Heading towards the middle of the last week of September, with the first debate only days away, it suddenly became clear to everyone that America was lurching towards genuine crisis. Not problem, not dilemma, but crisis. As Fall — season of death and tragedy — came to the northern half of the country, the Senate banking subcommittee assembled in Washington to hear evidence from Fed Reserve chief Ben Bernanke and evil disembodied floating head Treasury secretary Hank Paulson.
In the days prior, Paulson had made a few preparatory noises about how there was no alternative to this move, dire consequences etc, and in his testimony he really dialled it up to eleven. After a few preparatory remarks by Committee chair Chris Dodd, Paulson basically said that if the plan wasn’t voted in immediately the whole American economy would grind to a halt, as major corporations wouldn’t be able to make the short-term loans they need to cover week-to-week payroll demand surges, etc.
If he was hoping that this would stampede the committee, he was direly mistaken. One by one the committee members went on the record with their “frustration, desperation, anger” at this desperate and hastily put together measure. “We don’t want to be stampeded,” Dodd said. “There is no second act.” “I’m going to have to answer to the people after january 21,” another said. Jim Bunning, Republican Senator from Kentucky said “this is financial socialism, this is un-American”.
This was rather more token resistance than either Paulson or Bernanke had counted on, and you could see the consternation in their faces. You could also hear in Paulson’s voice, unless I am mistaken, genuine fear, as he detailed the cascading process by which the whole economy would fall apart.
The whole thing wrapped came off the airtubes mid-morning, with everyone suddenly realising that this bailout wasn’t a done deal anymore. As the full cost began to focus people’s minds – a four person American household is paying ten thousand dollars for this thing, with no guarantee that it’s the last ask — the sort of zombie drift to passing the thing was halted. What were we really getting for this?
We were all interrupted in this by a live-cross to the UN for the opening of a week of the General Assembly, and suddenly there was Dubya, talking to the leaders of the world. It was really jarring, like one of those moments when a disappeared character is reintroduced into a soap by means of a dream sequence. “Who was this trembling, grayhaired guy, talking about America’s role in the world in defeating extremism, when the autoparts supplier/Starbucks/airline/lapdance club I work at is just about to close?” a hundred million people were thinking.
Outside a whole side of New York had been shut down for five hundred black limos to shark through the streets, and a big anti-Iran demonstration was underway, in anticipation of President Ahmedinajad speaking to the gathering later in the afternoon.
“We shouldn’t even let him into the city,” the demonstrators yelled, not really understanding the principle of hosting the UN, but they seemed to be getting a lot of support from passers-by.
“Damn right. I can’t get to my car – why do we have to have this thing at all?” said one man taking a leaflet
“Look that’s not what we’re talking about AT ALL,” yelled an angry woman, but he was gone.
It was entertaining, and on any other day it would have been the lead story, but this was a day when too much news wasn’t enough and by midday we had a gazumper, though almost no-one noticed it.
But all this palaver, was superseded by a single comment from Defence Secretary Robert Gates, who cautioned against a rapid US military expansion in Afghanistan, stressing instead the need to build up the Afghan army.
“I think we need to think about how heavy a military footprint the United states ought to have in Afghanistan,” Gates told the Armed Services Committee, meeting down the hall from the Banking subcommittee, in the corridor of crises.
Note that? Seems innocuous, but this was the day that the US gave up on Afghanistan. Gates will be out in January, but he’s basically saying that the idea of an Afghan surge ain’t going to work. This comes a week or so after a vote in the French parliament about whether the country should stay there. It was lost, but the fact that it even got there at all was a measure of how far it got was a harbinger.
Europe will be out of Afghanistan in two years. The US may linger a little more — but Gates’s testimony today was a quiet reminder that there was no point making a big commitment to it, because it was a done deal. The Afghan army couldn’t be stood up because the state doesn’t exist beyond Kabul, and barely there, and President Karzai – who met Sarah Palin today, looking as he always does like a failed auditionee for a Merriford and Mr John commercial — is a useless pashmina-horse.
Each crisis doubles the other of course. The sudden collapse of the American economy has made the continuance of two wars practically impossible, and their leaching effect on liquidity would exacerbate any attempt at a genuine recovery.
By early evening everyone was back on the bailout plan and how it was a crock, probably wouldn’t be enough, no one had a clue whether it would work or not – but, as minority leader Mitch McConnell said, “It would pass easily”. I mean who was really going to st-
11 minutes ago
WASHINGTON (AP) — Sources say FBI investigating Fannie Mae, Freddie Mac, Lehman Brothers and AIG.
Omigod! That flashed onto my screen the same time it came on the networks, and surely it must be the moment — about 7.17pm EST – the Paulson plan died.
There isn’t much more information than that at this stage, but I would suspect it’s enough. Every congressional member is saying they’re getting calls 10 to 1 against the bailout without conditions – will it even be possible to vote for it with this outstanding?
You should mark this day in your memory, folks. There’s no planes flying into buildings, but this is the day when America was officially flipped over. Lost in a war with no solution, in a financial crisis which goes to the root of its system — crisis in the literal medical sense that there is no way to tell whether the cure would save it, or hurry it on to burial.
By evening I was lying flat out in the jet spa of the Days Inn Burlington — sober you f-ckers — with reddish trees tapping the window in the wind, watching Larry King interview President Ahmedinajad, an event that othertimes would have got banner headlines, but today seems like a tepid day on the line-up.
Hilariously, Ahmedinajad sounded like a San Francisco Democrat on Palestine, and like a Southern Republican on homos-xuality (“it’s a health problem, but we don’t care what people do in their homes”). Give credit to that old goatfucker King – the only man with more wives than any given Muslim – it was a breakthrough interview, if only because President A sounded four times as intelligent as most US politicians (“America should limit its political influence to its immediate geographical region and use the money for the people’s health”).
Amen to that. Earlier in the day I’d become a de facto provider in the American health care system. The woman in front of me in the pharmacist’s queue was crying — Americans cry a lot these days. She had had her insurance card refused — some rock-bottom scheme she joined maybe after seeing it on a 2am infomercial, not realising it only covered New Jersey. She was ineligible for Medicare, so exposed to the full cost of the anti-seizure medication she needed — one hundred and thirty bucks, which would have been about forty under the Australian PBS.
She had her meltdown, tears of despair. If it was a scam, it was a great performance. I gave her thirty bucks, another bloke twenty, the pharmacist knocked down the price, we scraped it together. She had never asked any of us. She travelled for some online services company, but mostly on commission. Her business suit was cut-price, her car was ten years old.
I would venture to suggest that this is not a world standard health system at work.
History is hard to feel when it’s happening, but, hell, this is it. Whatever this country comes out as, from this, it won’t be the place that went in, in 2000 — the giddy world of irony and dotcoms.
It was amazing to our ancestors that the world died in the Fall. They made burnt offerings, cut the throats of their enemies, their weak, their children, in some effort to stave it off. But die it did, and when the next spring came, not everyone was there to see it.