Monday, November 8, 2010

Will the U.S. Enjoy a Swedish-Style Rebound? Don't Bet on It

In my latest column for DailyFinance, "Will the U.S. Enjoy a Swedish-Style Rebound? Don't Bet on It," I take issue with the view put forth by one economist in a New York Times article by Gretchen Morgenson, published this past weekend, that the U.S. is set to enjoy an economic rebound similar to that which occurred in Sweden following a similarly devastating financial crisis almost two decades ago.
Among other things, I note how wrong-headed Washington's approach has been in comparison to that of the Swedes when it came to addressing the failings of the financial sector and the role it played in helping to bring about the crisis:
U.S. authorities ...rewarded failure. They threw taxpayer money at troubled institutions without extracting any real concessions. They allowed banks to pretend they were solvent and carry on with business as usual, which, in contrast to the "Swedish solution," was not in the best interests of the economy as a whole. Few managers suffered the consequences of their bad behavior, illegal or otherwise.
To read the rest, click here.

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