Again underscores the difference between the U.S. and Europe. Here it would have been impossible to bail out the fat cats while laying off the blue collars. Political suicide.

Swedish Lex,

My post on Obama and Hoover over at naked capitalism did cause a lot of negative reactions (Obama is not hoover, Europe does not have its head in the sand, etc). I will have to write a follow-up to clarify a few things. But, on the whole, I would say that the Europeans have not allowed management to remain in place when they have lost billions. This has been true in Germany, Switzerland, the U.K. and elsewhere. The U.K. being the closest European analogue to the States, the difference is striking.

I do have the feeling that Europeans will become angered if and when the writedowns continue at banks. It will be very instructive to see how politicians react then. Germany presents a good test case because the Germans had felt themselves immune from all of this. After all, they got none of the asset price upside during the housing bubble. And yet, their banking system is a shambles and they are being asked to pony up for the Irish or the Spanish or the Hungarians.

The Germans are key to the policy response and Merkel is looking weak domestically. So, I am curious to see what her response will be.

Question for you: How will the French respond if the likes of Natixis suddenly has more massive writedowns?

At least the blue collar workers in Sweden have "AMS-åtgärder" (both Swedish Lemming and Edward Harrison should know what that means), but the US workers unfortunately do not have that.

I suppose the US was not founded on the "folkhammat" model.

Why did I put "lemming," I meant to say "lex."

Ed,

Many European leaders are walking a tightrope although there might be less visible "outrage" against banks and bankers here compared to the U.S.

Merkel, Sarkozy etc. have to keep the financial system from imploding while being perceived as not siding with the insiders. Merkel has elections later this year and needs the votes on the center left. Hence no gifts to the capitalists.

Sarkozy literally risks the French taking to the streets attacking banks unless he keeps the bankers on a very short leash. Hence Sarkozy's statement about an empty chair at G 20. Besides any merit it actually may have to refuse to sign a meaningless statement, Sarkozy cannot afford coming home having to tell his constituents that nothing was achieved in London in terms of "controlling finance".

I wonder how would the Europeans woud deal with China at G20. Or maybe that is in an issue that is extremely important to the US only.

And why would Germany want to bail out a country such as Ireland and the Eastern Europeans when the general population gets threats from the owners of capital of relocating there.

It is funny on the Daily Kos where they supported Obama, they have Obama's approval rating on the blog banner. That rating only has one way to go -- down!