The worldwide financial crisis has been an eye-opener in many ways. But to a Swede, it has been a big surprise to realize just how stigmatized Sweden seems to be in the United States these days.
In response to the U.S. government taking partial ownership of the auto industry, the banks and insurance companies, several U.S. conservative TV commentators have lately worried that the United States is turning into "socialist Sweden".
In response, liberal comedian Jon Stewart of "The Daily Show" ran a report last week called "The Stockholm Syndrome," making fun of Americans' black-and-white view of the Nordic country's famous welfare system.
But the significance of this Swedish taboo and the Cold War mind-set many Americans seem to be stuck in dawned on me recently as I was about to interview Paul Volcker, former chief of the U.S. Federal Reserve and chairman of President Obama's Economic Recovery Advisory Board.
"Whatever you do, don't mention Sweden," cautioned Clarence Schwab, who runs C. Schwab LLC, an investment company in New York.
"Sadly, the first thing most Americans think of is socialism, and that is still a very sensitive issue here."
As a half-American, half-Swede, Schwab should have some insight. Schwab not only brings Swedish, green cutting-edge technology to the United States, he has tried to figure out what the United States could learn from Sweden's bank crisis in the early 1990, partly from his uncle, Nobel Foundation Chairman Marcus Storch, who was a member of Sweden's financial rescue commission at the time.
Simply put, the Swedish center-right government acted swiftly, boldly and with democratic support as it made temporary takeovers of insolvent banks to sort out their bad debts. It took about three years until they had become "healthy," at which point the state's shares were sold off without a loss.
The goal was never to gain permanent control of the banks, but to save them and the banking system. The risk and responsibility were mainly carried by the banks and their shareholders, rather than by taxpayers.
But Sweden seems tainted. When I asked Volcker about the prospects of "temporary takeovers," or "partial nationalization" of the U.S. banks, he showed some alarm. "Nationalization is a very emotive word," he said.
This was at the end of February and the United States had already, de facto, started to partially nationalize some of its banks.
At a time when the concept of capitalism is being questioned, it seems some Americans even try to avoid Swedes out of the fear of being tainted by the association with socialism. Take Bo Lundgren, for example. Lundgren was Sweden's minister for financial and fiscal affairs from 1991 to 1994, and oversaw its comparatively speedy recovery from the crisis.
Lundgren traveled to Washington in March to testify to Congress about the lessons of the Swedish crisis. But neither Treasury Secretary Timothy Geithner nor the president's top economic adviser, Larry Summers, took the time to see him.
Likewise, the skepticism about the Nordic and European welfare models was apparent among some of America's top economists and financiers in an online video conversation this month about the future of capitalism.
In the Financial Times video, Nobel Prize laureate in economics Edmund Phelps dismissed the European model as "a complete failure."