Talk about falling to the occasion! You would not have an inkling from the candidates’ third and final debate at Hofstra University on Long Island that Wednesday had been a day of fearful carnage on Wall Street, throwing into question the desperate efforts of the US Treasury and the Federal Reserve to stabilize the situation.
You would not have known that across the last month the Dow Jones industrial index has lost 25 per cent of its value. You would not have known that in the considered estimation of many economists the United States could well be entering a prolonged recession.
You would not have known that every assertion about the merits of deregulation and about the primacy of market forces is now dead, skinned and nailed to the wall like a moose hide in the Palins’ garage.
Listening to both candidates in that last debate made me think of one of those reverses of the earth’s electro-magnetic field that occurs every 100,000 years or so. The last month has seen the sweeping away of all the shopworn economic coordinates by which conventional politicians set their course. Gone are the hallowed landmarks. Yet here were McCain and Obama trudging on, sighting their compasses on bearings that no longer exist.
There were, to be sure, dutiful references by both Obama and McCain to the economic crisis, but mostly it was as though they were talking about a minor traffic accident a couple of blocks away. McCain flourished a proposal to bail out homeowners. Obama claimed that the bankers’ bailout bill for which they had both voted contained exactly such provisions. Then the two retreated to mechanical reiteration of their tax plans, their health plans, their plans for Energy Independence, all of them topics interminably raked over in the earlier debates.
There’s a reason why McCain graduated from Annapolis sixth from the bottom of his class. After that promising opening about bailing out homeowners he got lost, like an elderly, half-blind dog getting off the path in the woods. He stopped and started barking at Obama’s tax plan.
I thought he looked really terrible. Here in the CounterPunch newsletter and on this site we’ve raised the possibility that his melanoma problems may be a lot worse than he lets on. Lori Klaidman, a medical researcher, sends us this bleak assessment:
Thank you for your recent article raising questions re: McCain’s health prognosis. I am a medical researcher and have a great deal of experience with melanoma having recently just lost a brother to it. What people don’t seem to get about this cancer that at stage IIa, his chances of surviving to 10 years at stage IIa WERE 64 per cent. But nearly 10 years have past since the year 2000 since that diagnosis. It is MUCH lower now. Might it be more like 50 per cent survival to the end of his first potential term? This is an optimistic view, and a strong possibility because no one believes those cells have gone away or that he is in permanent remission. Further, the minute those melanoma cells migrate to a lymph node, his chances for survival are anywhere from 15-63 per cent. Note that his doctors were surprised that they had not already metastisized to the nearest lymph node in 2000, when it was investigated.
Despite the rosy picture that McCain’s doctor’s paint, they fully admit that melanoma cells are freely migrating throughout his blood stream and body. Because cancer cells lose their ability to slow down in a G1 phase during cell division, they are unable to rest and repair faithfully DNA strands during replication without error. Therefore it is only a matter of time before you get one cell that that has lost all control and becomes extremely aggressive with tumors doubling in size about every 45 days. In fact, the purpose of melanocytes, from which melanomas were derived from, means that they are already super hardy, whose main purpose is to protect oneself from the sun, and only a few minor mutations will create a deadly aggressive unstoppable cancer.
Furthermore, what little treatment there is for melanoma, such as interferon, relies on pumping up the immune system, which might give an extra 5 per cent to the statistics at best (melanoma is known for being chemo and radio insensitive). However, it is well known that anger and stress can dampen the immune system response. Can there be any doubt even among his supporters that McCain has a few “anger management” issues? Therefore what all of this could do is put his survival statistics at, perhaps 45 per cent to survive his first term as president? Fortunately, unlike most of us, he does have the best health care that money can buy. However, this time, even that is not likely to save him when it comes to melanoma, the deadliest, most untreatable cancer that exists.
When he quit barking about taxes and Joe the Plumber McCain finally remembered his briefing script and brought up Obama’s ties to Bill Ayers, the former Weatherman.
I strongly advise the Obama campaign, not to mention all those readers of this site who do not yet read our newsletter, to subscribe without delay. Our latest issue, just released, discloses that when it comes to complicity with the Weathermen and specifically Ayers, one of the present chairmen of the McCain campaign played a far more supportive role to Ayers, at a time when Ayers was combating the war by all means necessary and when his ears were still ringing from the detonations of Weathermunitions. Get the full story here.
And when it comes to the new economic coordinates, the new edition of our newsletter writes a powerful obituary for the neoliberal Washington Consensus that has dominated the economic affairs of the planet since the early 1970s.
“Wall Street’s financial meltdown ,” write Michael Hudson and Jeffrey Sommers, “marks the end of an era. What has ended is the credibility of the Washington Consensus – open markets to foreign investors and tight money austerity programs (high interest rates and credit cutbacks) to “cure” balance-of-payments deficits, domestic budget deficits and price inflation.
“Washington’s idealized picture of how “free markets” operate (as if such a thing ever existed) promised that countries outside the United States would get rich faster, approaching U.S.-style living standards if they let global investors buy their key industries and basic infrastructure. For half a century, this neoliberal model has been a hypocritical exercise in poor policy at best, and deception at worst, to convince other economies to impose self-destructive financial and tax policies, enabling U.S. investors to swoop in and buy their key assets at distress prices.”
This era is now over. Around the world, and here at home, this is as ripe an opportunity for the left as we will ever encounter in our lifetimes. As Robert Pollin told Mike Whitney on this site last week (whitney10162008.html) “We are in the midst of a major historic turning point, equivalent to the emergence of neoliberalism under Thatcher and Reagan”, only this time the signposts point the other way. As Pollin said, “The big money flowing into Obama, and to Democrats more generally, certainly will make it more difficult for our elected officials to do the work of the people. But here again, Wall Street has now been discredited to a degree unprecedented since the 1930s. That should give the left serious political leverage…he real issue — whether it be through public or private ownership or some mix — is to move financial institutions and markets in the direction of egalitarianism.”
It’s a time for new maps, aided by such old guides as those drawn up by the peppery German in the British Museum. You should certainly have our latest newsletter in your backpack. You get Hudson and Sommers; you get Cockburn and St Clair on the McCain campagn chairman who sheltered Ayers, and our take on Election Campaign 2008. You get David Bonner’s marvelous, funny portrait of an FBI informer, the late George Demmerle.
Coda: Is This Man Ever Wrong? (Maybe once in a blue moon.)
I give you some paragraphs I write on this site back on
November 10 2006, right after the mid-term elections.
Now, Can We Talk About Something Serious?
Now that the biennial democratic pretense here in the U.S.A. has run its course, can we talk about something serious? We can? Good. Hmmm. Ha! Here’s a good one we can sink our teeth into for a few paragraphs: the distinct possibility that the world economic system could soon blow up in our faces. You say nobody mentioned this in Campaign 2006? Of course they didn’t. Who said political campaigns have anything to do with reality?
Let me direct you to a recent series of polite coughs, reminiscent of a sheep quietly clearing its throat somewhere on a fog-bound hillside in the north of England. Aforementioned coughs emanated at the start of this week from the Financial Services Authority, (FSA), a body set up under the purview of the British Treasury a few years ago to monitor financial markets and protect the public interest by raising the alarm about shady practices and any dangerous slides towards instability.
In a briefing paper under the chaste title, “Private Equity: A Discussion of Risk and Regulatory Engagement”, the FSA raises the alarm.
“Excessive leverage: The amount of credit that lenders are willing to extend on private equity transactions has risen substantially. This lending may not, in some circumstances, be entirely prudent. Given current leverage levels and recent developments in the economic/credit cycle, the default of a large private equity backed company or a cluster of smaller private equity backed companies seems inevitable. This has negative implications for lenders, purchasers of the debt, orderly markets and conceivably, in extreme circumstances, financial stability and elements of the UK economy.”
Translation: It’s about to blow!
“The duration and potential impact of any credit event may be exacerbated by operational issues which make it difficult to identify who ultimately owns the economic risk associated with a leveraged buy out and how these owners will react in a crisis. These operational issues arise out of the extensive use of opaque, complex and time consuming risk transfer practices such as assignment and sub-participation, together with the increased use of credit derivatives. These credit derivatives may not be confirmed in a timely manner and the amount traded may substantially exceed the amount of the underlying assets.”
Translation: The world’s credit system is a vast recycling bin of untraceable transactions of wildly inflated value.
“The significant flow of price sensitive information in relation to private equity transactions creates considerable potential for market abuse Although transparency to existing investors is extensive, transparency to the wider market is limited and is subject to significant variation in methodology (e.g. with respect to valuation, fee disclosure etc) and format.The duration and potential impact of any credit event may be exacerbated by operational issues which make it difficult to identify who ultimately owns the economic risk associated with a leveraged buy out and how these owners will react in a crisis.”
Translation: Crooks could blow us all up any minute now and we don’t even know who’s holding the detonator. And you thought Osama was a problem!
The problem is that the oversight and stability of the world credit system is no longer within the purview of familiar international institutions like the International Monetary Fund or the Bank of International Settlements. Private traders are now installed at all the strategic nodes, gambling with stratospheric sums in such speculative pyramids as the credit derivative market which was almost nonexistent in 2001, yet which reached $17.3 trillion by the end of 2005. Warren Buffett, America’s most famous investor, has called credit derivatives “financial weapons of mass destruction.”
As the great American historian Gabriel Kolko remarked in a detailed run-down on the crisis in CounterPunch at the end of July:
“Contradictions now wrack the world’s financial system, and a growing consensus now exists between those who endorse it and those, like myself, who believe the status quo is both crisis-prone as well as immoral. If we are to believe the institutions and personalities who have been in the forefront of the defense of capitalism, and we should, it may very well be on the verge of serious crises.”
Translation: Capitalism has its downsides, and right now we’re at the edge of the precipice.