Thursday, April 9, 2009

Democracy on a Teeter-Totter

The Stuarts of Scotland had no use whatsoever for the concept of “We The People” government. Five years before James VI of Scotland became James I of England, the scholarly James wrote “The Trew Law of Free Monarchies” which extolled the divine right of kings.
Louis XIV of France could not have put it better. James pointed out in 1598 that kings predated Parliaments and all other instruments of popular rule. God had instituted kings; mere men had created Parliaments.
In England, 1603, he was stuck with a Parliament. He chided it in most undiplomatic terms when it dared to refuse his royal will, urging it to “use it’s … liberty more modestly”. He finally settled matters to his satisfaction by refusing to call a Parliament into session at all for seven or eight years.
Appalled at the diversity of religious opinion in England, he summoned a group of scholars to create one, single, “authorized version” of the Bible that would be the only one anyone could use. This Bible would very carefully show that kings were ordained of God and subjects must obey.
On a more ridiculous note, James insisted that his name appear in that Bible. The scholars obliged by changing the name of one of the Apostles from the English “Jacob” to the Scottish “James”. Thus we have the brothers, James and John. Parliament refused to Authorize the King James version and, detested by Catholics, repudiated by Protestants, the dusty volumes sat unused for the better part of a century. Today, of course, it is viewed as one of the twin pillars of the English language.
His intolerance for religious diversity resulted in the settlement of New England by English Pilgrims (who fled England because of him) and Puritans (who planned to return to England and establish a more pure church). Others just went underground.
He retained considerable popularity among the people of England because he was cautious in foreign policy—unlike Elizabeth—and kept peace with Europe. He established trading posts in Japan and Virginia. It was basically a peaceful, prosperous time.
There were exceptions. James was harsher on Catholics than Elizabeth had been and in 1605 a disaffected Catholic named Guy Fawkes tried to blow him and Parliament up—but this just bound the people closer to him.
He died in 1625 and was succeeded by his son, Charles I. English democracy was still intact, but it was beginning to look a bit tattered. Those of us who enjoy living in democracies probably owe a great debt to Charles. He totally lacked his father’s circumspection. He became a living example of what the wag said about the Stuarts: “They never forgot a thing; they never learned a thing.”
He married a Catholic against Parliament’s express wishes. Unlike his father, he made no attempt to compromise. Listening to bad advice he immediately involved England in expensive foreign wars. When Parliament tried to restrain him by requiring him to get annual approval for his expenses, he retaliated by dissolving Parliament and ruling without it for eleven years (1629-1640).
He raised revenue by royal fiat; no English king since the 1300s had entirely dared to do that. In French style he routinely arrested people without any due process of law. This went to the heart of the Magna Carta of 1215. The English people became rightly fearful that they had a would-be tyrant on their throne.
But even Charles—more vehemently espousing the divine right of kings than his father ever had—got himself into a deep enough financial hole that he had to summon a Parliament. (Same thing finally happened in France in 1789.) It refused to cooperate with his demands and he dissolved it after only one month (the “short Parliament” of 1640).
But all his advisors told him he needed Parliament. That fall he finally called another one. It sat from 1640 to 1660—the “long Parliament”. It forced the king to sign a law requiring him to call a Parliament at least every three years—and if he failed to do that, authorizing Parliament to meet on its own. This was a powerful new step for English democracy.
Another new and important law declared the king could no longer dissolve Parliament without its consent. It also abolished his French style “Star Chamber” courts that operated outside of the legal system. Things got to be too much for Charles.
On January 4, 1642, Charles forced his way into Parliament with armed troops to arrest five members of Commons that he considered to be most irritating. They had gotten wind of the warrants and all the members had fled.
In very bad odor for his use of force, Charles retreated to his stronghold at Oxford and carried out the old medieval practice of “raising his standard.” Pro-Catholics, high church Anglicans, his Scots and most of the English nobility rallied to him. Parliament raised its own army.
By October of that year Parliament and king were at war. Modern democracy as both England and America know it today hung in the balance. As in the later issue of slavery in America, the sword would determine what ballots could not.
Which would it be: We The People or I The King?

Wednesday, April 8, 2009

Democracy Hangs On

After 1492, a new international policy issue impacted England and the growth of democracy there. Now that Western Europe’s major concern had become ATLANTIC shipping and sea routes, England was seen to be strategically situated either to harass or to protect the routes to America and Asia.
This left nations from Scandinavia and the Netherlands to France, Spain and Portugal to seek England either as an ally or to arm themselves against her as an enemy. After 1600, the notion of making England an ally faded in all parts and it became a case of England against all, right into the Twentieth Century. But in the 1500s, there was still hope of alliance. English monarchs from Henry VIII through Elizabeth played on it.
That England was now Protestant as were Scandinavia and Holland, whereas Belgium and France were painfully split, and Spain and Portugal were militantly Catholic played a major role. Much of England’s internal affairs—including the development of Democracy—must be seen against the backdrop of these two issues: control of the oceans and religious hostility.
Democracy was not so firmly established in England as to be absolutely guaranteed future survival at the death of Henry VIII in 1547. It had sunk roots, but they could still be ripped up. Future English kings would try to suppress it; there would be bloody civil war between Parliament and king; there would even be something so unimaginably shocking as a royal execution.
There would be tensions between Lords and Commons until 1949 when the monarch was stripped of the last of his powers and 1998 when the nobility were stripped of theirs. Anglo-Saxon Democracy, like the ring in Tolkien’s trilogy was forged in a hot fire.
England’s major problem in the 1500s was that Spain (remember that Henry’s first wife was the aunt of Spain’s most powerful king—Charles V) never gave up her ambition to create a marriage alliance between herself and England, making England her subordinate.
One turns down the impassioned suit of Europe’s first true superpower at some risk to oneself. England, not even remotely a match for Spanish power, did a lot of fancy dancing to stay out of Spain’s clutches and to avoid a ruinous war.
Spain also wanted England back in the Catholic fold. Edward VI was a fervent protestant. He was only a sickly boy (remember him as the prince in Mark Twain’s “Prince and The Pauper”) and his rule lasted only six years. He died at fifteen. TB? Kidney failure? No sure answers.
At the beginning of his reign there was a major uprising by country folk who wanted to go back to the Catholic Church. At the end there was connivance by the Privy Council to overrule Parliament’s Act of Succession and deny Catherine of Aragon’s daughter, the Catholic Mary the throne.
Somehow the Protestant “Book of Common Prayer”, instituted by Edward lives on today. Make no mistake, Mary wanted to revert back to the old church. She burned a few hundred Protestants at the stake, earning her the sobriquet, “Bloody Mary”. She was appalled at her title, “Head of the Church”; that belonged, she felt, to the Pope.
She even married the Spanish crown prince, who became Philip II and sent an Armada after England years later. To England and America’s great advantage she failed to become pregnant. Philip gave up and left England. When Mary suddenly died in 1558 she left no heir to take the place of Elizabeth in the Act of Succession.
Nor had she succeeded in suppressing either Protestantism or the vestiges of democracy left from her reign. Her half-sister, Elizabeth succeeded her as Queen and she found it expedient to be politically very, very Protestant indeed.
Under her England embarked on the policy of playing “balance of power” politics in foreign relations. Spain had become much too powerful, dominating most of Europe. Without going so far as to incur open war, she would spend her reign balancing Protestant forces against Spain.
(It must be noted that, historically, Protestant countries have always been much more comfortable with democratic forms than Catholics have. I won’t speculate on why here—but it is so. England’s self-perceived role as a defender of both Protestantism and Democracy may have reached its peak in 1776 when she sent a huge Army to the Americas to put down what she perceived as a pro-Catholic, anti-democratic outbreak in the Thirteen Colonies. History has wonderful ironies.)
Elizabeth found herself waltzing on a very high and shaky wire during her reign. She would first make one European monarch think she favored marriage with him and then the next. She even managed to keep Philip dangling for a time. This required a sure control at home.
She was as good as her father at playing politician. Like him she probably could have been elected to anything in our world today. At the same time she had miserable taste in picking generals to lead her foreign wars. Catholic Ireland was in a state of revolt. She made sure that England was fully set on a Protestant course—and even arranged to have the next king of Scotland separated from his Catholic mother and raised Protestant. (She beheaded the mother, Mary Queen of Scots.)
His patience exhausted Philip II sent built a huge fleet (Armada) to invade England. Elizabeth had no real navy, but her pirates—preying on the Atlantic trade routes—were first class. They united with the French and Dutch Protestant navies to defeat the Armada in 1588.
But she would not pick an heir. Why, no one is entirely sure. The House of Commons threatened to cut off her funds but she still refused. Only on her death bed did she finally hint that it should be James VI of Scotland.
Elizabeth had worked with Parliament, considering it a legitimate part of government throughout her reign. Democracy had carried on throughout her 44 year reign. In order to make James king, Parliament even took upon itself the right and duty to revise the Act of Succession so James could take the throne.
But the Stuarts of Scotland had no such tradition of a Parliament they had to answer to. Now would come a period of hostility, sparks and, finally, open war.
Henry’s inadvertent democracy had survived. The next hundred years would see it fight not only to survive but to overcome. Real victory would finally come in the early 1700s.

Tuesday, April 7, 2009

Modern Democracy's Dawn

“We The People” had very little to say about life at the dawn of the Sixteenth Century. Like children, we just tried to stay out of the way when “parents”—dukes, barons, knights—when at it with swords and lances. But, in England, the first real change was about to begin.
We should note an interesting fact. France went through nearly every phase England went through in the 1300 and 1400 hundreds. She consolidated her language into one Parisian dialect; she had a peasants’ revolt, vast numbers of her nobility were killed off—by English archers, and the Black Death wiped out much of her labor force.
But by the late 1700s England had a working constitutional monarchy with an influential house for the common people, whereas France had transformed herself into a monarchy so absolute that the king could declare that he, and he alone, constituted the entire state. Her parliament didn’t even meet.
A unique confluence of events conspired to make England (and her colonies) something totally different from France—or Germany, Russia, Spain, Italy or almost anywhere else you wanted to look. Only the Dutch came up with something remotely similar—and that was born, like England’s, out of a period of ghastly bloodshed.
England’s problem began when Henry had a problem conceiving children. It was the first duty of the monarch to make a son to succeed him. Otherwise there was no way for power to transfer peacefully. In England’s case this would mean a return to the bloody War of the Roses.
Henry VIII’s father, Henry VII had finally won a victory so overwhelming (this is the one where Richard III cries “A horse, a horse, my kingdom for a horse!”) that it put Henry VII, a Tudor, on the throne. The Tudor problem was that they had only a bastard’s claim to England’s throne. There were others with a conceivably more legitimate claim. The Tudors had to step very, very carefully.
And now Henry VIII couldn’t make an heir. (Of course, in those days, it was all the woman’s fault—never the fact that Henry’s untreated diabetes had probably made him nearly impotent.) Normally in medieval times it was a simple thing for an heirless king to petition the Pope for an annulment and move on to someone who could make a son for him. (Girls were considered dangerously weak in a time when kings were expected to lead troops into battle.)
Henry’s problem was that his wife was a SPANISH princess. (In fact she was the youngest child of the Spanish monarchs who had commissioned Columbus.) New World gold was pouring into Spain and she was becoming a superpower. Her armies even occupied Rome itself.
The Pope was in no position to annul Henry VIIII’s marriage. Enraged, Henry, who had been a dynamic and bloodthirsty supporter of Catholicism against the new movement called Protestantism, called for a law declaring himself to be the supreme head of the English church in 1534. Willy-nilly, England had become a Protestant nation—and much of future world history hangs on this fact.
Heavily indebted from his extravagant life style, the king expropriated church lands and monastic holdings , using the proceeds to pay his bills. He annulled Catherine and married Anne Boleyn. In a stroke he had overturned a millennium of English history.
If you are a king with a somewhat tenuous hold on your throne, you really cannot do something that radical without getting the peoples’ support. You don’t dare. So Henry summoned Parliament to back his play. (Henry had a popular politician’s charisma. He could have gotten elected to any job today.)
He got Parliament to annul his marriage—see? The people support me! Parliament voted to ban Papal bulls and Papal officials from England. Parliament even got to determine who was queen and what services could be held in church. No modern elective body had ever been given that kind of authority before—especially one that included ordinary people.
Henry had handpicked his Parliament; he knew it would be loyal to him. So he did not call for new elections—he just kept the same men in place. Handy for Henry and, counter intuitively, absolutely marvelous for democracy. Year after year the same people stayed in session. They began to work out rules for parliamentary procedure; they began to think of themselves as a significant part of the government of England.
Every step of the way, Henry was careful to be sure not to proceed without Parliament’s concurrence. But problems with an heir continued. The Spanish Catherine had given him only a daughter—“Bloody Mary”. Anne had given him a daughter—Elizabeth. He executed Anne. Wife three, Jane Seymour finally give him a boy—the sickly Edward VI. She died doing it. He then married and annulled ugly Anne of Cleves. He married and executed Katherine Howard. Then he married Catherine Parr—who urged him to go farther in his religious reforms and nearly got executed. But she became submissive very fast and outlived him. Every step of the way—Parliament was called upon to okay them, marriages, executions, annulments.
Parliament even became a significant, and one day, the final voice on just who would be king when it passed The Act of Succession—still in effect today. It could if it chose, remove Prince Charles from the line of succession and name one of his sons. This power goes back to Henry. Parliament determined that Edward VI, a teenager, would replace Henry at his death.
Death came on a January day in 1547. Henry was fifty –five.
Parliament looked around and concluded, “You know, we’re pretty much the government of England.” They began that year to keep records of whatever laws they passed. These compiled “Acts of Parliament” are today the only constitution England actually has.
You can thank Henry for it all. He was no democrat. His preferred way to deal with objections was the headman’s ax. But, entirely accidentally, Henry began the process of “We The People” government in the English speaking world—at that time only England but today, the US, Canada, Australia, New Zealand, South Africa, Nigeria, India, Pakistan—need we go on?
As they gavel their Parliaments and Congresses to order, they are still following in an unintentional track carved out by the charismatic, brilliant, dissolute and half-mad Henry, The Eighth.
France (Russia, The Germanies, Spain) had no such issue—and no such king.

Monday, April 6, 2009

Foundations of Democracy

For a government to be by and for the people, the people—that’s those who aren’t born to privilege and rank—must have some chance to be involved. A century after King John signed the Magna Carta, the English peasant still had no such chance.
Upper class Englishmen spoke a language (Norman French) that the English peasant did not understand. Even if he had a case to take to court, the judge and lawyers spoke a different tongue. Even if he could have understood him, the armored, mounted medieval knight was considered invincible against any number of common folk and no one since Spartacus had ever said a word about serfs/slaves having any rights against the all powerful lord of the manor..
Several things would happen during the 1300 and 1400s to begin to change this. First of all a century long war would break out between everlastingly bitter rivals, England and France. But this war would result in three battles that would alter the social order of Europe forever.
It was accepted military doctrine that a peasant foot soldier had no chance against a mounted knight.. As long as that was true, there could be no equality between knight and peasant. (If I have the ability and legal right to kill you and there is nothing you can do to stop me or endanger me, there is no way you are my equal.)
The battles of Crecy, Poitiers and Agincourt (1346, 1356 and 1415) changed that perception forever. English and Welsh longbow men cut down the ranks of charging French knights in their suits of armor as if they were wheat in a field. Whole families of French nobility were wiped out.
A peasant with a weapon he could make for himself could be the equal or better of the best armored medieval warrior known. Chivalry—as a military force—was changed forever. (It might be noted that the knights at Crecy also faced the first known European field artillery. It would take a few more centuries, but the armored nobility was on its way out.)
These battles didn’t lead directly to democracy—but without them democracy would not have been possible. The next event that changed society forever was the Great Plague (or “Black Death”) of 1350 that may have killed half of Europe’s population. It’s affect in England was especially significant.
It created a labor shortage. Norman French nobles who came over with William after 1066 had never needed to learn the unwritten language of their English subjects. Sufficient was a bilingual foreman who could pass on the orders. But not now.
If you wanted the crops on your estate harvested, you had to go out and bargain with the surviving labor force. That meant speaking their language. The linguistic walls were beginning to crack.
In 1381 English became a written language again. A man named Geoffrey Chaucer took the crude peasant patois—with no structure or grammar left to it—and began to write down the tales told by religious pilgrims on their way to the great Cathedral at Canterbury. He wrote them in English—not Latin or Norman French. He became the father of modern written English
The final nail in the coffin of Norman French usage in England was driven in by the citizens of France. As the King in Paris became more powerful, Parisian French drowned out all the other French dialects. By the late 1400s, the upper classes in England became the only people anywhere in the world to still speak Norman French. By 1476 English became the legal language of England. Now a peasant could speak the same language as a judge or a king.
Then, possibly for the first time since Spartacus led his revolt before the birth of Christ, an actual peoples’ revolt broke out in parts of Europe. The man who led the revolt in England was Watt Tyler, leader of “The English Peasants Revolt” in the early 1380s.
He actually led about 50,000 peasants to London and occupied it. All the world seemed to be shaking. But it didn’t go anywhere at the time. When he tried to negotiate with members of the upper classes, he was treacherously killed. And the revolt dissolved in failure.
But a lot of people remembered that once there was a commoner who marched an army on London—and took it. They also remembered his wonderfully scatological slogan: “When Adam delved and Eve span—who then was gentleman?”
The gentlemen, the armored knights and courtiers, would hear versions of that question for the next few hundred years. In the 1400s, one more event occurred that helped make democracy possible in England. The nobility went to war with each other (The War of The Roses). They fought and killed each other until finally only about 50 families from before the war survived.
And now the stage was finally set. No monarch of the time could have dreamt a curtain was about to go up. Unlike Watt Tyler’s brief instant on the stage, this time the show would go on and on—until a document was written that claimed its legitimacy from “We The People … .”

Sunday, April 5, 2009

This Thing Called Democracy

One thing I have noticed so far about Obama is that he doesn’t seem to use the word “democracy” a lot. That’s okay with me. We’ve used it a bit too much lately. GWBush went into Iraq ostensibly to teach the Iraqi to be good democrats. His father led us into Kuwait to defend democracy there. We spent eight futile years promoting democracy in Vietnam.
I could go on and on. Our insistence on defending and promoting democracy denotes a certain cultural blindness on our part—a chauvinistic insistence by us that our way is not only best, it is the only way. We’re starting to lose wars to people who don’t agree.
Specifically they are not necessarily enamored with democratic governance. This does not make them bad, benighted or tyrannical. It mainly means that, like the Russians, the Chinese, the Arabs, they were not raised in the Anglo-Saxon tradition. Democracy is uniquely an Anglo-Saxon construct.
It can be argued truthfully that others could master it if they chose to—but they don’t necessarily have to in order to be rich, happy and fulfilled. We, in the United States, Canada, Great Britain and down under have had about seven hundred years to practice and perfect it—to our own ends. It is not shocking that many countries newly introduced to it fail to do well with it.
Seven centuries is a long time to practice a piece in order to play it well. One reason we Americans feel others should just be able to pick it up and play it is that we are not aware of how long it took us to figure it out. It might be useful to take a few days to learn that.
(After all, we are assured that the G-20 has spoken and all will soon be well on the economic front. So while we watch and see how that plays out, let’s take a moment to learn something that could save the lives of a few of our children.)
We’ve all been told that democracy began in England at Runnymede on AD1215. A group of annoyed English barons got together and forced King John (the bad guy in animated versions of “Robin Hood”) to admit to several limitations on his power. Barely did he get out of sword range, when King John repudiated several clauses of the Magna Carta—or Great Charter.
Even the Pope expressed horror that mere mortals might presume to limit the authority of their God-given monarch. The one thing it did create was a Great Council that was supposed to advise the king. It had no power and no effect.
After a series of bloody disagreements between crown and barons, a chap named Simon de Montfort established an actual elective Parliament in 1264. This was actually a real first. Supposedly no new taxes could be levied without the approval of this body. By the 1600s this clause would have real teeth. It would give rise to colonial “no tax without representation” cries in revolutionary America.
In 1295 “the commons” were added to the English Parliament. That meant ordinary citizens could possibly have a say in taxation and other royal laws. For centuries this was all honored primarily in the breach. It certainly did not lead to anything we would recognize as democracy.
Merely because it existed, it didn’t guarantee future democracy. The French created one in 1307. Absolute monarchs crushed it into insignificance. When a meeting of the Estates General was called in 1789, the doors had been rusted shut since the last session—a full century before.
Many other nations—Scotland, Poland, Spain, Russia, Bangladesh, and so forth—established advising councils, but they were suppressed, never contained commoners or just withered away over the centuries. England provided a unique set of circumstances for Parliament to grow.
Here, almost alone, the early Parliament could grow over the centuries to become an actual governing body that ruled. From it have sprung Parliaments and Congresses all over the planet. And ONLY from this one.
The modern French, Italian and Russian ones simply do not work as well. The reasons why one does and the others don’t are historic and profound. Over the next few days we’ll try to understand why one finally became a government of the PEOPLE, by the PEOPLE and for the PEOPLE.

Friday, April 3, 2009

"I love you; you love me"...

Well, it’s over. The G-20 have come and gone. To all appearances it was a love-in. Everyone agreed that there should be a recovery plan and signed the same document. (Never mind that tiny little details like who contributes how much bailout money were left diplomatically unclarified.)
Nobody since Jackie Kennedy and Princess Diana has left more reporters kvelling and raving the way Michelle Obama did. The queen was so touched she actually did touch Michelle’s back. Michelle got away with hugging the queen back—a breach of protocol that could have cost her her head for most of the history of British monarchy.
I suppose it’s churlish of me, but I keep remembering 1961 when Jackie wowed Paris and Vienna. It became a great feel good summit—but Khrushchev, sensing he had taken the measure of his opposite, went home and built the Berlin wall. When that worked out, he went ahead and put missiles in Cuba—which nearly killed us all. He may have been charmed by Jackie, but he never lost sight of what he wanted to do—and now felt he dared.
I am left with no idea what the Indians, Brazilians, Chinese, et al., really think of Obama. He, like Kennedy, charmed his counterparts—seemingly having the same gift for saying all the right things that he showed in last year’s political campaigns.
You could sum him up, at the moment, as having danced with everyone while stepping on no one’s toes. That’s a talent. No doubt. I—and his defeated political opponents—have the greatest respect for it. There’s no way I could do it. Nor could John McCain.
Since the founding of the Republic, no president has ever gone before a group of foreign leaders and so utterly repudiated a predecessor. I was stunned. What Obama said boiled down to the following: I wasn’t here the last time GWBush met with you. I have no idea what he said to you.
But I am not President Bush. (So erase your last eight year’s worth of notes, and I’ll regive the lecture.) I was literally stunned as I listened to Obama last night. I’m not sure it was really necessary to go that far in order to distance himself.
I cannot be the only one who is thinking, “He left the door open for the next president to repudiate Obama policies.” One thing about American foreign policy from the 1940s to today was the consistency with which each new president carried out the policies of previous administrations. From Truman to Ike, from Ike to Kennedy, from Johnson to Nixon, from Ford/Nixon to Carter and so on. The world could rely on that. Now they can hope for four years, maybe eight of the same policy?
Obama appears to have taken that consistency off the table. He could have limited himself to platitudes like “this is a new day”—“the present calls for new ideas”, etc. To name a predecessor and so explicitly repudiate former American policy also, it seems to me, violates protocol—in a dangerous way.
When Khrushchev concluded that Kennedy was nothing like Eisenhower—much nicer and more ingratiating—the consequences were very nearly fatal for most of the planet.
Yes, there are people out there who really, really do not have America’s best interests at heart. Some have historical reasons to resent us—for others it’s just friendly competition, NFL or World Wrestling Federation style. It is safer to have a president who worries them just a bit.
(The Pittsburgh Steelers didn’t win last year’s Super Bowl by promising that they weren’t like the Steelers of the Seventies—who won four rings and had players so intent on winning no team mate dared to sit next to them before a game.)
I agree the the United States has shrunk in influence. This conference surely showed it. But one can accept a reduced role graciously without making such a point of what bad fellows we were in the past when we were more than merely first among equals.
For all the love-ins and hugging in London, there are still some potentially killer issues out there. We are still dependent on China buying our Treasuries for us to afford our bailouts. The Chinese are becoming very skittish about this.
Millions of suddenly unemployed Chinese citizens are putting pressure on their government to stop funding the American recovery when more help is needed at home. (Yes, dictators must ultimately pay attention to the popular will—as Tsar Nicholas, Mussolini and Caesar found out the hard way.) Chinese leaders are running a bit scared right now.
If I were a foreign banker, China’s call for a new international currency to replace the world currency status of the dollar—so dependent on the American economy—would resonate with me. I would certainly tuck it away as a real option. It that ever happens, we’ll feel it!
And, of course, the fundamental issues of this burst bubble recession remain unanswered. How much are those “toxic assets” (now called “legacy assets”—that has to rank with the silliest of euphemisms) actually worth? How much have we lost? No one knows.
The bailout is guaranteeing a pig in a poke. And where is true bottom? Are we there yet—or should we let things drop farther? I’m reminded of ways in which Navy Seals are trained. They tie their hands and feet and dump them into a deep pool.
The only way for the trainee to survive is to sink to the very bottom and use his legs to propel himself to the surface for a gulp of air. Finding that bottom is absolutely crucial.
I’m unimpressed by the fact that the stock market is up a couple thousand points. When it hit 14,000 a year or two ago, it was resting firmly on an economy shot through with oozing black rot. Like a dentist, we’ve got to go down and get the decay out first. Otherwise the finest gold filling in the world will be of very little use.
The G-20 summit did not attempt that. Publicly they didn’t seem to admit the questions even mattered.
But they do.

Wednesday, April 1, 2009

April Fools

The G-7, no it’s the G-8—oh, this dates me—now it’s the G-20 summit meets in London today (would ancient diviners have found it to be an auspicious date?). Obama is off to meet the class for the first time as president. But acrimony and contention have already reared their heads.
The Premier of France has promised to walk out if his conditions aren’t meant, and everybody seems to be a little annoyed with the American banks and brokerages that talked them into buying lots of bundled mortgages. (American Home values are now falling faster than they have in recorded history.) The Chinese are pushing to dump the dollar as the world currency and create something new, not tied to any one economy. We don’t like the idea. I have to admit that I’ve seen it coming for decades. If it happens, we’ll all notice!
Every nation in the G-20—whose members own or control about 80% of the world trade, wealth and businesses—is hurting badly by now. A similar group of movers and shakers met in London in 1933 to do something about the Great Depression. They failed.
Will this meeting succeed? I cannot say for certain—but there is one little matter that seems to sum up both the day and the summit perfectly. Thousands of very unhappy demonstrators are expected to be on hand to greet Obama and other leaders of the summit.
They’re mad, especially at bankers who, they believe, caused all the misery. In reaction London banks, whose executives are known around the world for sartorial splendor—London being the world center for men’s fashion, after all—have told their employees not to dress in their usual hand tailored suits, but to “dress down” for their own safety.
Can anyone imagine, ask commentators, British bankers in blue jeans? Or khakis? Think of Mary Poppins’ employer, George Banks. Imagine him having a dress down day at the office. You get the picture. How fitting for April Fools Day.
Good luck to Mr. Obama. This may be even harder than dealing with Congress. We no longer walk in with the image of unchallengeable supremacy that we had, say, twelve months ago. We, too, are dressed down.
Then there’s talk—which would have taken as an ultimate April Fools’ Day joke only a couple of decades past—of breaking up General Motors into separate more viable parts. They increasingly expect to use Bankruptcy Court to affect these changes. But even the most optimistic scenarios rely on hopelessly optimistic sales projections. April Fool?
Chrysler—begging for its third bailout in fifty years—has been told coldly to get out of the house and marry Italy’s Fiat. Like the princess in “Princess Dairies 2”, they have 30 days to consummate. Prudential bailed them out in 1955; the government bailed them out in 1980—now it seems they can’t go back to the well any more. April Fool. (I still love our Dodge minivan.)
Ford’s sales plummeted by over a third last month. Another figure that might once have sounded like an April Fools’ Day trick. Americans not buying cars? April Fool!
American employers cut loose nearly three quarters of a million workers –about a hundred thousand more than had been expected—in March. Let’s go out and buy a car today! April Fool.
Isn’t it remarkable how many people can suddenly remember that they forgot to pay taxes when they get nominated for a cabinet post? “Oh, silly me, it just slipped my mind!” April Fool.
And finally, this is the perfect day to remember the promises we were made. We would be so much better off without a fixed pension. Think how much better off we are because we were given the freedom to fend for our retirement in the booming stock market!
How lucky we were to live in a land where the value of our house alone could support us in our old age through a reverse mortgage, pulling down all that lovely equity.
How easy it would be to pay back a little thing like a loan for college with all those high paying jobs we could just walk into, just wait for the recruiters to come to us.
How this all represented, not the high side of a cycle, but rather a “fundamental shift” in the American economy that was here to stay.
April Fool.