Sweden's Saab story, and ours

More

Finally, some tough talk on car companies: "When I see that (our nation's car company) has been running at a loss for so many years it would be irresponsible for me to stand here and say, sure, we are going to use the taxpayers' money in this way. I don't think I was elected to do that."

Oh wait, that's not a free market rogue in the Obama administration. That's the industry minister of Sweden -- Sweden! -- on allowing auto maker Saab to persue "reorganization," or their version of Chapter 11 bankruptcy, this morning in the New York Times. What's Adam Smith doing in Scandinavia?

First, this isn't your father's (or older brother's) Sweden, anymore. After years of strong economic growth without increased employment, Sweden's Social Democratic Party was swept from power in the 2006 national elections, and a coalition of center-right officials filled the gap. So what you're hearing isn't the re-education of Swedish socialism - it's a completely new government.

Second, this isn't necessarily a blow to Swedish nationalism because Saab isn't entirely of Swedish nationality, anymore. General Motors bought a 50% stake in 1990 and proceeded to "reinvent" (GM-speak for "ruin") the product, leading to truly dismal 2007 and 2008 sales.
 
In other words, GM Americanized Sweden's car company to increase profits, and now we've Swedenized our economy to bail it out. A world without walls!

This raises a larger point. As recently as this morning, GM bondholders expressed grave doubts about the company's ability to stay afloat despite more than $13 billion of loans. As the AIG bonus fiasco showed, the American's public's appetite for outrage is never sated, and if it begins to view federal loans to Detroit like paper shoveled into an inferno, we'll see more people siding with Swedish government, and even more running from what was, until, recently, the Swedish model.

Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

What Do You See When You Look in the Mirror?

In a series of candid video interviews, women talk about self-image, self-judgment, and what it means to love their bodies


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Adventures in Legal Weed

Colorado is now well into its first year as the first state to legalize recreational marijuana. How's it going? James Hamblin visits Aspen.

Video

What Makes a Story Great?

The storytellers behind House of CardsandThis American Life reflect on the creative process.

Video

Tracing Sriracha's Origin to Thailand

Ever wonder how the wildly popular hot sauce got its name? It all started in Si Racha.

Video

Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.

Video

Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.

Video

The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air

Writers

Up
Down

More in Business

Just In