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.

Australia's Saviour Malcolm

Someone should kindly inform Saviour Malcolm that he was elected to his latest post by the national Liberal caucus, not the Australian people. The rhetoric of the last week, that has (hopefully) peaked this morning, has him strongly urging the prime-minister to work in a bipartisan way. It seems that the problems in Australia have become so severe that Saviour Malcolm has made himself available to work with the government to solve the crisis. Thanks Saviour Malcolm!

Did you know, he says, that the Republicans and Democrats in the United States have pulled together to save their country…hmmm…really? Firstly the Bill that poses to be America’s saviour failed to pass the congressional House of Representatives. Yep, those guys in the US are really pulling together…especially the House Republicans and Republican president Bush. Secondly, all the bill would do is make the downward financial and economic trend longer and flatter, rather than shorter and steeper.

Both major parties in the US are working together on this one for two reasons. Firstly, with the vast majority of the population against the bill, neither party wants to be labelled as the party that supported it. Secondly, so it seems, the majority of the elected legislature is against it; so the bill needs bipartisan support in order for its passing.

Saviour Malcolm is standing so high up on his pedestal that he cannot see the significant difference between the US and Australian financial system. Please for the sake of the nation come together as one and save the populous from the devastation that is consuming us all (says our newly born Saviour Malcolm). The US financial crisis is serious, and all the talk about saving Main Street misses the point that the troubles on Main Street were the starting point for revealing the high-rolling stupidity of Wall Street. However this is no excuse for Saviour Malcolm to give up his post as opposition leader and form a coalition of the unified transcendent.

Admittedly the overall economies have notable similarities – burgeoning levels of household debt and a deep trade connection with China for example – that indicate both economies will track similarly over the next few years. However as far as a great rescue from Saviour Malcolm, no thanks. In this interconnected world, perhaps Saviour Malcolm can pull a few strings for them folks over in the States?

Please do not misunderstand me here and think that I am railing against the Liberal party, and am hence demonstrating partisanship. To illustrate that I, like Saviour Malcolm, am being bipartisan, I have a prime-ministers forecast. History will show that the PM will not become known as Kevin 07; nor will he become known as 747 Kevin; our bungling, cliché prone, foggy sighted, ‘in-action man’ PM will become known as Rudd the Dudd!

McCain Aint Stupid

Before beginning to explain the title I should clarify that and say that either he or whoever is whispering in his ear aint stupid.

The long wind of the presidential race had a predictable path. George Bush was (and is) so out of favour with the general population that whichever Democrat wins the primary is a sure bet for the big job.

Along the way something of importance did tempt fate to change its course: the surge worked. Now some critics, including Obama, say that there were other important factors that contributed the improved conditions in Iraq - in particular the Awakening Council of Sunni muslim groups that turned against the violent insurgent movement. However even on this point it should be noted that the increased pressure being applied by the American military is arguably a significant reason for the forming of the Awakening Council.

A little side note here about Barack Obama’s world tour. After emerging from meetings with the leadership in Iraq, the president to-be made a great raucous about him and the big chiefs in Iraq converging on a pull-out timetable. However he probably didn’t make such a drama about the fact that he never discussed the issue with the big cheeses. Also, at any point during the (so far) years long Iraq war his position has been to pull-out ‘soon’. Hence when with the drastically improved situation leading the Iraq government to feel strong enough to consider this as an option, big boy Barack says him and the big cheeses are on the same wavelength. However while they may be on the same wavelength, they are on different planets. Barack Obama’s policy was to winning or losing pull-out. This is a far cry from pulling out after winning.

So back to the main theme. Though George Bush had a significant win in Iraq – that probably surprised him as much as all the critics – he has had a significant loss on the home front. The economy is being battered by more than the occasional hurricane. All the talk is about propping up the high-rollers on Wall Street so as not to have the problem spread to Main Street. However to the many people doing it rough, including all those that couldn’t make their mortgage repayments and hence started the Wall Street crisis, things on Main Street are already pretty much trashed.

All that the Democrats had to do was ride the wave of public sentiment against the Republican establishment. Part of that wave was for Barack Obama to appoint Hilary Clinton as his running mate. Not doing this move allowed McCain to pull a swifty. By appointing any women that is at least able to give a better public speech then him he rides the wave of disenchantment that Obama created. This was Obama’s first wrong move, and this was McCain’s first big move.

When George Bush announces a rescue package to rescue the world-wide Wall Street high-rollers from their collective drunken stupor, Obama throws his support behind the move. Admittedly in some way the Congress will likely pass some form of the bill, with Republicans and Democrats both voting either way. However McCain has taken the opposing position. So we have the Republican incumbent and Democrat nominee versus the Republican nominee. Even if Congress passes the bill, it will be in largely unpopular. Barack and George become friends and McCain wins out.

It is argued that McCain will likely switch his position at some stage. Even if he does, he still has created a division that he stands to gain much on.

So against all odds I would argue that someone in the McCain camp is pretty smart on strategy – that is not necessarily referring to McCain – and someone in the Obama camp should take some surfing lessons.

Pakistan and US

Friends or Foes?

How to make sense of the issue of the growing Afghanistan insurgency base in north-west Pakistan? Following the rhetoric leads to utter confusion.

The first thing that has crystallized is that Pakistan has seen that a growing insurgency base aims itself at Pakistan, not just Afghanistan. There are two consequences of this realization. Firstly the Pakistan government cannot remain complacent and let the problem blow away – or blow into Afghanistan. The second consequence is that if the United States were to escalate its operations into the Pakistan frontier regions than this would have less resistance on the Pakistan side: because Pakistan has sorted out that they have a problem on their own turf and is tacitly thankful for the help.

The Pakistan government tells their people that they think the US is not really very nice, and surreptitiously tells the US, thanks for the help.

The US has been inclined to increase its cross-border operations in large part also because the Pakistan people are becoming more ambivalent due to the pervasive incursion of militancy and terrorism into their society.

Notes to NATO

In recent days Georgia has forwarded recorded mobile telephone taps of border guards at the Russia to South Ossetia checkpoint. In the last week this information has been passed to government officials, including those of the United States. Intelligence officials in the United States, and no doubt other countries and organisations, are conducting an analysis into the essential question of “who fired the first shot?” in the Georgia versus Russia war.

The Georgian president is now passing around the telephone taps that supposedly show that the Georgian assault on the South Ossetian capital was a response to a Russian invasion. It is quite remarkable that Saakashvili (the Georgian president) did not make mention of this earlier. It is even more amazing that this crucial information - that was within hours of being received (by the intelligence community) passed on to senior members of the Georgian government, and upon which a decision was to go to war in response to an invasion – happened to be lost for several weeks in a pile of old intelligence reports.

The final icing on the cake of this amazing saga is that Georgia’s official position until recently was that the idiotic attempt to take back South Ossetia by force was a pre-emptive strike in response to the inevitable Russian invasion. Quite profoundly, the inevitable had actually already happened. It is just the Saakashvili and is intelligent friends lost the record of invasion, and then forgot that the invasion actually happened.