Pilot Flies Blind

So the global financial crisis is global. That appears to be one unchanging conclusion in recent weeks. We have key organisations and figures hammering out a global solution over the last few days in Washington. The International Monetary Fund has met, and has denounced the G-7 proposal to the crisis as weak and ineffectual: essentially a statement of ideals rather than clear, pragmatic actions. The reason for the ineffectual outcome can be seen simply by looking at Europe’s collective response. In a nutshell countries have such diverse opinions and interests that genuine agreement can only be at the vague, fundamental level. Admittedly consistency at the most fundamental level - that of ideology - has been thrown out the window.

At least this is a better situation than in Zimbabwe. There, the two main political organisations finally agreed to specifics to move forward. The downfall came when President Mugabe blatantly ignored the agreement and went his own tyrannical way. If I wasn’t such a sceptic I would say that Robert Mugabe has taken some political lessons from the recently appointed Pakistan president - Asif Ali Zardari. Make a few deals and than double-cross your way to power!

With either mixed responses or vague principals at the collective level, something of importance is to look at key individual players in this game. So if there is a chief pilot, who would it be? Unfortunately the answer is the US Secretary Treasury Hank Paulson. I say this because the crisis comes from the US super-power. Also, the US president is too unpopular and distrusted to take the wheel.

So how is the chief pilot going? Firstly, for a week or so he faced everyone from the congress to the media waving a finger-pointing clenched fist and shouting We need this financial rescue package Now! So with built expectations on this immediacy, when he finally gets his way he says that it will take some weeks (and months) to work out the maths formula to spend the money to save the country and the world Now! I would say that the pilot crashed on that one.

Hank managed to survive this crash. What did he do next? Well he decided that in any case the great plan that he devised wasn’t such a good idea after all. Hmmm…after a great deal of ‘trust me I know what I am doing’ and $700 billion US dollars later, he decides to do what he said all along was a bad idea: take an equity stake in banks and other financial institutions by injecting capital. Well I don’t have a golden parachute, but from what I have seen, any parachute will be just fine.

America: The Road Ahead

All eyes looking at the road ahead are popping out with dollar signs emblazoned. The big question is will the bail-out package, now passed and signed into law, actually pass the test. However there has been a tunnel vision in the last couple of weeks: the apocalypse is here and it is big and we gotta fix it now!

Look at what has just happened to the financial crisis across the Atlantic. Instead of a government brokered (and government insured) deal with Citigroup, Wachovia has received a considerably better offer from Wells Fargo.

What are other people saying about the big picture? Paul Krugman, a columnist for the New York Times advocates the formation of a Works Progress Administration, although he is not so optimistic about this becoming a reality. Also on the issue of where to from here, Congressional House Representive George Miller explained that there’s a pent-up demand…for infrastructure.

Several recent infrastructure failings in the United States have tragically caused loss of life. In August 2007 the interstate bridge over the Mississippi river collapsed in Minneapolis. A couple of weeks earlier a century old steam-pipe exploded in New York city.

Developed countries throughout the world are reaching the stage where their developments are nearing their used-by dates. Further, a lot of large-scale construction has been done without an emphasis on maintenance and replacement (including de-commissioning). Inaccessible piping is a good example. The cost and work involved in maintenance, de-commissioning, or replacement is substantial and therefore not very interesting – to anyone, whether it be engineers or government officials.

Importance needs to be given to incorporating design for maintenance. Also, in the inevitable event of infrastructure (old buildings for example) being declared unfit for repair, design for demolition becomes another critical factor - ease of removing old, dilapidated buildings for example.

The financial rescue package will slow, but not stop, the steady descent of the American economy. Other factors will determine just how much cushion there is when the economy hits rock bottom.

Prophet Ross

Yesterday was going to be a relaxing day. Knowing that the financial quake from the failed US Wall St bailout was of tsunami forming proportions, you might be inclined to ask why. The answer is that I am blessed enough not to have any finances to lose. So what went wrong with my day? The answer is Prophet Ross.

Prophet Ross is (or should I say was) known in the general Australian community as Professor Ross Garnaut. Doctor Garnaut is an Economics professor acting as special advisor to the Australian government in climate-change. Though when he hands down his reports, all activity usually grinds to a halt, his latest report was delayed for a couple of hours as the tsunami coming across the Atlantic took centre stage. Nonetheless, the latest report was delivered.

Eagerly I awaited listening to an expert in economics explain the nuances of the road ahead on this hot issue. It would make a nice change from the boring rhetoric that has been making the rounds…or so I thought.

After a little introduction the Professor of Economics explained that if I didn’t take him seriously I would be ‘haunted till the end of time’. I was taken aback. Being haunted all the eternal years ahead did not seem so appealing. However he had my attention now. Fortunately he quickly went on, in his capacity as the most senior expert on the issue of climate-change (with respect to economics) in Australia, to say that there was a ‘saving grace’. Well hallelujah!!

Prophet Ross is born, or should I say born again. Admittedly ‘the end of time’ sounds reasonably intelligent and professional, but ‘haunted’? Though I don’t mind a laugh at blatant stupidity, it is important to note that the word ‘haunted’ has distinctly religious undertones. And then to come up with a ‘saving grace’. Wow this guy Prophet Ross really is a climate-change crusader.

On the international scene however Prophet Ross cannot compete with Al Gore. Al has been rallying the troops for some time now, and since he did not seek the US presidency I have been wondering what will become of him. However a few days ago, Al Gore raised the climate-change crusade ante by making a call to arms. He said that it was now time for civil disobedience.

The question is, how can tomorrow be a better day? Hopefully Rudd the Dudd will achieve advaita (non-dual) bipartisanship with Saviour Malcolm. In this case Prophet Ross and Saviour Malcolm can join forces with Al War Gore. That would make for an interesting tomorrow.

So there you have it. My planned day watching other people lose their hard earned money was thwarted by karma, or should I say the devil? Tomorrow never comes but let me see what sort of today tomorrow is.