When They Pick Up the Phone at 3 AM, What Will They Say?
America’s tragedy is that we have three neoliberals left in the presidential race, at a time when, as Martin Wolf correctly pointed out in Wednesday’s Financial Times, neoliberalism has collapsed. The bailout by the Fed of Bear Stearns sounded the death knell for 30 years of deregulation.
How have McCain, Clinton and Obama adjusted to the new facts of life, at a moment when the entire system is still tottering?
The Republican, John McCain, has confirmed his own low estimates of his grasp of economic policy by announcing that he is opposed to any strengthening of financial regulation to prevent the shenanigans that caused the subprime and "securitization" catastrophes which have provoked the current credit crisis. At a moment when the costs of federal bailout and the incoming recession are certain to require a big increase in the US government deficit, he wants to cut spending.
Hillary Clinton shuttles between criticisms of McCain’s stance and her formal declaration in one recent speech that she wants Clinton-era Treasury secretary Robert Rubin, and former Fed chairmen Alan Greenspan and Paul Volcker to lead a "high-level emergency working group" to recommend ways to restructure at-risk mortgages to help avert more foreclosures.
Her nomination of Rubin and Greenspan scarcely encourages confidence in Mrs C’s oft-proclaimed capacity to hit the ground running in times of crisis. Rubin was the arch deregulator in Bill Clinton’s second term. It was Rubin who successfully pushed for repeal in 1999 of the Glass Steagall Act which, amidst financial collapse in early 1933 (when Roosevelt closed down the banking system altogether) placed regulatory barriers between commercial and investment banking.
As fed chairman in the Clinton and early Bush years Greenspan deliberately encouraged the growth of speculative bubbles. He chose in 1996 not to set margin requirements on stock market speculators and in later years fiercely advocated the deregulation of the financial system. His fingerprints are all over the sub-prime disaster.
This brings us to the man who, on the basis of current delegate counts, will be the Democratic nominee, Barack Obama. His track record in matters of economic policy is slight, beyond some big favors extended in his senatorial term to Wall St which have earned him grateful campaign funding from this quarter. It would be the matter of an hour for any capable and economically informed speech writer to draft a speech for Obama which could politely savage Mrs Clinton’s claims that she has the maturity and experience to handle the nation’s economic affairs in what is sure to be a darkish time, at the start of 2009.
In recent days partially released records of Mrs Clinton’s White House log have disclosed that contrary to recent assertions she was an ardent lobbyist for the trade treaties that have shut down American factories by the thousand. Equally, he could deride her blue-ribbon panel of Rubin, Greenspan and Volcker.
But here we come to the disturbing fact that Obama cannot bring himself, as a Democrat, to rock the boat by pointing out that the Clinton era was a feeding trough for the rich, but sparse in rewards for everyone else. Granted, he has put a toe or two in the water. He’s bringing up the repeal of Glass Steagall. But he should turn up the volume fast.
As for the phone ringing at 2 am: My guess is that President McCain would be flat on his back, snoring off cocktails, a fine claret and brandy to follow; Obama would be getting an earful from Michele about wimping out to Wall Street; Hillary would be reaching out a drowsy hand to check whether by mistake Bill hadn’t ended up in the same bed and Ralph would be on the phone already, using all available lines.
My Escape from the Titanic
I flew home from London to San Francisco from Heathrow’s new Terminal 5, inhabited solely by British Airways. I flew on March 27, the day it opened. As the world now knows, this was a day of epic British humiliation. For weeks the British newspapers and television channels had been vaunting the marvels of T5: miles of baggage conveyors rushing luggage swiftly from check-in point through entrails of steel to airplane hold; the gospel of efficiency bodied forth in this new temple of modernism.
The trouble is that the British just aren’t very good at this kind of thing. Year after year Q used to hand James Bond his attaché case of handy devices a flame thrower in a handspray, a book which fired bullets out its spine. There was the Aston DB5 with ejector seat and saw blades in the wheel hubs. The cycle of Bond films began just when the Labor prime minister Harold Wilson was urging the nation to cast aside the archaic vestments of the past and bathe itself in the ‘white heat of technology’. Things worked in Bond movies but they didn’t work in Britain and as Kingsley Amis once sadly remarked, if Bond had really had to use his mini-submarine in combat conditions it would have surely taken him straight to the bottom. In 1983, just when Q gave Bond a staggering number of gadgets in Octopussy, Britain became for the first time in its history a net importer of industrial goods.
I got to T5 at around 11am, having traveled out on the Piccadilly line. Architecturally there’s nothing particularly memorable about T5’s three main buildings, all essentially aircraft hangers in basic contour. I smugly presented my preprinted boarding pass, checked two bags, wandered about for a minute and then went off to have an early lunch.
We now know that by then T5’s systems had already collapsed. In the case of the Titanic there was this same lag between the fatal incision of the iceberg into the hull, with consequent alarums deep in the bowels of the mighty liner and the dignity and repose of the first class lounge. In the case of T5 the planners had forgotten to create parking slots for the baggage handlers. When the handlers finally got to the doors of T5 their security passes didn’t work. The few that managed to get through didn’t know where their work stations were. The baggage handling software had already failed. My two bags which I had complacently supposed were being whirled at tremendous speed to the Boeing 747 at Gate 38 in Terminal B had in fact joined a mighty logjam in the center of the baggage maze. Everything came to a standstill.
But upstairs chaos was not yet apparent. BA’s greeters, soon to be the objects of vilification and physical threat, smiled sweetly. Since T5’s policy is not to have strident loudspeakers, there were no quacks of warning or alarm from the loudspeakers. It was 11.35am. A nice young woman next to me at the marble bar in the dining room turned out to hail from Youghal, in county Cork, just like me. As we chatted along, she kept peering at the monitor. Her flight was 15 minutes away, yet no boarding gate was advertised. Off she went, just like a passenger on the Titanic going to check to the bulletin board at the purser’s office. I never saw her again; and I’m fairly sure she never saw her flight. She did have an overnight bag on wheels. An hour later BA was telling passengers to send their suitcases home, stuff their essentials into their pockets and bunk down for the long wait.
I went off to Terminal B on a little railway, the sort that was cutting edge at SeaTac in the 1970s when optimists were writing about impending conversion of the war economy to the "social industrial complex". There was almost no one in Terminal B. At Gate 38 I was the only person. No other travelers, no BA staff, just the quiet bulk of a 747 at the boarding port. Gradually the passengers mustered. In a movie this is where we would meet our characters: the noisy fellow who would panic and elbow the old lady; the lovers holding hands as they plummeted through the depressurized door; the unassuming co-editor of the radical website and newsletter who in the end takes control of the 747 and brings it safely down.
Our flight was scheduled for 13.45. At 13.50 we were told there was a change of plan. Our plane was at A 18. We had to go back, in a building designed to deal with people only going forward into their plane. By now, word was filtering to the outside world. The stock price of the Spanish company that owns Heathrow was dropping. The chairman of British Airways was sketching out his speech refusing to resign. Passengers were punching each other in the check-in lines.
We knew little of this at A18. By 4pm we were boarded, wedged into seats so tightly crammed that when I dropped my book, there was no way to maneuver one’s body to get a hand under the seat. There was the familiar wait for the tractor to haul the plane out to the runway; the familiar inaudible drone from the Captain. By six pm were in the air. We flew over southern Greenland. I was disappointed to see no signs of farming, amid newly benign conditions. We flew over Hudson’s Bay. There seemed to be plenty of ice. We flew over Tahoe. We were four hours late. No bags for most of us of course.
Moral: just don’t travel BA and don’t go through Heathrow. It’s not worth the hassle. With T5 it’s all worse. Go to Paris or Frankfurt and head on to your destination by plane or rail from there. And don’t travel Ryanair either. The tickets look cheap but by th time you pay overweight and a thousand other outrageous imposts it’s cheaper to go on a regular airline. In a properly functional Hell Michael O’Leary, Ryanair’s bosss, will fly endlessly between Stansted and the Arctic Circle. He will be told that every article of clothing he wears will require a charge of one million Euros.
You Read It Here First
If recent columns in the New York Times by Maureen Dowd and Nick Kristoff apropos Hillary Clinton seemed familiar it’s because they were. You read them here in Jeffrey St Clair’s piece on HRC, "Blonde Ambition"
That’s the one that began:
Hillary Clinton cannot win the Democratic nomination for president. The numbers tell the story. Even with robust victories in Pennsylvania, Indiana, West Virginia and Kentucky, Hillary will trail Obama in popular votes and pledged delegates as they enter the convention hall in Denver. . . . Hillary Clinton is the prisoner of an unimpeachable mathematics. So she makes the most of a remorseless situation by doing what the Clintons do best: commit political fratricide. Quite literally, in this case, by knocking off a brother.
In order to realize her vaulting ambition, Hillary must mortally wound Obama as candidate in the fall race against John McCain so that she can run against McCain in 2012.
Worth copying, I’m sure you’ll agree.