Nightmare on Wall Street

“He’s not going to do it,” Paulson told Geithner in amazement, “He said he didn’t want to ‘import our cancer.’” That’s the US treasury secretary telling the head of the New York Fed that Alistair Darling, Britain’s chancellor of the exchequer, had just turned down his request to clear some hurdles for British bank Barclays to buy – and save – Lehman Brothers last September.

It reveals the greatest strength of this book: a near-minute by minute recounting of the events from Bear Sterns’ failure to the collapse of Lehman and the rest of the drama as Wall Street and Washington fought to save the US financial system.

To give a fly on the wall account of almost every conversation, memo, email and phone call between each of the major – and some not so major – players in the drama needs two things: very hard work and tremendous access. Sorkin, a financial columnist for the New York Times, conducted more than 300 hours of interviews with his sources and he makes full use of the seemingly unlimited access that he enjoys with the protagonists.

Most of the people who told their stories refused to be identified, but that adds a tantalizing challenge for the interested reader: now, who could have revealed that? Sometimes the solutions are no-brainers.

Warren Buffet is getting ready to leave for a dinner when he’s called by Barclays and requested to guarantee Lehman’s trades for two months. With no intention of doing so, but ever polite, Buffet asks for a fax that he’d “be glad to read.” Moments later after hanging up, Buffet remembers an incident from 10 years ago and thinks: “Maybe he had to stop being so polite to these Wall Street boys.” Now who could have told Sorkin that?

It’s a tribute to his writing that despite his ball-by-ball narrative Sorkin manages to hold your attention for nearly 550 pages. His character sketches are lean and unjudgemental. Yet, though he doesn’t pass judgement, by the end most of the characters – with the possible exception of Buffet and some of the regulators – come across as distinctly unsavoury.

And yes, there’s the story of then-Treasury secretary Hank Paulson, who quit Goldman Sachs to join government, visiting Russia at the exact time that Goldman was holding its board meeting there. He asks to meet the board, purely as a ‘social event.’ Advised by his staff against it, he decides to meet them anyway without noting it on his official calendar. Sorkin describes some Goldman folks feeling as if they were in a ‘spy thriller’ as they rode down in a special bus to meet Paulson in his hotel suite

in the evening. It was June, 2008 and Paulson still felt the US economy would ride out a rough patch by year-end.

If you’re looking for analysis and interpretation you’ll be disappointed. Sorking faithfully sticks to his task as chronicler. Near the end, he observes that the financial system, created to support real businesses and the economy, had crossed the road. Instead of helping trade and commerce, it was busy feeding itself, money making money. As the crisis receded, “it left the survivors with a real sense of invulnerability at having made it back from the brink. Still missing in the current environment is a genuine sense of humility.” That should raise some red flags about the current state of global markets.

Whether of Climate

Even as you read this article, you may see on the right-hand corner, a rather endearing caption, 'Hopenhagen..' I understand the aspirations of those who have worked for the cause. But I feel, that the initial 'Copenhagen' was fine. Copenhagen, actually sums up the reality. The success lies in the ability to 'cope' with the 'hope'.

Unparalleled literary works of yesteryear have come full circle in today's science. In the kingdom of Denmark shall we declare that there is something 'rotten on this earth', in a circumstance that may be a preamble to the 'to be or not to be ' situation.Copenhagen, the venue of the largest UN conclave on environment ever, has always been among the prettiest and cleanest cities on the globe. It may entertain, even bias the extreme enthusiast by its surreal ambience, that the heat, as yet, is not on.The need of a global agreement to start cutting down carbon emissions to slow down a predicted global disaster, and finally to avert it, is an unescapable fact.

The urgency and significance to bring a binding universal agreement, places some unrealistic compulsions on the developing world. Most of these have little to spare from their fragile economies, have internal political hurdles, and what goes with all that, is poor governance. It also happens, that while they have much to do to give a reasonable living standard to their people, they probably have been nowhere near the worst offenders. The ranking order at the moment is China leading with 6,000 plus points, followed by the US at 5,700 or so. Japan, India, Russia, between the 1,200 to 1,500 mark. The clear and present danger is that China and India have the largest populations, and these economies are bound to grow, for their own sake, as well as to buoy the western economies.

The worrying circumstance is that China hits the highest, even with a fraction of per capita emission compared with the US. As it is the main trading and manufacturing partner of the US, its economy is just about hitting the base where an exponential spurt may start, and perhaps that is bound to happen, considering the needs of the US economy. With a large population base, and given the demands and the pricing of the west, it may have to continue to do so at low costs. That means cheap labour and cheap unrefined fuels will continue, and will be used to finally steer its own economy to the top.India naturally becomes the next concern. Extrapolating a steep rise in production, the total emissions may climb up, even if the per capita emissions are low. Slightly different concerns are raised here. It is a democracy, and in spite of having world-class IT setups, a massive pharmaceutical production, ample opportunities for developing healthcare infrastructure, textiles, and chemicals, a significant part of the population strides on, or is below the poverty line.

Agriculture, electricity, infrastructure like roads and basic irrigation facilities are yet to be streamlined for internal stability as well as for external trading. Its ability to qualify but its failure on the logistic front is being seen as a liability. India's lack of coherence in development, showing precipitous declines between the urban, semi-urban, and rural, in almost all parameters of civic, economic and social evaluation, is a disparity which only its people and changing governments can put up with. It has become its nemesis in bidding at global levels, be it a mega sport event, major tourist destination, or its ability to pick global challenges as the one in question.

It is a privilege of circumstance, that it continues to retain its importance as the next developing economy after China, though by today's parameters of industrialization and GDP, many see a yawning gap between the two economies. China may be a threatening super-performer, with much more to come. India is a likeable underperformer. Only performance matters. In essence though, the Copenhagen conclave is likely to end in predictable declarations. Its prime purpose is to pull out of the stumbling blocks of the Kyoto protocol, the developed world did not take much fancy to.

The present week is the time for, tier-two delegates, scientists, environment ministers, as well as prominent 'green' groups to compose a rough draft. In all probability, there will be a commitment of the Top 10 rankers to start reducing their emissions by 20-25% over the next decade. The glamour and oratory shall begin next week, when heads of states will begin to occupy the stage. The only show of wit and guile will be the developing world asking for financial concessions, in the absence of which, they may commit an effort, but refrain from the promise to achieve a target. Back home, and at the ground level, there will have to be drastic changes. Our politics needs a change of approach and attitude. Inclusive reforms that centre on overall development will have to be installed. If there is not much coming by way of concession, India may jack up the IT sector.

The extra revenues can be ploughed into energy intensive industries. Plans to tap all possible hydro power will need to be cleared without delay, with private participation. The untapped gas fields on the east and west coast should be the source of clean and addition energy. The need to sign a mega project on solar energy, with US and Japan, would be a greater achievement than any financial concessions right now. Lastly, setting aside political motives, acceptable but effective methods for population control need to be pressed in once again, quite the way China has been able to address this problem. Finally, Copenhagen reminds one of the historic Copenhagen Agreement of 1927, almost as difficult to comprehend as the uncertainties of climate. That was 'The Uncertainty Principle' of Heisenberg, and 'The Principle of Complimentarity' of Bohr. These two authors of Quantum Mechanics rejected the causality seen in conventional mathematics and physics, taking the subject to the levels of metaphysics and philosophy. Despite its many objections, some equations of the universe can only be answered by Quantum Physics. These may still be the bottom lines, 'uncertainty' and 'complimentarity'. Surely, the 'Little Mermaid' at the harbor will count the number of times she was vandalized. "All these acts were man-made", she is likely to add.

Getting used to a new world order

When end of year coincides with end of decade, the number of theme-questions for a columnist multiplies by 10. Most are as boring as an honest obituary. But one did hear an unusual question: Have you changed your mind about anything in the last 10 years?

I celebrated the fall of the Berlin Wall, and the consequent downward slither of the Soviet Union, in the 1990s for two non-sustainable reasons: Principle and self-interest. In retrospect, the second is more comprehensible than the first. As a journalist one had a vested interest in free expression, and the Soviet regime was its boring antithesis. But that is so last century. There is today a vacuum where once lay the brooding, looming Soviet shadow, a force which kept its own citizens under a form of house arrest and yet, inspired enough fear in Anglo-American hawks to restrain their imperial tendencies. Would the Bush-Blair partnership have invaded Iraq in 2003 with such impunity if Uncle Stalin, or even Cousin Brezhnev, had been living in the Kremlin?

My faith in principle was foolish. Principle is an impotent yardstick if it is used to measure Saddam Hussein but not Tony Blair. Few emperors have been as airily indifferent to their own deceptions as Blair has been on Iraq. The politician who sent Britain to war against the will of his own party, told British television some days ago that he would have invented another excuse if he had been caught out on the weapons-of-mass-destruction subterfuge. Blair now admits what we knew all along — that the Iraq war was never about its stated cause.

Coincidentally, President Obama chose to dwell on the complexities of a just war in his Nobel Peace prize speech, delivered around the time Blair was shrugging off any pretence to morality. If the Anglo-American occupation of Iraq was based on a lie, were those who resisted American troops fighting a just or an unjust war? How many more nations would Bush-Blair have sought to conquer had there been no resistance in Iraq?

Obama waded into uncharted territory when he stated a proposition with the confidence of conviction: That a holy war could not be a just war. He was, of course, taking a sideswipe at jihad, understandable in the context of his need to be closer to American opinion than Muslim dogma. In the process, he slashed at Hinduism. Its two great texts, Ramayana and

Mahabharata, are war epics, and a Hindu would be aghast to hear that the holy wars of Lord Rama in Lanka and Lord Krishna at Kurukshetra were unjust. The moral code of most eastern faiths is deeply ingrained into popular belief, for we remain believers. Obama will probably be surprised to learn that the iconic holy warrior in the Holy Quran is David, king of the Jewish people.

The balance of power between the principal victors of the Second World War, the alliances led by the US and the Soviet Union, has given way to an imbalance in which the space for a legitimate counterweight has been handed over to shadow armies impelled by private agendas but mobilized in the name of nationalism. Patriotism gives theocratic movements strength that they might never have achieved by a more transparent declaration of intent. This was the story in Iraq; this is the shifting narrative in Afghanistan. In Iraq, most of the insurgents have been co-opted into the system, where they bide their time, waiting for local politicians to self-destruct and American forces to leave. They will shape Iraq to their will when they get the opportunity. In Afghanistan they have history and geography on their side.

A nebulous battle zone is perfect territory for shadow-warriors like the terrorist David Coleman. We must not confuse him with cannon fodder like Kasab; he is much higher in the Lashkar-e-Taiba hierarchy. His expertise in terrorist tradecraft is evident from the confusion: Was he double-crossing the Americans or triple-crossing them?. Coleman wore a cover, which could have been stitched from a perfect spy story: He became an informer for the US Drug Enforcement Administration and the FBI. He could now trawl, with American blessing, the drug-trade marts between Mumbai and Af-Pak. Maybe, we should call this region Maf-Pak.

In the best of all possible worlds, we would have had a quasi-Brezhnev as head of a muscular Union of Semi-Socialist Soviet Republics in which Pravda was as free as The Times of India. What we have is a single superpower, America, in offensive-defensive siege mode, focussed on its own security even if the collateral damage is visited upon an ally. That seems like a policy worth imitating.

Now showing: 2009 Fall Collection, Dubai

Days like this, I feel like I'm stuck in one of those surreal science fiction movies about an unending time loop. Around this time last year, I remember sitting around with the kind of people who matter - bankers, CEOs, analysts and journalists - all muttering and shaking heads in hushed tones about Dubai. We had the prospect of Dubai imploding, a mad scramble to find out exactly what everyone's exposure was to the crisis.

A year on, it's the same old, same old. Okay, Dubai. Don't panic. Or yes, do, because to me it seems like those traders and financial market players haven't learnt a single lesson in the past two years. Despite even the most respected oracles like the JP Morgans and Merrills putting out large Don't Panic signs, everyone decided to panic en masse. Again. Some smart commentators are calling it lehmanitis: when world markets stage a concerted walk out at the first sign of trouble.

Unless they make it so, what has happened in Dubai should not be Armageddon Part II. Dubai wants to delay paying a lot of money to its creditors for six months. Yeah, so? Most of those lenders are already heavily underwritten by their respective governments and, according to analysts I trust (not necessarily the ones the market swears by), the UK banks at least should be able to absorb the hit, with a little bit of discomfort. Or I'll end up paying for it, again. Not the markets.

The funniest bit, to me, is the sense of outrage and betrayal coming out of the largely western media, reflecting the views of the investors and the market. Ooh, Dubai didn't tell us things were so bad. Ooh, this creates such a huge confidence crisis, we assumed the Arabs would pour in oil money to protect the interests of its western lenders and investors. They're not 'one of us' they need to work that much harder. Exactly how are palace politics any worse than Wall Street politics, pray? Which planet were they living in the past year, with thousands unemployed, building projects lying derelict, and so on?

If you look at the Dubai model, which UK media today is vehemently criticising, it's very similar to the UK model. Little island with not too many natural or manufacturing resources, surrounded by more powerful neighbours, a rich trading history, fabulous time zone and location, let's make it an entrepot and playground for the rich and powerful. Not surprisingly, since Dubai is largely run by Brits.

Okay, so here's yet another theory, which could be as right as anything that all the frantic sellers were moved by. First, the announcement came on the eve of a long Eid holiday break in Dubai, coinciding with Thanksgiving weekend, I'd bet key trading desks were probably staffed with those who drew very short straws. On Thursday, the LSE had a technical problem, and was down for three hours. So, the FTSE tanked. Also, from what I hear, most international banks have already frozen their bonuses for this year - usually decided by Christmas - and no trader is in the mood to take excess risks now. Not worth it.

Now why did the emirate behave as it did? They said it was part of a plan. I suspect that the Sheikh is aware that this year, most of his lenders have again started making obscene profits. Like the rest of us, he doesn't see why he should pay up meekly without a bit of a fight. Or go to Abu Dhabi with a begging bowl, maybe make his own people suffer, just to keep western investors happy. So maybe he's just pushing for a better deal.

Or he's decided that they don't really need another tallest tower in the world, or yet another pleasure island in the sea, and he's making a point that the Emirates isn't about to bail out everyone just to save global face. Maybe he's been listening to Mervyn King and others who say that bad entities should be allowed to go under, only socially-productive ones should be bailed out.

In the post-Lehman world, the lines are blurred. Lenders are not always the good guys, defaulters are not always the bad guys. It's not a term that's come up much this weekend, but 'resetting a banking covenant' - which hundreds of private companies have done - is something similar. You tell your bankers you can't pay in time, or at the rate and how they want, you renegotiate your penalty clauses and everyone comes to terms.

After all, these guys pretty much bought, as the adage is, the Brooklyn Bridge. Why exactly anyone needed complicated financial instruments to evaluate the potential risk for increasingly more outrageous building projects is one for the historians. It was obvious, even to the most humble labourer, that Dubai's building mania had reached unreal proportions. I do wish I'd managed to start that project for a spa on the moon back then. Someone would have lent me the money.

Ye bankers, be calculating, but not algorithmic

It’s nice, sometimes, to be able to say I told you so. Well, as I did say in my new year predictions, 2010 is turning out to be the year when Big Banks learn to live with new realities. Barack Obama just unveiled one of the most draconian proposals to cut them down to size.

Back in Wall Street, it seems that despite the desperate and high-profile lobbying — one estimate is that Wall Street spent over $500 million last year — Mr Obama has decided to go with the ballot box, and public opinion — after Scott Brown won a shock Republican victory to the Senate. We’ll have to see how much translates into reality, especially as the legislation has to make its tortuous way through US congress. Now, people are betting how much more Wall Street will spend in lobbying support.

I’ve been getting some outraged responses from the banking lobby, including how pandering to ‘ignorant’ public opinion will kill now, both London and New York as financial centres. Yes, but then where will all the bankers go? Timbuctoo? I know these people. There’s no way they want to live in Geneva, for instance. And even if they do, they’ll come and spend their money on weekends in London.

Obviously, this issue will now pretty much take centrestage in Davos, where the rich and powerful gather to schmooze this week. Bankers are out in full force this year, but then so is everyone else — and the anti-banker lobby is just getting stronger every minute. May be the global get-together will bring home to top bankers that they really need to change their bad old ways.

If the auto industry, the IT industry, companies like Pepsico and even Tetrapak can change the fundamental way they do business, so can bankers. Bank shares have tumbled, yes. There are those who think, at least here, that is a good thing.

Yes, it’s nice to have the markets up and so on, but when a company like Cadbury gets swallowed by a hostile takeover, simply because it was so badly undervalued when the bid started — and still is, most would say — maybe it’s time banks stopped hogging more than their fair share of almost every resource.

After all, shareholders don’t even benefit much when banks make obscene profits — they just dole it out as bonuses. The new ‘low’ at Goldman Sachs, of over 35% of its profits being given to its employees, to the average of 50% across the industry, is ridiculous compared to other industries. It works out to a measly average of about $500,000 per employee.

Oh, and if Mr Obama’s reforms go through, they won’t have this excuse that ‘talent’ will flee to hedge funds and the like if their pay is cut because, well, they won’t need that kind of talent any longer. Yes, all the arcane stuff will move into other entities — but those don’t have to be backed by taxpayers. The world is not affected if a hedge fund speculator loses his shirt.

Every gift horse has hidden booby-traps. Just last week, the SEC cracked down on high-frequency trading — now traders and brokers in US aren’t allowed ‘naked’ access, when a broker gives his access to someone to trade directly using formulae that does zillions of deals a minute, without using the brokers risk management controls.
Algorithmic trading, if I may use an oversimplification, is a bit like when a Chef writes a recipe, but a bunch of robots actually make the food.

As long as the ingredients are perfect, it’s machine-efficient. But the robot can’t tell if the fish is off, or the veggies rotten, or the chilly too much or too little. Mathematicians and programmers set up those algorithms, hence the demand for mathematics PhDs in high finance.

It then uses computers to match prices and do deals, at a speed no human can track or match. Sure, an algorithm can’t invent toxic derivatives products, but can spread the infection faster than you can say Salmonella. That’s more or less what happened last year, and why it took so long for traders themselves to figure out what was going on. At least, being late to the algorithm party, we know what the potential pitfalls are. The trick is not to fall into them as well, which is where I have my doubts.

Ethics and Finance: Time for introspection

In the wake of the worst financial crisis since the Great Depression and with the world's financial order in a state of flux, the future of capitalism is being questioned. Is it the best system by which to create wealth that will benefit the largest number of people? Ever since it first emerged, capitalism has been accused by its detractors of encouraging greed and selfishness. Its defenders have responded either that this is not so, or that selfish behaviour is redeemed by its socially beneficial effects of greater economic growth.

It was Susan Strange, Professor of International relations at the London School of Economics who first coined the phrase, 'casino capitalism'. She warned in the 1980s how the speed at which markets work, combined with their near-universal reach, and could result in levels of global volatility that had never been seen before. In a world where the vast bulk of market trading has no direct relation to any real business requirement, what concerned her was how the instability of active markets could lead to the collapse of national and regional economies.

Nearly thirty years on, we have seen exactly how, at their worst, financial markets can be engines of unprecedented destructive excess. The catalogue of errors that we have seen is long. It includes the appetite for higher leverage… the over-reliance on wholesale funding … over-confidence in risk modelling techniques… and the misalignment of incentives. The past two years have challenged in a fundamental way the argument that the market always knows best.

The financial crisis has triggered soul-searching about our economic system. Surprisingly perhaps, the questioning has come from capitalism's most committed practitioners: bankers. Stephen Green, HSBC chairman, has written a book about morality and money. Ken Costa, Lazard International chairman, writes: "We are doomed to repeat our mistakes if we do not restore sound ethics to economic behaviour."

HSBC Group Chairman Stephen Green, in his recent book "Good Value - Reflections on money, morality and an uncertain world" reflects on how the human desires for exploration and exchange have led us into a globalised, urban world, and considers why it is that capitalism is the best system by which to improve material human wealth. As the world's financial order is in a state of flux, how do we align these drives, and capitalism, with our spiritual and psychological needs? And how should the financial sector respond not only to the current crisis but to the wider needs of the people it serves. Do businesses - and banks in particular - have a duty to society that goes beyond the creation of profit? Does open market capitalism remain our best hope for creating wealth that benefits all of society? Encompassing history, politics, religion and economics, "Good Value" offers new perspectives on how we can live in a richer, more dynamic world

Green emphasizes introspection by the leaders in financial sector-"One common underlying theme links the problems which were developing at many financial services companies in the lead up to the crisis. Simply put, it was a greedy focus on the short-term. A culture had begun to pervade many institutions that it was fine to pursue short-term returns without any concern for the longer-term consequences, or the rightness of what was done. The mantra had become one of 'if the market will bear it, if there is a contract, then I don't need to ask any further questions.' "Leaders in the banking sector, perhaps more than most, need to demonstrate that they recognise the moral dimension of what was happening in the years leading up to the financial crisis. This was not just a failure of prudential oversight, or of risk management, or of scenario planning, or indeed of common sense - although it certainly was all of those things. Of course, we cannot address the subject of morality in business with a rule book or a tick-box mentality. There are no easy answers and there is no 'one size fits all' approach. Yet what is striking is just how widespread a consensus there is about what constitutes ethical business. We should not forget that, at its simplest level, it is about integrity: doing business with trust and honesty, and treating people as ends, not just means.

Stephen Green, has some interesting and insightful observations to make-"The challenge we face - as practitioners, policymakers, and regulators - is to find the delicate balance that will encourage markets to deliver prosperity, while keeping in check those activities that fail the tests of usefulness, transparency and sustainability. It is now clear that effective government oversight, regulation and even intervention, in times of stress, are all essential. The markets cannot police themselves. As we search for this balance at a time when much of the world is still traumatised by the crisis, let us keep in mind two things. First, one of the stark lessons of the twentieth century is that there is no acceptable alternative to a market-based approach to development. Second, strong financial markets are at the heart of every successful economy, lubricating the engine of economic growth and prosperity".

A convenient lie?

Man-made climate change is a scientific fact, right? If you believe it is, you're not being scientific. Because in science - real science, and not the media mumbo-jumbo that so often is passed off as science - there is no such things as a proven fact. Real science, and the real scientists who practise it, are the essence of scepticism. The scientific definition of science is that it is a never-ending contest between competing hypotheses whose falsity has yet to be proven. In short, there is no such thing as a scientific 'fact': there are only provisional theories which, inevitably, will have to be amended or even totally rejected one day, in the light of new theories which will take their place, till they in turn are displaced by newer discoveries which produce newer theories. In real science, the investigation is endless; the case is never closed. Closure belongs to the realm not of science but of dogma, which is the antithesis of science and is the cornerstone of superstition.

In the increasingly contentious discourse on global warming and man-made climate change (that carbon emissions resulting from industrialisation have produced a 'greenhouse effect' leading to higher temperatures which in turn will melt the polar ice, causing devastating floods and drastically altering rainfall patterns, which will lead to drought and famine) only one thing is not open to argument. And that is that climate change is a reality, an undisputable fact. There can be, and are, literally heated arguments about who is most responsible for climate change, and what should be done about it. The developed countries want the developing countries - like China, India and Brazil - to slow down on industrial growth, while the developing countries counter that the fault lies with the developed countries who both in absolute and in per capita terms remain by far the biggest polluters and must undertake to reduce their carbon emissions first before having the cheek to lecture the developing world about its emissions.

But no one - or at least, almost no one - questions if climate change is, in fact, a fact, beyond all doubt. If you try to question climate change - or even to suggest that perhaps it might not be as bad as it's cracked up to be - you are immediately branded a destroyer of the planet, a dangerous heretic who should be burnt at the stake. The 'warmists' - the high priests of the religion known as climate change - will not tolerate sceptics any more than did the Spanish Inquisition.

So why is it that climate change has become an irrefutable 'fact'? Because there's money, huge money, in climate change. Governments can make money by imposing extra taxes for environmental infringements. Industry can make money through selling 'green' technology. Billions can - and are being - made through the trade in carbon credits. Can we afford not to have climate change?

Yes, say the dissenters, the two most notable being Australian geologist Ian Plimer and journalist Christopher Booker. In his book Heaven and Earth, Plimer debunks many climate change 'facts' as does Booker in The Real Global Warming Disaster. Plimer, Booker and others have pointed out that though the polar ice shelf has become thinner in places, it has also become thicker in others; that the snow on Kilimanjaro has melted because of deforestation and not through global warming; that higher temperatures in cities are caused by localised 'heat island' effects and not by climate change.

But perhaps the most telling 'anti-warmist' cautionary tale is about a climate change media conference held, deliberately, on the hottest day of the summer of 1998 in a mid-western US city. The night before the conference, the windows of the auditorium were left open. TV cameras focused on the faces of profusely sweating delegates. Overnight global warming became hot news. One of the chief sponsors of the meet? Al Gore. A convenient lie? Check it out.

Universal healthcare: Obama shows the way

This Christmas falls on a Friday. That should be good. Merging with the weekend, I mean. Santa, the world's most popular courier-boy may come jingling with some painkillers, cough syrups, antibiotics, and a prescription to match. While the snow settles over the expanse of DC, quite a few in Capitol Hill and the White House must have burnt late night lamps, to thrash out the numbers necessary to negotiate a Healthcare Bill that will be a landmark in changing the future of mankind vis-a-vis its ability to afford treatment for survival with dignity. What was Jefferson's dream two hundred years ago, what was the ambition of many other presidents, including a recent one, that is, President Clinton, may just make it. Universal healthcare coverage for all Americans, irrespective of age and prior disease may just take effect, sending signals to governments and people across the world that they may like to have a similar system in place.

Repeated failures to install such a system, by the world's largest economy, had given rise to the hypothesis that the inability to pay for medical bills by some, or the inability to pay for a particular disease, by quite a few, was a prewritten clause by nature regarding their longevity - that such situations were as inevitable as death and taxes. Just as disease was a part of life, so was the circumstance for some not to be able to afford medical payments, an unavoidable compulsion of natural philosophy.

The Democrats had just the 60 numbers required to see the bill through the Senate, with a timing close to Christmas. Efforts were on to rope in extra numbers, fence sitters, even favourably inclined Republicans, because there could be last-minute dissenters, and it is now or never, for quite sometime at least. The way this bill reached, and was parked in the Senate, it must be nothing short of a political genius's best effort. To think of it, to force it for vehement discussions at the level of the primaries two years ago, was at that time felt outrageously incongruent. What with the country locked in war, and one of the worst downturns in economy, that was to worsen further after change of guard. President Obama and his thinktank perhaps knew better. Previous experience could not but sum it up as an election gimmick, that too an obvious one.

President Obama conducted three discreet actions during the first two weeks of taking office. An order to release the inmates of Guantanamo Bay, a proclamation to strive for a nuclear-arms-free world, and posting the HealthCare Bill in Congress. The first two were stated as reasons for his qualification for the Nobel Peace. He then went about the promised economic stimuli and bailing out the sunken financial institutions.

The healthcare bill sailed through Congress with the added conditional one-time support of Republicans. It seems that on purpose, extra appendages were added to the Trojan horse, with the sole purpose of sacrificing them on opposition, and gain consensus for what remained. Funding being the main factor, the bill was amended not to allow insurance cover for abortions, before it was passed on to the Senate.

An epoch-making bill, parked for just the right duration in the Senate, generally discovers its adversaries, the possible objections, and the directions from which the attacks are to come.

That actually did happen. The main objection of most Americans, Republicans in particular, have been, that the more the government hold, the larger the costs and inefficiency. The 'right'-minded American abhors government holding and interference. The chunk of American economic success has actually come from encouragement of private enterprise and open-market competition. This is what has given America the largest, most intricate, marvellously equipped, but a woefully expensive healthcare system. Being the hub of all frontline medical research further contributes to the cost. Such is the nature of this graph, that with time, one can only see an escalation of costs, with newer technologies and drugs. There was no way to give cover to the tail comprising 16% of the population. The idea of universal healthcare to every American, with minimal government holding looked utopian.

Utopian it still is. But here lies one of the smartest strategies in the history of legislature. The authors of the bill never went for countering the facts that it was unaffordable from the very inception. They just banked on the opportunity of getting the bill out live from the rigours of floor arguments, no matter how mutilated, scrapped, overwritten, as long as the heading remained 'Universal Healthcare'. The budget may still be the same, and not much may change at the ground level. The concept should survive once. Just once. If that does, human effort and ambition will take the system to its desired level of performance. President Obama has it in his lucky stars to get the certification first, and show the results later. So far he has managed well.

With just the 60 necessary votes with the Democrats, the very likely chance of opening up history books, even the most diehard proponents of reality, for once blinked before such a compelling concept. It was inconceivable at the moment to see why any human effort will be such, so as to stifle such an unbelievable concept, even granting its largely utopian contents.

The bill has come through. One would take long to comprehend the genius of the ones who planned this watershed in the history of legislature and the destiny of mankind that a concept hovered over the ceiling, even without a factual ladder. Now they are mandated to make a ladder to bring it down.

As the concept takes roots, it will change mindsets, systems, and obtain its level of maturity. That it concerns human health may just bring in that streak of caring for the 'other', which today's civilization is missing out.

And that this should happen at the time of a bloody war! I think Americans are the only people so endowed that they may dance with the demons and sleep with the angels! Finally they have a way to influence mankind favourably!

Getting used to a new world order

When end of year coincides with end of decade, the number of theme-questions for a columnist multiplies by 10. Most are as boring as an honest obituary. But one did hear an unusual question: Have you changed your mind about anything in the last 10 years?

I celebrated the fall of the Berlin Wall, and the consequent downward slither of the Soviet Union, in the 1990s for two non-sustainable reasons: Principle and self-interest. In retrospect, the second is more comprehensible than the first. As a journalist one had a vested interest in free expression, and the Soviet regime was its boring antithesis. But that is so last century. There is today a vacuum where once lay the brooding, looming Soviet shadow, a force which kept its own citizens under a form of house arrest and yet, inspired enough fear in Anglo-American hawks to restrain their imperial tendencies. Would the Bush-Blair partnership have invaded Iraq in 2003 with such impunity if Uncle Stalin, or even Cousin Brezhnev, had been living in the Kremlin?

My faith in principle was foolish. Principle is an impotent yardstick if it is used to measure Saddam Hussein but not Tony Blair. Few emperors have been as airily indifferent to their own deceptions as Blair has been on Iraq. The politician who sent Britain to war against the will of his own party, told British television some days ago that he would have invented another excuse if he had been caught out on the weapons-of-mass-destruction subterfuge. Blair now admits what we knew all along — that the Iraq war was never about its stated cause.

Coincidentally, President Obama chose to dwell on the complexities of a just war in his Nobel Peace prize speech, delivered around the time Blair was shrugging off any pretence to morality. If the Anglo-American occupation of Iraq was based on a lie, were those who resisted American troops fighting a just or an unjust war? How many more nations would Bush-Blair have sought to conquer had there been no resistance in Iraq?

Obama waded into uncharted territory when he stated a proposition with the confidence of conviction: That a holy war could not be a just war. He was, of course, taking a sideswipe at jihad, understandable in the context of his need to be closer to American opinion than Muslim. The moral code of most eastern faiths is deeply ingrained into popular belief, for we remain believers. Obama will probably be surprised to learn that the iconic holy warrior in the Holy Quran is David, king of the Jewish people.

The balance of power between the principal victors of the Second World War, the alliances led by the US and the Soviet Union, has given way to an imbalance in which the space for a legitimate counterweight has been handed over to shadow armies impelled by private agendas but mobilized in the name of nationalism. Patriotism gives theocratic movements strength that they might never have achieved by a more transparent declaration of intent. This was the story in Iraq; this is the shifting narrative in Afghanistan. In Iraq, most of the insurgents have been co-opted into the system, where they bide their time, waiting for local politicians to self-destruct and American forces to leave. They will shape Iraq to their will when they get the opportunity. In Afghanistan they have history and geography on their side.

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