Swedish models

Lars Jonung was the Swedish PM’s chief economic advisor during their ‘Emergency’ in ’91-’93, so it’s fair to assume he knows a thing or two. He has a succinct article here where he summarises their experience.

The article is brilliantly clear and worth 5 min’s of anyones time.

He explicitly criticises the version that we are trying – a month before Mr. Lenihan announced it. I quote

Today, major steps towards pseudo-nationalization have been taken in many countries, creating the worst of all possible worlds: governments are financing bad banks without outright owning them and failed managers and owners are not punished.

We have only half the core elements that he mentions as crucial and we do not have any of the qualitative attributes that are necessary.

It still seems to be a case of ‘brokers and bankers first’.

Even if that is not the case it seems so in the eyes of the public which is just as bad both in terms of their lack of ‘buy-in’ to the solution and their lack of confidence in the outcome.

Sadly, we are still screwed, it seems.