Monday, October 6, 2008

Fearing More than Fear Itself

Truthdig's decision to post the video clip (courtesy of NBC.com) of the Saturday Night Live version of last week's Vice Presidential debate (on the grounds that "Parody is the best policy") has attracted a lively assortment of comments. One of the more interesting of these comments came from "Catherine," who seems to feel that these times are too serious for parody:

Unfortunately, George W. Bush made gullible and non-thinking Americans believe he was “just like them” by being an airhead, and they loved him for it. The airheads believed that if he was an idiot and could be president, then why should he be challenged? After all, being against W was being against them.

Palin is doing the same thing, just in a different package. Her behavior at the VP debates clearly illustrated that ideal. While Tina Fey is an excellent mimic, I find it very disturbing because the real Sarah Palin isn’t funny at all. She’s Bush in a tight skirt. It’s a little bit like laughing at a funeral.

The problem with this approach is that you cannot win over people who are finally beginning to realize that voting for Bush was a mistake by beginning with the premise that they are airheads. Put another way, the proper targets of criticism are the candidates; and, if those who voted for Bush now recognize that this was a mistake, then the criticism should be directed at the mistake, rather than the voters. This is one reason why I have tried to focus my own criticism on cultivating the image of Sarah Palin as a demagogue in the making and exploring how that image was further cultivated by her recent post-debate performance. Demagogues rise to power (either through their own willful actions or through the initial boosting of others, as was the case with Adolf Hitler) in times of great misfortune; and that is exactly where we are. We have only to consider the bailout strategy, whose votes of no-confidence are now coming in faster than they can be counted, almost immediately on the heels of the first signs of how the plan will be implemented. As is always the case, the first feedback comes from Asia, documented for the Associated Press by Business Writer Emily Flynn Vencat:

Across Asia, all markets were also in the red. Tokyo's Nikkei 225 index fell to its lowest level in 4 1/2 years, sinking 4.25 percent to 10,473.09.

Hong Kong's Hang Seng index slid 5 percent to 16,803.76. Markets in mainland China, Australia, South Korea, India, Singapore and Thailand also fell sharply. Indonesia's key index plummeted 10 percent, it's biggest one-day drop ever.

Vencat's dispatch also accounted for the first signs from Europe:

Britain's benchmark stock index, the FTSE 100, lost 220.11 to 4,760.14 — a 4.42 percent fall. The declines were led by the banking industry, with the mining and oil industries also suffering drops. HBOS PLC's share price dropped 15.7 percent, while the Royal Bank of Scotland Group PLC fell 13.6 percent.

Germany's DAX index fell 4.22 percent to 5,552.27. France's CAC-40 index dropped 4.85 percent to 3,882.81. In Russia, the RTS stock index tumbled more than 7 percent in first 20 minutes of trading.

This was bad news, particularly in the wake of Europe's own effort to address matters in a "financial summit" in Paris. Vencat included the following attempt at analysis in her report:

But analysts said that, like the U.S. plan, the lack of detail in many of Europe's moves failed to restore investors' confidence, resulting in the stock market tumbles. "What the markets need are some more details about exactly when and how these plans are going to come in," said Richard Hunter, head of British equities at Hargreaves Lansdown Stockbrokers, "And they need some proof that some of these measures are taking hold."

There it is, that "C-word," "confidence," the word on which Bush went "all in" with the stakes he held, regardless of the truly nasty double entendre of "confidence game" that it cloaked. The question had less to do with how strong a card Bush had in the hole and more to do with whether he knew what he was doing or betting on impulse. It was that "lack of detail" that betrayed the impulse; and now we see that, for whatever perceptive criticisms they may have voiced about what has been happening over here, they are not doing any better about the "Devil in the details" over there.

At this point the story gets picked up on this side of the pond by Associated Press Economics Writers Martin Crutsinger and Jeannine Aversa:

The President's Working Group on Financial Markets said in a statement Monday it planned to quickly implement the expanded authorities granted to federal regulators by the $700 billion rescue package passed on Friday. The working group was formed after the 1987 stock market crash.

The group, which includes Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, said it planned to move "with substantial force on a number of fronts."

To that end, the administration was expected to announce shortly that it had tapped a 35-year-old former Goldman Sachs executive to head the government's rescue effort on an interim basis, according to an official who asked not to be named.

This raised an immediate question in my mind: If the President had a "Working Group on Financial Matters," why did we (including the Congress) only hear from two of that Group's members (who seemed to be speaking ex officio, rather than representing the Group) once the White House recognized that things were bad enough to require action? However, because this question will never be anything more than an academic exercise, I was personally more struck by the way that last paragraph aligns with a prediction I made on Saturday:

A lot of work is going to have to be done before this system can start functioning. That work is going to require a lot of expert effort, and many of those experts are going to be put on the Government payroll. Whence will those experts be recruited? Given that the Treasury Secretary himself is a Goldman Sachs veteran, it seems likely that he will be providing a new income stream for his former cronies from Wall Street.

Sometimes I just hate to call things right! I'm not the only one, though, as the latest word from Wall Street, provided by Associated Press Business Writer Joe Bel Bruno seems to indicate:

In midmorning trading, the Dow Jones industrial average fell 443.08, or 4.29 percent, to 9,882.30, dropping below 10,000 for the first time since Oct. 29, 2004. At one point, the Dow was down nearly 600.

Broader indexes also tumbled. The Standard & Poor's 500 index shed 53.12, or 4.83 percent, to 1,046.11; and the Nasdaq composite index fell 101.07, or 5.19 percent, to 1,846.32. The Russell 2000 index of smaller companies dropped 29.31, or 4.73 percent, to 590.09.

There were only 78 advancing stocks on the New York Stock Exchange, compared to 3,080 decliners. Volume came to 512.4 million shares.

There you have it, how the chips are falling as the confidence game stays in play (mixing my metaphors perhaps a bit more than they deserve). This is a vote of no-confidence against not only the Executive Branch, with its uncritical embrace of a highly biased analysis from the Treasury, but also the Legislative Branch for caving in after mouthing those platitudes about doing it right rather than doing it quickly. Could there be a better time for a demagogue to rise to power?

The irony is that the messianic aura that his many supporters bestowed on Barack Obama could have run just as much of a risk of demagoguery. This may be one of the reasons why he delivered his acceptance speech wearing his community organizer hat, talking not only about what needed to be done but also about how we all had to work together to get it done. Palin and those pulling her strings haven't a clue about what needs to be done; and the only thing they want the electorate to "work together" on is getting her ticket into the White House. These guys may yet come away with the prize, simply because she will be more appealing to a disenchanted electorate.

The reaction to the Saturday Night Live skit also brought a comment from Ron Ranft endorsing Ralph Nader. There is no questioning either Nader's accomplishments or the extent to which our political discourse has been seriously hobbled by a lack of recognition of any "third-party" candidate. However, Nader tends to come off as a champion supported by enthusiastic followers, which, whether he likes it or not, is yet another formula for demagoguery. This is significantly different in "social spirit" from successful community organization projects. So I, for one, suspect that I shall have to put up with Obama "being the politician" in order to get elected (which included his being one of the Senators who caved on the bailout) in the hope that, should he win the Election, he will be able to devote at least some of his time to "being the community organizer" again.

1 comment:

Alexander Higgins said...

Everyone knew the bailout wouldn't work, even the crooked politicians who decided to send every household an $18,000 tax bill even though economists told them it would not work.

Today's sell of is only a prelude to the real crash of over 20% that will come in the next week or so. Why? Just look at the history of the Great Crash of 29 and the crash of 87. Right now were only experience sell-offs before the real crash happens.

See my blog post here
http://blog.alexanderhiggins.com/2008/10/dow-crashes-below-10000-another-20-stock-market-crash-looms-ahead.html