Caroline Calais -- Democracy in Americas

             Nancy Pelosi’s speech yesterday says it all – in Washington partisanship is more important than prudence, and it makes me wonder, has the protestant ethic that once founded this country completely vanished? Is the idea that every American is morally responsible for his/her country completely dead?  It looks like it. For not only does the speaker of the house point finger at  president Bush,  house members voting against the bailout are made into villains.  And I honestly have a hard time seeing the 15 Texas republicans, and the 8 Texas democrats that voted against the bailout as dishonorable people.

            The truth is that both parties are responsible for this mess; it didn’t happen over a day – not even over a presidential term or two. Technology innovation is partly to blame.  The invention of the consumer credit was very much the culprit of the great Depression, kind of the same way as technological advances made it easier for lenders of sub-prime mortgages to assess pricing risks. But earlier bailouts is also to blame, it creates the problem of “moral hazard”.

            In Sweden the problem of moral hazard and cheating is familiar one. It might not be that Swedish banks  routinely issues” liar loans” like IndyMac Bank , or engage in deceptive advertising like GMAC Bank and other student loan companies, but Swedes cheat big time with their healthcare benefits.  Economist Assar Lindbeck pointed out that, in 1980, when Swedes received 90-100 percent of their salary when sick, people stayed home about 26 days per year. In 1955, when the replacement ratio was lower, they stayed home 14 days. And this is Europe’s healthiest people we are talking about!

            In the Swedish Welfare State the norm has changed from: do your duties claim your right, to claim your right. Sounds familiar? Kind of the same way wealthy Wall Street reacts to being rescued time and again.