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Home Opinion It's all about tax cuts: Reinfeldt as a one-trick pony
Sweden • Tax • Jobs

It's all about tax cuts: Reinfeldt as a one-trick pony

Katrine Kielos - 19 September 2013

Centre-right Prime Minister Fredrik Reinfeldt will stick to his big theme of middle-class tax cuts to create jobs. Can the social democrats expose his two-term government’s record?

The philosopher Isaiah Berlin famously divided thinkers into foxes and hedgehogs. A fox, when attacked, can run, hide and play tricks.

A hedgehog can only roll into a tight ball.

“The fox knows many things, but the hedgehog knows one big thing.”

Hedgehogs have one big idea - foxes have many smaller ones.

This applies to politics as well. Ronald Reagan was a hedgehog: he viewed the world through one defining idea, whether it regarded the economy or the Soviet-union. Bill Clinton was a fox: pragmatic, interested in details, he used to analyse each situation separately.

In politics it's often a strength to be a hedgehog. ”What's your big idea?” is one of the most common questions asked of political leaders today. A hedgehog has no problem answering it.

He or she tends to be perceived as clear and with a purpose. The public knows what he or she “is about”. That's a good thing.

But there's a difference between being a hedgehog - and being a one trick pony.

Swedish Prime Minister Fredrik Reinfeldt is one of Europe's more successful centre-right leaders. Like Germany's Angela Merkel he has brought his party towards the centre-ground and has governed his coalition successfully. He however differs from Merkel in the sense that he has had no problem answering the question about what his big idea is.

Fredrik Reinfeldt formed his four party coalition in 2005 around the mission to ”get Sweden back to work”. Unemployment was almost five percent and, especially, long term unemployment had proved stubborn. There was a group of people outside the labour market that could not seem to get back in regardless of growth levels.

The idea behind Reinfeldt's economic policy was that the Swedish economy did not produce enough low-skilled jobs. Tax cuts for the middle classes should therefore be financed with deep cuts in the unemployment insurance system.

This would pressure down wages and lower unemployment. What made Fredrik Reinfeldt different from previous Swedish centre-right leaders was that he proposed tax cuts – not in order to make the welfare state smaller – but in order to create jobs. It was a new way of arguing for the same thing and it changed the image of Reinfeldt's party from a nasty party out to destroy the Swedish model into a party focused on job creation. It also provided the common project needed to keep Reinfeldt's four party coalition together.  

The problem for Reinfeldt after seven years is that his job creation policies have not worked. This is also the main message that the Social Democrats have been trying to get through since Stefan Löfven became party leader in 2012. Unemployment is almost eight percent and youth unemployment more than 19 percent. Stefan Löfven is criticised for not being enough of a hedgehog. “What's his big idea?” He has however provided efficient opposition to Reinfeldt's big idea.

The Social Democrats have regained the credibility they lost regarding job creation and their policies are now viewed more favourably by the electorate than Reinfeldt's. Were the election to be today Löfven would become Prime Minister although the question about how to form a government would be more difficult to answer than it usually is in Sweden.

The xenophobic party, the Sweden Democrats are also growing.

Unlike in Norway were the centre-right is co-operating with the far right party Fremskrittspartiet it would be unthinkable for Fredrik Reinfeldt to co-operate with the Sweden Democrats. This situation where no side wants to touch the Sweden Democrats opens up the possibility of new alliances after the election next September.

Stefan Löfven has spent almost all his time as leader of the opposition on the issue of employment and it has paid off. The question however is if the election will also be about jobs – or if the public debate will have moved on.

So far that's not quite the case.  

The Prime Minister opened parliament on September 17th by sacking his Minister for Employment, Hillevi Engström. Two weeks earlier the head of Sweden's public employment agency had been fired as well.

Reinfeldt has changed his Minister for Employment a lot over the years, his policy on jobs are however mainly run from the ministry of Finance. And both the finance minister, Anders Borg, and his ideas, stay the same.

It's all about tax cuts.
 
The rationale behind the tax cuts has however changed over the years. When Reinfeldt's coalition first got into power the argument was that the cuts would create jobs. When the economy turned downwards the government kept prescribing more of the same, this time however in order to stimulate the economy (Why a tax cut directed at people who were already well off would be the most efficient way to stimulate the economy was never explained).

In this year’s budget the government keeps proposing more tax cuts of the exact same kind directed at exactly the same group of people.

Fredrik Reinfeldt doesn't view the world through one defining idea anymore. He only has one idea and the world around it doesn't seem to matter.
 
That's the difference between a hedgehog and a one-trick-pony.

Katrine Kielos is a columnist for Aftonbladet, Sweden and Scandanavia's largest daily newspaper

A contribution to State of the Left - Policy Network's monthly insight bulletin that reports from across the world of social democratic politics.

Tags: Katrine Kielos , Opinion , Sweden , State of the Left , SOTL , Swedish Social Democratic Workers' Party , Sveriges socialdemokratiska arbetareparti , SAP , The Workers' Party – The Social Democrats , Arbetarepartiet-Socialdemokraterna , Fredrik Reinfeldt , Moderate Party , Moderata samlingspartiet , The Moderate Coalition Party , Moderaterna , The Moderates , Welfare State , Social Security , World Economic Forum , Triangulation , Göran Persson , The Alliance , Alliance , Mona Sahlin , Green Party , Miljöpartiet de Gröna , The Environmental Party the Greens , Miljöpartiet , The Environmental Party , Left Party , Vänsterpartiet , V , Red-Green Coalition , Immigration , Europe , Sweden Democrats , Swedish Democrats , Sverigedemokraterna , SD , Coalition , Centre Party , Centerpartiet , C , Christian Democrats , Kristdemokraterna , KDSweden , Social , Democrats , Politics , Unemployemnt , The Nordic Model , Soviet Union , Ronald Reagan , Bill Clinton , Isaiah Berlin , Norway ,

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