Lean Government

Responsible Liberalism?

I moved to the US from Sweden. I became interested in what US liberalism stood for. As soon as I understood I shook my head in disbelief. In my opinion they had totally lost their way. They talked and acted like old school Big Government statists at best and socialists at worst. US Libertarians with a capitol L was not even close to classic liberals, the likes of Adam Smith and John Stuart Mill.

Then I found the Responsible Liberalism of former California Governor Pat Brown. In his inaugural speech presented January 5, 1959 he put into words exactly how I felt what a progressive classic liberalism was about. It was not class, racial or gender divisive politics of the poststructuralist left but pragmatism and realism, politics of vision and hope:

The essence of liberalism is a genuine concern and deep respect for all the people. Not monuments or institutions or associations, but people. Not one race, or one creed, or one nationality, but all the people. When people come first and special privilege is scorned, government is truly liberal.

In a liberal atmosphere, the individual stands secure against invasion of his dignity or intrusion on his conscience. He has the right to require justice and fair play, the right to demand protection from economic abuse and selfish threats to his security. At the same time, government must not, in naïve good intention, stifle his initiative or smother his growth. Men must indeed have freedom to breathe the air of self-respect.

A liberal program must also be a responsible program, a reasonable, rational, realistic program. We must know how much it will cost and where the money is coming from. Benefits must be measured against burdens. A program which pampers the people or threatens our solvency is as irresponsible as the one which ignores a vital need. But we will always remember that there is a difference between responsibility and timidity, and we are resolved to be governed more by our hopes than by our fears.

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April 22, 2009 Posted by | Uncategorized | 3 Comments

The Swedish Psyche, the extreme rationalist. A Viking tradition.

Be cautious. It’s a national trait explored on the first page of Modern-Day Vikings (2001). Labelled as “a practical guide to interacting with the Swedes” the opening lines quote the Hávamál, verses of Old Norse poetry dating back 1,000 years.

“Praise not day until evening, no wife until buried, no sword until tested, no maid until bedded, no ice until crossed, no ale until drunk.

April 15, 2009 Posted by | Uncategorized | Leave a comment

It was the politicians, central banks and financial authorities that created the entire crises

The best book on the crash is as yet only published in Swedish, in July the English version will be available. ““A perfect storm: How the State, the Capital, you and I sunk the world economy.”

The author is Johan Norberg, author of “In Defence of Global Capitalism” and the foremost debunker of Naomi Klein’s lies and myths in “The Schock Doctrine- The Rise of Disaster Capitalism”. His rebuttal in the article  “The Klein Doctrine: The Rise of Disaster Polemics”



Johan Norberg writes in a Swedish news paper column as follows:

[My translation]

“In my [Johan Norberg] book “A perfect storm: How the State, the Capital, you and I sunk the world economy (Hydra publishers) I explain how consumers, home buyers, banks and mortgage institutions created an unsustainable housing and credit bubble. But the most provocative for left-wing economist Lars Pålsson Syll is that I also show that it was the politicians, central banks and financial authorities that created the entire environment that stimulated most of these aberrations.

Let me briefly describe some of the key facts:

1) Monetary policy: To avoid a crisis after the IT bubble and the terrorist attacks of September 11, 2001 the U.S. Federal Reserve lowered key interest rate from 6.25 to 1.75 percent in 2001, then lowered it further to 1 percent in June 2003 and kept it there for a full year before it began to gently raise it. It was so cheap to borrow, new money poured into the U.S. housing sector, prices doubled in five years.

2) Capital Imports: China and a number of other major emerging economies would not allow the market to control the exchange rates and suppressed domestic consumption by political means. Instead, exported capital on a massive scale to the U.S.,that further drove down interest rates and inflated the credit bubble even more.

3) Housing: Even when fighting one another both Republican and Democratic politicians argued that more and more people should own their homes. This was put into effect by a battery of rebates, subsidies, mortgages and diverse guarantees. Both the Clinton and Bush administration tried to ensure that more and more loans were given to people who the market did not previously regard as creditworthy.

The single most important factor was the huge, government-sponsored mortgage institutions Fannie Mae and Freddie Mac. In 2004, when the bubble expanded at its worst, the Bush administration mandated that the proportion of loans that should go to low-income earners should be increased from 50 to 56 percent.

4) Housing Bonds: Fannie Mae and Freddie Mac launched synthetic mortgage backed securities, which contained elements of several hundred loans, which in its turn were resold to investors. Wall Street banks became increasingly interested in these risky products when credit rating agencies Moody’s, Standard & Poor’s and Fitch said they were almost risk free.

But these institutions became deceptive to accommodate well paying clients. They could get away with it and still maintain their position because they had been given a monopoly by public regulators – banks was forced to have more capital if they purchased securities that had received poor ratings these institutions and many mutual and pension funds were by regulators banned from buying any at all, so everyone who wanted sell securities had to go to the major credit rating agencies. No matter how badly they misbehaved, they had retained their monopoly.”

April 14, 2009 Posted by | Uncategorized | Leave a comment

Why have we let the Eyore and Henny-Penny liberals hijack liberalism?

Why have we let the  Eyore-liberals, the Gloom and Doom liberals hijack liberalism?  They are angry at everything that dares to breathe optimism, enlightenment and enjoyment of life. They cannot see the progress in individual freedom and the rise in  prosperity the world has gone through, in their utopianism they can only imagine a perfect world so they only concentrate on the wrongs remaining instead of looking at the actual progress, big picture. Their world view could also be called Henny-Penny liberalism, some small thing is wrong somewhere in the world and hence the sky is falling down, the world as we now it is going to end. Everything is going hell and only a bigger and stronger government with unlimited power can fix it.

A Swedish classic liberal wrote and I could not have written it better as regards to former communists and socialist now becoming Eyore-liberals, statists:

”The result of this new version of liberalism that puts materialism, economic equality as its primate is not that liberty and freedom is preserved instead a government bureaucrat will in each individual case measure your freedom to see if you are entitled to it or, if they must restrict it to meet other objectives. This new liberalism is paternalism; patronizing and technocratic. Its representatives,  who in their pompous “pragmatism” believe themselves to be above the Rule of Law and ethical principles,  are cut and dried, well drilled and believe themselves to be more intelligent and more well  informed, as to be able to dictate how others should live their lives in all areas, big or small.

If socialism is like being beaten by the high school bully, this new liberalism is getting dressed down by the class disciplinarian, Dudley Do-right. It’s physically less damaging, but no less damaging to your self-esteem.” [ My translation of  part of Mattias Svensson’s text “Ior-liberalernas utmaning” (The Challenge of the Eyore-liberals.)

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March 28, 2009 Posted by | Uncategorized | Leave a comment