Saturday, October 11, 2008

Who wants to be the pinprick inside a bubble?

Byline by M J Akbar: Who wants to be the pinprick inside a bubble?

It often needs a startling image to convey the dimensions of a crisis. Bloggers have time to discover such startling analogies. Someone on the net has had the time and patience to conjure up this image about $700 billion, the most dramatic figure among the many mountains of cash that Governments have doled out to capitalism's poster boys in order to save capitalism.
If you stacked up $700bn in 100-dollar bills [100, not 10 or 1], it would climb 54 miles into the sky. If you counted one billion at the rate of one digit a second, you would need 30 years. 700 billion? Don't begin.

Would you want to add the British crisis-management fund to this? On 7 October Britain announced an $87 billion rescue package for its banks, and offered a guarantee of $200 billion more. How high would you have to go if you added Japan and other nations to the list? And this is only the start of a story whose end is outside the comprehension of all the pontiffs who, with the support of obedient priests in politics and media, have turned unrestrained economic reform into the sole morality of our times. This is the bailout for a few companies. A western nation, Iceland, is trembling on the brink of a meltdown and no one knows quite what to do. Iceland itself does not know whether it needs $5 billion or a multiple of that. A desperate Gordon Brown is trying to protect British investments by threatening Iceland with sanctions, as if it was a renegade Iran.

What do the great capitalists plan to do with this waterfall of cash? Some of them think that the party can continue as before. Executives of the world's largest insurance company, AIG, which has already picked up $85bn and is thirsting for more, celebrated in the only way they know. They gathered at a top California beach resort for an eight-day jamboree and ran up a tab for $440,000, including pedicures, massage, golf and cocktails. [Former American ambassador to India Frank Wisner is vice president for foreign relations at AIG, but he was not part of such shenanigans.]

It has yet to strike anyone serious — at least to my knowledge — that throwing away money is not the best way to protect a system that has been shattered at fundamental points by a basic tenet of the capitalist faith, greed. The last decade has seen the escalation of greed into a primary virtue. The rise of executive salaries and bonuses is only one aspect. In our country, Governments have watched benevolently as some crooks masquerading as wizards have raped funds given to them in trust by shareholders. The Government, impelled by World Bankers, would have tied the Indian economy fiscally into the West much more deeply. Prakash Karat is right when he claims that the Left prevented the UPA Government from becoming a handmaiden of the American economy. With organisations like Morgan Stanley now an integral part of capital markets, India cannot escape the consequences of haemorrhage in New York, but it can yet avoid free fall.

Capitalism is in trouble because reality became a version of caricature. Growth became a cloak for venality. Everyone placed on the watch went to sleep. American commentators now admit that warning flags went up 18 months ago, and action should have been taken a year ago at the very latest. But who wants to be the pinprick inside a bubble?

No free ride goes on forever. George Bush thought his would continue for the duration of his term; better men than him might never have seen the tsunami, but he has been blind to anything but his whims for many years now. In a democracy, if systems and institutions do not hold you accountable, the people eventually do.

There was something a little funny about the apoplectic Republican at a John McCain town hall meeting railing at the prospect of a "Socialist" being elected President. You did not need exceptional insight to read his mind: in that closed and narrow mental chamber, every Black was a Socialist and that was only the least of his sins. A survey conducted by Stanford University, The Associated Press and Yahoo completed in September showed that some 10% of white America was irredeemably racist, and that another 6% was unconsciously prejudiced in the sense that he or she would make a racial decision without believing that this was the decisive factor. It is obvious that the Republicans have concluded that the only factor that can save them now is colour. John McCain's slur, when he called Barack Obama "That one!", was crafted to arouse subliminal and overt hatreds. The Republican effort is to arouse demons in the 6% that is not aware it has demons. In other words, Barack Obama has to lead by about 12% in order to win by perhaps 2%. It is safe to assume that if Hillary Clinton had been candidate she would have been ahead by 15% already.

History cannot be made without luck. Obama needed much luck to become candidate. He is of mixed descent rather than pure African-American; his mother was white, and he is devoted to his white grandparents who gave him love and a home. A high percentage of young voters are no longer of pure ethnic descent; the nation has become a genetic melting point as well. But that could carry him to the nomination, not to the White House. Obama needed divine intervention to become President. He prays effectively. He got it. If this crisis had broken a few weeks later, it would have been too late for him. The seismic shift came at the precise moment when it was needed, when he was lagging in the polls and the election was drifting away from him despite eight years of Bush. As long as the colour of failure was only black or Latino-brown, the White House was effectively safe for Republican America. But the crisis has sent a shudder of dread into the heart of white middle-class America.

Hands will be trembling when they reach the ballot, but they will no longer tremble only at the thought of putting a dark man with a strange name into the White House. They will also tremble in anger at the prospect of a lifetime's savings destroyed and confidence in the immediate future. It is that tremble that could shift their finger away from the Bush-McCain button on 4 November.

Will a President Obama change anything when he inherits a situation teetering on chaos in the last week of January 2009? No. That would mean stretching his luck a bit too far, and he will have exhausted much of his quota of luck reaching the White House. There is a more important reason why he will not do anything radical. No one yet knows what there is to do.

The radical answer for the Right is to discover capitalism without capitalists, and no one has any ideas about how to weave a route towards such idealism.

No comments: