The Financial Times has a piece today about the Swedish bank bailout. Here’s a nice quote. You couldn’t imagine a sharper contrast with the American approach:
Arne Berggren, the finance ministry official responsible for bank restructuring, is blunt about the approach he took. It was clear from the outset that the government would act as a commercial investor, demanding equity stakes in return for capital. “We were a no-bullshit investor – we were very brutal,” he says. The authorities also insisted on control. “You take command. If you put in equity, you have to get into the management of the business, [otherwise] management is focused on saving the skins of the [remaining private] shareholders.”
Not here. The Obama administration is clearly a pro-bullshit investor. Dither about the AIG bonuses, then moan and posture, then give the company another $29.835 billion – offsetting the bonuses, sorta, in what looks like a rounding error – but still not exercising any serious government control despite owning 80% of the institution.