100 days: rage builds quietly from two directions
When Barack Obama came to Elkhart, Indiana in February it was Ed Neufeldt who introduced him. "We want to work," Ed told Obama, who embraced him warmly.
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The big, genial 62-year old used to build the motor caravans Americans call RVs, and Elkhart is the capital of the RV industry. But when credit dried up the RV industry collapsed. Ed's been out of work since September, after 32 years in the industry - 27 of them without a single day's sickness, he tells me proudly.
Back then, in February, Obama's main problem seemed to be the Congressional Republicans, who were blocking and tinkering with his fiscal stimulus Bill. Now things seem more complicated. The fiscal stimulus is taking a long time to kick in, and the very principle of it is deeply resented by men like Ed, even though he will benefit from it in unemployment pay and health insurance payments.
100 days into the Obama presidency I found Ed and his former colleagues hard at work building timber-frame homes for homeless families. It's a church-run project - they work for nothing. What they share with Obama, these men, is a deep religious faith. On almost everything else their attitudes reveal that this is not really Obama country.
"We want them to get out of the way and let us work," one tells me. Them being the government. "We don't want to be construction workers: what are we going to do? Be the man that holds the sign saying stop-go? We're not trained for anything else!"
To these men - as for many Republican politicians - spending taxpayers money to get out of a recession seems wrong on principle. In Indiana the Republican governor has at least taken it - others, , have refused the money. But if it's to be spent at all they would have preferred it as tax cuts or simple cash giveaways. What the Elkhart men want is for Americans to start buying RVs again, not for the government to put them to work on building roads.
Of course that is only half the story of America; as we found out in the election it is, precisely, just under half. The other half of America bought the argument that state intervention, an end to "trickle-down" economics could put the country right. But even in this demographic there is trouble.
A few days after I visited Elkhart I found myself being pinned against the walls at a trendy book publishing party in Brooklyn by student activists who think Obama is just a sell out. Virtually everybody politically active on the liberal wing of the Democrats is involved in a perpetual one-note riff on the theme of Obama's timidity; his "capture" by Clinton-era machine politicians and Wall Street. " was Arianna Huffington's memorable headline on her balance sheet of the first 100 days.
Among mainstream political journalists there is a certain insouciance about all this: if politics is just elections and polls, then Obama is flying high. His approval rating is good, he's just recruited a Republican senator, taking him close to the tipping point where he can get his laws through Congress with ease. But I can't help recalling what happened with the TARP in September.
Paulson's bank bailout plan enraged right wing, small town America - and that rage coincided with the rage of the liberal left. Both saw the bailout as wrong in principle, both pressured their representatives. The result was the final few weeks of the Bush administration found it trapped between left and right wing plebeian rage.
There is no rage right now - the tax tea parties were stunts organized by a Republican base layer whose top political leaders remain disoriented. But give it time. Ed and his colleages were mainly laid off last September. Six months unemployment, plus two Federally funded extensions, should take them to September 09. "That's when the rubber meets the road," says Ed. "People will lose their cars, their vehicles."
Meanwhile we have not yet seen the full shape of Geithner's bank bailout. While in Britain the failing banks were sternly ordered to take state money, and the government took a massive stake (if not control), in the USA there is still something of a going on between Geithner and Wall Street; the banks are determined not to be recapitalized by the state, not to give up a major stake and have lobbied hard to make sure the coming bailout deal is highly favourable to them.
Not a day goes by without the leader writers and senior op-ed people at the New York Times, HuffPo, etc denouncing this as treachery and pronouncing that it will fail. We'll see: at my Brooklyn party there were also plenty of people prepared to believe that Obama is planning an unannounced coup against the banks that will leave Citigroup and Bank of America partially nationalized.
The nightmare for Obama is: what if the fiscal stimulus fails to deliver, while simultaneously enraging the small-town conservatives; meanwhile the bank bailout delivers only to the Wall Street elite, simultaneously enraging the urban left. And what if this coincides with Ed and his mates having their dole cut off, and my student radicals and their mates entering the jobs market to find there are no more jobs in Starbucks?
100 days is too soon to judge any presidency, certainly on the economic front. But America's media and civil society is alive with "Plan B" discussions. Many Republican governors are quietly implementing a Plan B version of the stimulus, allocating money to projects that reflect their own political and economic philosophies. In the pages of the New York Times its more overt: from , Stiglitz and Robert Reich you have a daily dose of advice to Obama to cauterize the banking losses, spend the stimulus money faster, and just generally to get on with it.
Tune into Newsnight, live from Chicago, to see my report on the fiscal stimulus and hear a stellar cast of commentators and politicos battle it out. Tonight at 2230 GMT.
Comment number 1.
At 29th Apr 2009, henrychris wrote:Paul and Newsnight just couldn't wait could they? 100 days and in they go looking for the negative.In case they forget, the election was held, the points you highlight were aired and the arguments raged. Obahama won.
The desperation to be negative and pessimistic and to paint the worst possible picture seems to pervade the whole ³ÉÈË¿ìÊÖ news network. The red line descending to the depths which sat in front of news readers during every report pointed the way: let's go for the bottom, let no flicker of the positive find it's way on to our screens, let doom and gloom rule. Am I the only one getting to the point of just not switching on the news so as to avoid melodramatic hams telling me we are all bound for depression and worse.
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Comment number 2.
At 29th Apr 2009, Jericoa wrote:Ed Neufeld wants to work, what Ed does not understand is that there will never be enough work for him or others like him to do again.
In my reductionist way of looking at these things we have too much technology and are too efficient at making 'stuff' and extracting commodities from the earth for everybody to work, that situation will only get worse with time if we continue on the same path.
Any 'recovery' along similar lines to the current economic model will eventually run slap bang into availability of resources (as seen in the oil price / iron ore / copper price spikes) or conflict through over-population fighting for those limited resourses. That is what the curent model requires to happen in order to continue.
The bottom line is we can not carry on with a global economic model which requires that we make ever more and more stuff, ever more and more effciently, in order that we make more and more profits to invest in making more and more stuff for more and more people more and more efficiently ad infinitum on a beautiful planet that is not 'ad infinitum'.
The ruling elite, particularly those in finance have grown very wealthy on this system by playing with the 'profits' part of the equation described above.
From their incredibly privaleged perspective they don't much feel like giving it up despite the rather obvious impossible nature of trying to sustain its growth. That is a pretty selfish and destructive view.
In this country Tony Blair's poison chalice is that we do not have mainstream political parties seperated on ideological grounds anymore because they are all offering the basic same message along the lines of making the existing system work again.
The strategies both here and in the US are focussed around 'buying time' and 'hoping something will turn up'. Noboddy in the political, financial or media elite is even talking about the rather obvious impossibility of the way things currently work.
Why?
The reason why is that they are all part of the same elite club that relies on the system continuing as is in order to maintain their very privaleged position.
There is no vision, there is no ideology to even debate anymore since the material defeat of socialism in various forms. The only thing we are being offered is different takes on 'how to get it back the way it was'
For the avoidance of doubt I am not a communist. Something completely new is required by way of a world operating system which takes account of how far we have come in terms of understanding ourselves, where we live and the technology and efficiency that comes from it.
If those alternative views are out there (I have some ideas on what it may be) noboddy in aposition to publisise it is in the first instance acknowleging the fundamental problem let alone actively encouraging debate about how it may be resolved!!
I am not religious by nature but that is not to say religious texts dont have useful things in them.
To quote the Old Testament 'where there is no vision the people perish'.
Is anybody else awake out there?
If so drop me a line.
[Unsuitable/Broken URL removed by Moderator]
Jericoa
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Comment number 3.
At 29th Apr 2009, barriesingleton wrote:WATCH OUT FOR MR INBETWEEN (#1)
Point well made henrychris, but let's not forget Obama was happy to be raised to the level of (expensive) saint, on the way to the Whitehouse.
If he now is dicovered as unable to walk on water, he should have made that plain from the outset - perhaps? Personally, I regard showbiznewz and showbiz'tics as fine bedfellows, but nothing to do with reality, integrity or any sort of sustainable future, for man or planet. I suppose my doom and gloom is all-embracing! You have my admiration should you switch off - I have some sort of terrible addiction; or maybe the fixation of watching a snake. . .
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Comment number 4.
At 29th Apr 2009, TheNewPonzi wrote:The failure of the stimulus package is certain.
How can the US (and UK) continue borrowing more and more from China and the Middle-East to finance their electoral lifestyles? At some point the foreign investors will twig that they are just the mugs in a giant ponzi scheme designed to provide western voters with an illusion of wealth to keep them quiet.
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Comment number 5.
At 29th Apr 2009, stanilic wrote:The big issue with this recession (slump?)is the expectation from all levels of society that things can somehow return to resembling what used to be normal. Someone has got to go and tell them all that this is just not going to happen.
Also the interest groups, locked inside the inevitability of their previous futures, seem unable to address the howling reality that the western economic model is holed below the water-line and no amount of government assisted bailing out is going to work.
We need to move on but for as long as our expectations deny the need to move on then we won't.
I like your description of Ed Neufeldt. These guys are grafters in the pioneer fashion. I know a lot just like him. They speak as they find. I like that. However much one might disagree with them on certain things they remain courteous, respectful and embarrasingly supportive. These are good people and may they remain so. But for that they need work and in time they will have to be less fussy.
I look at this country and I look at the USA. The USA has its problems; but in the end the people will resolve them somehow, in their simple and practical pioneer way. I wish I could say the same of the UK.
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Comment number 6.
At 29th Apr 2009, bookhimdano wrote:what can obama do to the banks?
as Steinbeck said
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Comment number 7.
At 29th Apr 2009, shireblogger wrote:Hi Paul,
The bad news for Ed and the student radicals is that the IMF reckon the US banks need 275 billion dollars of new capital to " reduce leverage to 25 times" or 500 billion dollars to "reduce leverage to 17 times" at mid-1990s levels of gearing. This is said to be required to reduce net drains on their equity for 2009 and 2010. Either it will get sucked out of their tax dollars or the capital markets. The banks can play for the best outcome knowing we're all over a barrel with Ed.
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Comment number 8.
At 29th Apr 2009, 29finistere wrote:I think the bail out is going well, if you're one of the big 3 banks in the US. With the vast majority of globally proportioned competition wearing the concrete shoes of insolvency, and bound up with quid pro quo's for the taxpayers' money, they're about to clean up in terms of talent and investment.
Job well done gentlemen... now, if you can keep only keep the dollar alive...
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Comment number 9.
At 29th Apr 2009, stayingcool wrote:Agree with last - that this whole thing leads to unimaginable megacorp power, and that's the big, lasting story we will be left with.
But on a really important issue, please remove that disgusting would-be after-shave-ad photo, gazing mightily off towards the distant hills or the coffee machine
There must be a less nauseous way to sell a book
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Comment number 10.
At 29th Apr 2009, streetphotobeing wrote:So the FSA finally got round to hitting on a hedge fund manager :
And then wimped out :
"He also qualified for a 30% discount on the fine by agreeing to settle early. Otherwise, the fine would have been £50,000."
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Comment number 11.
At 29th Apr 2009, Jericoa wrote:Dear moderators,
Instead of sitting on my post no. 2 for hours and hours since 10:39 this morning no less can I have it back please?
I was rather pleased with it, not quite sure why it was refered, there is nothing in there that breaks the official rules as far as I know except for the unoffcial one of course of it being too close to the truth for the ³ÉÈË¿ìÊÖ's comfort:)
Jericoa
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Comment number 12.
At 29th Apr 2009, chriss-w wrote:I agree with #5. We may not be able to say with certainty how all this will turn out, but there can be no return to the status quo ante. People should really be turning their minds to what the new World is going to look like.
If, as seems likely, this crisis drags on for years then it will not only be a question of depressed spending (Government and Consumer) due to the paying off of debt. It will not only be a question of reduced availability of credit. Another poster has argued in the past that oil prices will rise inexorably; and you don't have to believe in peak oil to see the risk of fuel (and other) price inflation. In a few years time the demographic time bomb will explode and we could have an increasing population of pensioners trying to live on increasingly reduced means.
I would love to be optimistic, as suggested by #1, and I think we are going to see a few months now during which people will calm down and wait for all the new money to feed through the system. Only then will we know whether we are looking at a recovery or, as I fear, sitting in the eye of the storm.
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Comment number 13.
At 29th Apr 2009, LordGreenShoots wrote:The markets are surging ahead in response to Alistair's budget. Don't worry everyone, recovery is on the way. We should have a nice little mini-housing boom just in time for the next election.
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Comment number 14.
At 29th Apr 2009, JunkkMale wrote:As all we have currently for today is a caption competition (which is fun, to be sure, but not - one hopes - to be exclusive of anything else), as we are talking simmering rages might I ask if it is true that the Government, and some supportive media, are pushing the notion that the Gurkha vote was 'all a bit of Westminster Village Useful Idiot fun and doesn't really count'?
Brown defeated over Gurkha rules - - The vote is not binding, but it represents an embarrassing Commons defeat for Gordon Brown
If so, what is the point of having a Parliament and all that other silly democratic stuff, which seems to cost so much, that goes with it?
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Comment number 15.
At 29th Apr 2009, threnodio wrote:#1 - henrychris
"Paul and Newsnight just couldn't wait could they? 100 days and in they go looking for the negative."
How very typical of some of the posts on so many ³ÉÈË¿ìÊÖ blogs. Vehement complaints abound about the Beeb's compliance with the official line - Mardell is "pro-Europe", Robinson is "pro-Labour" and so on - then somebody writes a serious, well-considered and thoughtful piece and you shoot him down in flames.
Obama was elected to office on the back of a tide of popular support. Now he is in place, he must deliver. It is the function of a free press to hold people to account, to question judgment where necessary and take account of dissenting opinion. You may not agree with Paul but he did not "go looking" for the negative. It was there all the time. That is the nature of democracy and the function of good journalism.
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Comment number 16.
At 29th Apr 2009, paulmason-newsnight wrote:Yeah I don't know where that photo of me came from! It seems to have been lifted off my book publisher's website, replacing the one the ³ÉÈË¿ìÊÖ had specially taken of me. This redesign actually slightly annoys me all told: the other site was elegant, user friendly and had a "Newsnight" feel about it. I suspect it was just "mandated" by the ³ÉÈË¿ìÊÖ.
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Comment number 17.
At 29th Apr 2009, streetphotobeing wrote:Nos16 - keep on shooting from the hip Paul
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Comment number 18.
At 29th Apr 2009, rwolff wrote:Dear moderator, Please may I have the deleted link to Jericoas web site? Alternatively, perhaps Jericoa might be allowed to give us all a clue as to what it might be.
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Comment number 19.
At 29th Apr 2009, bookhimdano wrote:it looks the bank stress test leak was right in part at least? 2 are mentioned in the papers.
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Comment number 20.
At 29th Apr 2009, leftieoddbod wrote:who lit you Paul...you are better from the left side with no shadow.....
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Comment number 21.
At 29th Apr 2009, barriesingleton wrote:TOTAL ACCORD JERICOA (#2)
The Blogdog ate your URL (after sleeping on his bowl for a couple of hours). You can find my website (just run my name together) and email me if you care to. I would love to swap ideas.
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Comment number 22.
At 29th Apr 2009, barriesingleton wrote:BLOGDOG GOT ME JERICOA (#21)
Find me on the web and email.
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Comment number 23.
At 29th Apr 2009, barriesingleton wrote:THERE IS A JOB TO BE DONE (#2)
Dear Newsnight, Jericoa's plea at post 2 is fundamental to forward movement on this (advisedly) God Forsaken planet. How about you put in place some way that 'consenting adults' can make contact? You know it makes sense.
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Comment number 24.
At 29th Apr 2009, JadedJean wrote:Jericoa(#2) and threnodio (#15)
Good posts. We seem to have a distraction pandemic at present when what's really needed is hard and straight talk from politicians to soft-headed people that they can't live on credit (for RVs or anything else) if that relies on securitization of such dodgy borrowing.
Speaking of hard-talk, if the bank bail-outs aren't to benefit the white collar criminals who dumped all that bad risk on unsuspecting others in the name of 'Financial Services', what exactly IS it going to be used for? If the 'dream' is over, how come some of us fear there are those out there determined to recreate what really was a nightmare?
Where are the new bills in progress to restore regulation removed by the 1999 Act in the USA and the 2000 Act in the UK?
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Comment number 25.
At 29th Apr 2009, marksmith1981 wrote:Im often very critical of parts of the ³ÉÈË¿ìÊÖ - for damn good reason. i pay my license fee and dont like funding an organisation that would rather cosy up to the powers that be than challenge and question them.
Having said that, just watched the newsnight special tonight and it was excellent, really great TV - not perfect, but not far off. A stellar effort and a sincere thank you to all concerned
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Comment number 26.
At 29th Apr 2009, marksmith1981 wrote:#2 jericoa
spot on mate
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Comment number 27.
At 29th Apr 2009, marksmith1981 wrote:echoing no 18 - c'mon moderators - post the link!
If not out of common decency, or responding to your readerships wishes, or because you know its the right thing to do, then how about because our license fee funds your wages?
Sorry to be crude buts its late. If your supervisor/manager etc. insists you stick to some ridiculous protocol, pity that poor misguided person -and do it anyway, with a little chuckle and a nice warm feeling inside
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Comment number 28.
At 30th Apr 2009, copperDolomite wrote:Jerocoa is talking sense. search google for. The journalists really need to start pressurising the politicians AND business. lobby. The journalists need them all to answer the questions about growth. group. What mechanism do they foresee as providing growth and work for us all. blogspot. Over the next twenty or thirty years. They need to answer how they are going to do this with infinite resources. com.
They can't answer it, but they can't make it happen. Until the media force them to behave themselves, act like adults and face facts, the politicians and the business leaders will continue hanging out together conning each other, to our great cost, not just in terms of money, but in terms of our future.
Ben Elton's Stark has it all. That was published years ago, it wasn't a fantasy. Was it a prophecy?
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Comment number 29.
At 30th Apr 2009, barriesingleton wrote:AND THE BLOGDOG SLEPT (#28)
Well posted copperDolomite.
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Comment number 30.
At 30th Apr 2009, barriesingleton wrote:CREDIT WHERE IT IS DUE. DOG OR HANDLER?
Only just found my posts are visible! 'Oh toothless dog that will not chew contention's bone!' Thanks Newnight moderators.
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Comment number 31.
At 30th Apr 2009, supersnapshot wrote:~jericoa
Come on then let us know what the ' something new ' you keep eluding to is ? How is it going to be implemented and who will be running it ?
Or are you going to be forever in a Pythonesque ' Peoples Front of Judea ' parallel universe ?
Thankyou 28 for the Davinci Code
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Comment number 32.
At 30th Apr 2009, JadedJean wrote:superiorsnapshot (#31) "Come on then let us know what the ' something new ' you keep eluding to is ?"
Firstly, the word is alluding, and secondly, you appear to be merely describing the consequences of your indolence. Why not look back through the blog archive (by clicking on Jericoas' username field to see if this author has posted on this in the past?
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Comment number 33.
At 30th Apr 2009, supersnapshot wrote:~32 JadedJean
No eluding - as in avoiding, evading, etc. So what are the 'new ideas ' ?
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Comment number 34.
At 30th Apr 2009, marksmith1981 wrote:#28 Well said copper
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Comment number 35.
At 30th Apr 2009, JadedJean wrote:superiorsnapshot (#33) "No eluding - as in avoiding, evading, etc. So what are the 'new ideas ' ?"
First of all, learn the value of honesty!. Your sentence structure gives you away.
Respect for truth is the sine qua non for clear logical inference ;-).
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Comment number 36.
At 30th Apr 2009, JadedJean wrote:copperDolomite (#28) "Ben Elton's Stark has it all. That was published years ago, it wasn't a fantasy. Was it a prophecy?"
Leave and other alternative, anarchistic, 'comedians' out of this - they all did very well out of those times. In my view, they contributed, along with Joseph/Thatcher and in the 'deregulation' of Britain. Until more people appreciate the modus operandi they'll just go on (unwittingly for many) reinforcing economic and political anarchism.
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Comment number 37.
At 30th Apr 2009, Jericoa wrote:Crikey!
Really refreshing to see a bit of polarisation, enthusiasm and genuine debate instead of statistical financial quote and statistical finacial counter quote without discussing the premise on which the statistics are founded on has any basis.
I will not pretend I have all the answers, I have a few half formed ideas is all, what I do want to do is to at least open a debate and get the general media talking about it and hey ! maybe we will come up with something that would actually be useful in resolving the unsustainable nature of a model with required perpetual growth to function.
There is something else in nature that also has the characteristics of perpetual growth (until it kills the host that is), we spend a lot of time researching on how to best control that so that it does not kill the host, all i am saying is why are we NOt doing that for the global economic system?
I think we all know why dont we....
I have posted afew similar things on RPs blog with some details on our rather haphazard site if anyone is interested.
For now I better get back to my job before someone notices my lunch hour finished 1/2 an hour ago.
Jericoa
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Comment number 38.
At 30th Apr 2009, supersnapshot wrote:~35 Jaded Jean
So please can I appeal to you as a logocentric structuralist to let us have the ideas constantly referred to so we might get to apply some logic to them ?
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Comment number 39.
At 30th Apr 2009, JadedJean wrote:superiorsnapshot(#38) I suggest 'logocentric structuralism' may be an impediment to your grasping and acting upon very helpful, basic, practical, advice.
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Comment number 40.
At 30th Apr 2009, JadedJean wrote:WHERE'S THE LOGIC?
Watching Paul and Gavin last night I thought it had all sunk in at last, but has it?
The essential problem was flagged up well over two years ago now and looking back to some of posts in these blogs in September 2007 (#20) and November 2007, it's depressing to note how little impact it all made.
I really do wonder if the full gravity really has sunk in even now.
The brokers/investment banks created a bubble via securitization and CDOs/CDSs which, once exposed, couldn't be covered by the insurers.
As I've said repeatedly in these blogs, nobody can fiscally re-stimulate with public money because the predatory loans can no longer be securitized/CDO'd/CDS'd - i.e insured against almost guaranteed default !!!
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Comment number 41.
At 1st May 2009, supersnapshot wrote:Still no ideas then !!
Jaded Jean - some help with the logic - enjoy!
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