him in the spotlight.

Speaking of educational institutions not focusing on useful knowledge, here we have a black studies guru elevated to a national star. All he does for a living is institutionalize hatred of whites... rome burns. Sweden didn't have a large bitchy and underperforming minority population to deal with. They still struggled.
 
Quote from Mav88:

yeah he's cute...

our intellectual heavyweight liberal president seems to think that he needs to butt in on the cop situation in Boston, it keeps him in the spotlight.

Speaking of educational institutions not focusing on useful knowledge, here we have a black studies guru elevated to a national star. All he does for a living is institutionalize hatred of whites... rome burns. Sweden didn't have a large bitchy and underperforming minority population to deal with. They still struggled.
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You are a bitter, bitter man, perhaps even a racist, but I don't know you.

The Swedish model is hardly news. PBS frontline covered it in Nov, 2008. I guessed you just watched it on Fox video.
"Swedish Solutions to U.S. Financial Crisis - Video - FOXBusiness.com"
 
You are a bitter, bitter man, perhaps even a racist, but I don't know you.

The Swedish model is hardly news. PBS frontline covered it in Nov, 2008. I guessed you just watched it on Fox video.
"Swedish Solutions to U.S. Financial Crisis - Video - FOXBusiness.com"

I am bitter about my country being destroyed, I'll be fine but it's hard to watch the carnage around me. To not be disturbed would be more disturbing.

I have never seen anyone discuss the parallels like I have outlined here. Calling anything Swedish 'old news' is like calling any economic discussion old news. Useless point you are making.

You are condescending, but in an annoying retarded sort of way. Perhaps you are even mentally deficient, but I don't know you.
 
FYI, the US is as socialist as any other socialist country out there. Corporate welfare, Farm subsidy/wefare programs, Section 8 housing, Medicare, Medicaid, Social Security etc.

The only people worried about Obama butting into the cop situation are NO-SOLUTION right wing birther losers.

I suggest you focus on getting your teeth fixed rather than trying to weigh into the economic disaster Bush Jr left the US in.





Quote from Mav88:

yeah he's cute...

our intellectual heavyweight liberal president seems to think that he needs to butt in on the cop situation in Boston, it keeps him in the spotlight.

Speaking of educational institutions not focusing on useful knowledge, here we have a black studies guru elevated to a national star. All he does for a living is institutionalize hatred of whites... rome burns. Sweden didn't have a large bitchy and underperforming minority population to deal with. They still struggled.
More...
 
88 in the handle and a post that disparages minorities is a pretty definitive marker for a certain sort of individual.
Best not to argue with this. Best to just leave it alone.
 
FYI, the US is as socialist as any other socialist country out there. Corporate welfare, Farm subsidy/wefare programs, Section 8 housing, Medicare, Medicaid, Social Security etc.

The only people worried about Obama butting into the cop situation are NO-SOLUTION right wing birther losers.

I suggest you focus on getting your teeth fixed rather than trying to weigh into the economic disaster Bush Jr left the US in.

Doing nothing would be better. So you are fine with farm subsidies, wall street (GS) bailouts, government motors etc., ok so you are all for the socialist failures. No, we are not as socialist as anyone just because you say so.

Ending them is a solution, butting into cop controversies is not.

I suggest you focus on getting laid from your boyfriend instead of fixating on Bush.
 
88 in the handle and a post that disparages minorities is a pretty definitive marker for a certain sort of individual.
Best not to argue with this. Best to just leave it alone.

oh yeah, the old '88', lol

I should have known that presenting this was far deeper than some here could handle. No significant rebuttals, yes it is better to just leave alone.
 
Democrats own blacks in the US. Jesse jackemup has sued private sector employers to the point that, decades ago even, white employers cannot hire blacks due to the downside risk of lawsuit and the reverse discrimination that happens on the job. Blacks are left with welfare subsidized by crime and government jobs. So what does our cute little guy with the ears and his little teleprompter do.. he's a Democrat, he fanned the flames of racism and accused the cops of being racist, etc.. the Democrats want that underperforming and bitchy subculture right where it is, they don't want them to get real jobs in the private sector at all, blacks are social conserevatives for the most part, if they had a real job and were paying taxes they would be Republicans after about three paychecks...

So we have to take this shit, these accusations of racism, year in and year out so the Democrats can stay in power. Without the black vote Democrats would win no national elections, even if the black vote was divided between Republicans and Democrats, Democrats would be nearly forgotten going back to the mid 20th Century....

Man, I saw racism, the area of the Mojave Desert I used to call home went black over a decade or two... walking through the WalMart parking lot was an adventure in racism... "you better get out of my way you white bastard" was one thing I heard, from a black woman.... "you took my parking space", "you better watch it":black teenager in a car. "you better not touch my car": black guy about thirty yo, had stuff thrown at my car when I drove home from work... had gangbangers threaten my daughter and her friend..

These Democrats present this great face of uniting us, and across the aisle bipartisanship, and we're all going to be singing kumbaya and how blacks are going to be fully integrated and what all but they must be telling blacks that it's about a war on whites when nobody else is looking...

It is sort of funny in the LA Area, with Black Pride in full force for decades and us paying them not to work in the private sector, Mexicans moved in. Mexicans don't take shit from Blacks or care about their "oppression by whites". Mexicans work and Mexicans are more barbaric than blacks in the US. They shoved a hundred thousand of them out of the LA Area and up into the Mojave Desert.. what a joke, pride goes before a fall and it couldn't happen to nicer people :D

I really don't think that blacks are going to wake up and throw off the yoke of oppression that the Democrats have on them, a few maybe, but the white world is fed up and it makes it hard for those few... whatever... I speak Spanish, all our workers are Mexicans and South Americans, they could not be better employees but you have to watch it or you will have a defacto union steward collecting portions of their wages if you let one of them start bringing his friends in...

I like this idea that was brought to ET recently, that Detroit is the model for the US.. it's likely true...

There is no chance in hell that Democrats will avert a repeat of history here and we won't go the way of Sweden, it's all they know how to do, socialists get on the back of an economy and ride it to death making problems all the way down the death spiral...
 
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