(N.b. - This is actually a rearranged and expanded version of this post from last Thursday. I happened to stumble across the printed version of the cited article on Sweden over my morning tea earlier today, so I wanted to revisit this with more details and emphasis on Sweden. — Sk.)

Last month (28 June) saw the 300th anniversary of the pivotal Battle of Poltava. Poltava was a watershed in the history of eastern Europe (and the world), as it marked the emergence of Peter the Great’s Russia as a major power - and the dashing of any hopes for Ukrainian independence for the next 282 years.

A third consequence was that Poltava marked the end of Sweden’s long run as a major power with an extensive and far-flung empire. After Poltava, Sweden gave up on its imperial status - and largely withdrew from the rough-and-tumble of continental politics.

Nowadays, Sweden is giving up on another long run - its run as the “model” welfare state.

More below the fold.

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I’ve suddenly been finding myself saddled with a surprising amount of travel - both recently-done and on the short-term schedule.

If there’s a possible theme, it relates to what the next onset of economic growth will look like. And these days, it’s about a great deal more than what will drive the next surge of economic growth - it’s also about where the next surge of growth will occur.

And on that count, contemporary Washington is badly, badly out of step with much of the world - and is dangerously oblivious to that reality.

More below the fold.

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Tucked deep inside Mark Steyn’s excellent (as usual) weekend column is this bit of shocking news:

Last week, the donut chain Tim Horton’s, which operates on both sides of the border but is incorporated in the state of Delaware, announced that it was reorganizing itself as a Canadian corporation to take advantage of Canadian tax rates.

I’ve been sending up warning flares about this sort of thing for some time, and perhaps the only surprise is that it’s taken so long for things like this to actually start happening.

Let’s review a few facts below the fold….

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Out amongst the usual street theater that follows a meeting of world economic powers like that held last week in London, the observer will behold a good sample of debased political idiom. The banners read like cant on stilts: “Abolish money” and “One currency, one government, one world” and “The government lies” and “Democracy is an illusion” and — my favorite — “No borders anywhere.” It is a peculiar amalgam of cynicism and Utopia, this idiom. The great reaction against a failed aspect of modern Capitalism shows at once a sneering mistrust, often bolstered by dreary conspiracism, and an almost innocent hope in drastic remedies. Somehow modern politics has managed to bring into alliance despair and idealism.

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Ordinarily a title like that would be far more attention-getter than accurate descriptor, but what else can we say when we see President Obama so shamelessly yukking it up at the expense of those suffering under his hapless, incapable “leadership” that a CBS reporter is forced to ask if his unseemly behavior is the result of being “punch-drunk”?

According to Politico:

President Barack Obama said he believes the global financial system remains at risk of implosion with the failure of Citigroup or AIG, touching off “an even more destructive recession and potentially depression.”

His remarks came in a “60 Minutes” interview in which he was pressed by an incredulous Steve Kroft for laughing and chuckling several times while discussing the perilous state of the world’s economy.

“You’re sitting here. And you’re— you are laughing. You are laughing about some of these problems. Are people going to look at this and say, ‘I mean, he’s sitting there just making jokes about money—’ How do you deal with— I mean: explain…” Kroft asks at one point.

“Are you punch-drunk?” Kroft says.

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The almost singular driving purpose of our American economic policy should be* to encourage productive capital to move here. (Not high finance engineering, but actual means of production, to use the old terminology.) In fine, the driving purpose of our policy should be Hamiltonian through and through — the difference being that while he had to build a base of productive capital all we have to do is restore one.

What is the dearest thing on earth right now? Capital.

So we offer a two year tax holiday — on everything: income, payroll, cap gains, business, corporate, you name it; and to this tax holiday append a mechanism to grandfather in any company that moves operations into the United States. In other words, I propose to institute a radical Federal tax holiday until 2012, say: at which point the previous regime kicks back in — except for those operations that moved into America during that window of tax abeyance.

To mitigate some of the budgetary nightmares implied by this, we could go with a flat 50% tax on income above some level of wealth. (My thanks to Francis for suggesting this modification.)

Sure, we create the outlines of a mischievous regime of economic aristocracy, which our descendants will likely abuse, but at least we give ourselves a shot at recovering to real economic health, sooner rather than much later.

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At 2:45, the Congressman from Mizzurruh has some pointed, and accurate, words for the President whose bailouts and budgets are assaults on capitalism, productivity, and responsibility, and whose every action has served to abort recovery, instead driving our economy further into a hole.

Are you involved in any aspect of the financial industry?

Are you, in fact, in any way, shape, or form dependent on the stock market for your retirement, supplemental income, future expenditures, children’s education, or just disposable income?

Heck, is your household making more than 75 grand a year?

Yes?

THEN IT IS NOT IN YOUR CLASS INTEREST TO VOTE FOR ANY DEMOCRAT IN THE 2010 ELECTION.

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While we’ve been distracted with the domestic financial difficulties, a more horrid story has been unfolding in Europe.

This is going to have stunning financial and political implications.

But before we try to sort through those complexities, just ponder the following numbers.

In the fourth quarter of 2008, our GDP contracted by 3.8% - a rare and abysmal result.

During the same period, Germany’s GDP contracted by 8.4%.

More below the fold.

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Faced with a shortage of funds this year and unwilling to cut the bloated state budget, Kansas Governor Kathleen Sebelius is planning to welsh on the state’s debt to taxpayers who overpaid in 2008 and to put a hold on paychecks owed to state employees until the Republican-controlled state legislature allows her to break state law by borrowing hundreds of millions of dollars from already  bankrupt state funds.

Breaking Borrowing Law

The Kansas Finance Council, which is made up of Sebelius and six state GOP leaders, is refusing to approve the Democratic Governor’s $225,000,000.00 borrowing plan because state law requires all such debts, called certificates of indebtedness, to be retired by the end of the fiscal year in which they were issued. Kansas’ fiscal year ends June 30, and the state has already taken out $550,000,000.00 in certificates that it likely won’t be able to repay. Approving the additional amount requested by Sebelius would push that debt total over three-quarters of a billion dollars with 4 1/2 months remaining to somehow find the money to  pay it off within the timeframe required by law.

“We cannot issue more certificates if the funds will not materialize by the end of the year,” said House Speaker Mike O’Neal (R) in a press release. “Without the revised 2009 budget bill, there is no way that we can legally issue a certificate knowing full well that the money will not be available to retire the debt.”

Governor Turns Up Nose at Real Alternatives

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