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Benjamin Sarlin interviews former Swedish Finance Minister Bo Lundgren, who seems to think the Obama administration is starting approach the financial crisis correctly. He pushes back against the idea that Sweden's now-infamous bank nationalization plan -- which saved the country's economy in the late nineties -- was "socialist":
"I'm a market liberal. My party that I used to lead, the Moderate Party, is the conservative party in Sweden and the parallel to the Republican Party in America," Lundgren said. "When I nationalized the banks, it wasn't because I wanted to: It was crisis management. Their owners had been wiped out, the banks were black holes, they had no equity left, and there was no alternative but to take them over."He added that foreign observers often confuse Sweden's socialized income distribution and government services with its privatized business environment, leading to inaccurate claims that their government is fundamentally different than other free-market economies. One example of Sweden's privatization chops: The government is refusing to bail out the famed car company Saab this week, as officials say they don't think running an auto manufacturer is within the state's job description.He also has nice words for the new Public-Private Investment Program announced yesterday by Treasury Secretary Tim Geithner. This interview is part of an emerging narrative that suggests PPIP is a necessary precursor to any kind of receivership scheme, for political reasons, time to figure out the legal authorities, and with the knowledge that if it doesn't work it will reveal the need for broader federal intervention.
-- Tim Fernholz
