Tuesday, February 4, 2014

Denmark vs Goldman-Sachs

Sometimes it is easy to overlook Denmark.  It is quite small and there just are not all that many Danes (5.6 million).  It doesn't punch above its weight in the way Sweden has done since the Scandinavians started figuring out industrialization in the 19th century.

Here in Minnesota, folks talk about how Nordic immigration made politics a mostly Nordic game.  But within that story were clear differences—the Swedes were the progressives, the Norwegians the reactionaries, the Finns were the radicals, and the Danes?  The best story about Danish politics would be the tale of Elmer Benson who became Minnesota's second elected Farmer-Labor governor following the death of Floyd B. Olson.  He won by the largest margin in state history in 1936.  Two years later, he lost by a record margin.  In need of a job, Benson, who had been a fiery critic of the banking industry, went into the banking business for himself explaining that the people had soundly rejected his critique of banking and besides, banking was all he really knew.  And so ended his days as a rich small-town banker.

Back to Denmark itself.  Because of her excellent agricultural land, the Danes have long had reason to organize her agricultural institutions (cooperatives, agricultural extension education, agrarian political parties, etc.) This is a tribe that has been organizing its economy for prosperity for a long time.  And then there is Copenhagen—arguably the most beautiful city on earth that cements her reputation as a cosmopolitan center of trade.  If Vestas or Lego are examples of the sort of enterprise spawned by rural Danish economics, Maersk (the world largest container shipper) is the logical outcome of a people who have been going to sea since at least the eighth century.

So how does a tribe of people who have been making mostly sensible economic decisions for a long time end up with a government populated by the very worst sort of yuppie eurotrash?—the kind who would be shooting selfies at a funeral?  Actually, the answer is pretty simple—neoliberalism is the official doctrine at all the finest institutions of higher learning in Denmark.  Hella Thorning-Schmidt, Denmark's first-ever female prime minister, went to the very best of those schools and THEN she married the son of Neil Kinnock, the former Labor Prime Minister of UK who she met at the College of Europe in Bruges.  He has a neoliberal welfare job at the World Economic Forum—the kind given to Labor princelings as the price of selling out.

So are we supposed to be surprised that the Danish PM sold out the very economic principles that have made Denmark prosperous over the years?  Why?  That is her job—to cut crooked deals with the Goldman-Sachs of this world.

The Danish Government Nearly Collapsed Today Over A Deal With Goldman Sachs


Denmark's government is in turmoil after the Socialist People's Party (SF) quit the ruling coalition over a deal with Goldman Sachs, Lars Eriksen of the Guardian reports.

The deal involves Goldman purchasing a 19% stake in state-owned utility Dong Energy for $1.5 billion. Denmark’s shareholding would fall to about 60%.

Despite the walkout, the deal has been approved and the government is expected survive.

“We are pleased with the approval of this transaction and look forward to making this significant minority investment alongside the Danish State, ATP, PFA and the existing minority shareholders," a Goldman Sachs spokesperson told BI. "This is a long-term commitment which reflects our support for the management team's current strategy across the Company’s activities, including the significant renewable energy investments, which we believe will create value for all stakeholders.”

(For an analysis on the financials of the deal, check out this post from Guan Yang.)

Denmark's Socialist People's Party withdrew its six ministers from the 23-member Cabinet. Party leader Annette Vilhelmsen noted that she would continue to support the ruling coalition. Meanwhile, some center-left politicians accused the government of betrayal.

Milne notes that the minority government of Thorning-Schmidt has been fragile since it was formed in 2011, but the bid by the fifth-largest U.S. bank has caused the most serious threat to its survival.

“The Dong share sale is putting more nails in the government’s coffin,” Christoffer Green-Pedersen, a political science professor at the University of Aarhus, told Bloomberg.

Bloomberg reports that 68% of Danes are against Goldman holding the stake and thousands of protesters gathered outside the parliament last night to voice their anger over the deal. An online petition gathered more than 185,000 signatures against the deal. more

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