Timo Soini is no free marketer

Yesterday, the Wall Street Journal published a text in Timo Soini's name. He's the leader of the Finnish Fundamentalist Party (the "True Finns" in official parlance), and the piece is supposedly his reasoning for opposing the Portugal bailout.

WSH: Why I Won't Support More Bailouts

Fortunately, it is not too late to stop the rot. For the banks, we need honest, serious stress tests. Stop the current politically inspired farce. Instead, have parallel assessments done by regulators and independent groups including stakeholders and academics. Trust, but verify.

Insolvent banks and financial institutions must be shut down, purging insolvency from the system. We must restore the market principle of freedom to fail.

If some banks are recapitalized with taxpayer money, taxpayers should get ownership stakes in return, and the entire board should be kicked out. But before any such taxpayer participation can be contemplated, it is essential to first apply big haircuts to bondholders.

For sovereign debt, the freedom to fail is again key. Significant restructuring is needed for genuine recovery. Yes, markets will punish defaulting states, but they are also quick to forgive. Current plans are destroying the real economies of Europe through elevated taxes and transfers of wealth from ordinary families to the coffers of insolvent states and banks. A restructuring that left a country's debt burden at a manageable level and encouraged a return to growth-oriented policies could lead to a swift return to international debt markets.

On the face of it, this is an incredibly sensible free-market critique of the European bailouts.

There's a problem with it: its supposed author is an agrarian populist who heads a party that proclaims itself to be "Christian Socialist". He's no free market proponent. While he condemns deficit spending in other European countries, he and his party are firmly in favor of massive deficit spending in Finland.

In their election manifesto, the "True Finns" demand an increased role for government in the Finnish economy and increased taxation. They specifically oppose the Finnish government's few efforts to introduce any kind of productivity and cost-efficiency standards into the public sector, and are in favor of increased intervention. As an example, in their manifesto on agriculture policy, Soini's party calls for maintaining gigantic agricultural subsidies but reducing oversight, and for ridiculous public works projects like a railway to the Arctic Ocean.

Before the election, Soini even proposed that the Finnish government invest the money curently held in pension funds into infrastructure projects like roads and railways (HS). He told Finland's state broadcasting company that some of this money should be used for the aforementioned Arctic Ocean railway (YLE). This is a lunatic idea that would simply result in the pension fund money vanishing into the black hole of pork barrel politics.

So don't be fooled by Soini's apparent free market stance. He's an old-fashioned pork-barrel politician who opposes the bailouts purely on nationalistic grounds: no Finnish money for foreigners! The text published in his name was almost certainly written by one of his many ghostwriters and image consultants, who his fans like to pretend he doesn't employ. The "True Finns" espouse none of the free market principles laid out in the text, and in fact, support their polar opposites in Finland.