Syzygeist

Row Row Row Your Boat, Gently...

With uncertainty and complexity abounding, too much information flooding over most of us and the Global Happiness Index (GHI) challenged by much in modern life, it's worth noting that the best advice is often wrapped in a children's story or rhyme, which only endures to be repeated through generations and across cultures because it is quintessentially true. 

Few can beat the little song we used to sing in rounds while on summer holiday before anyone held a hand-held anything to amuse them during those seemingly endless hours in the car. (And kids singing verses together don't squabble.) 

This one has its origins in English nursery rhyme and American minstrel songs and supposedly first appeared in print in the U.S. in 1852.

Row row row 

your boat

gently

down the stream

merrily merrily merrily merrily

life is

but a dream. 

Why should this have become such a repeated mantra for children? Full of advice for getting through life, it has inspired many to reflect on its deeper meanings. As a sailor who has often rowed back and forth between shore and a sailboat, I have had plenty of time to think about it - and enthusiastically sung it many times with my own children when they were small.

Row row row 

Rowing requires both hands, applied equally for the most part (and use your back and legs if you want to bring real strength to the action) and a sense of direction. 

Balance! Don't pull too hard to one side unless you want to turn or you will soon be off course. Steady and rhythmical is almost always better than too much effort expended in bursts. Repetition and self control matter. Practice makes perfect.

Your boat 

Not someone else's. You're in it so you need to take care of it. It's the only one you've got. And it is uniquely yours - in what it's made of and contains and where it's going (or could go).You are on your own in most respects. So care for your boat like no other.

Gently 

Of all the adverbs in the language to appear here, why this one? Think about the way you conduct yourself. How does it feel, and feel to others? Considerate, tender, gradual, refined, of good family - and the word hints etymologically "of the same clan." So row with a sense of belonging among others - congenially.

Down the stream 

Yes, go with the flow, not fighting the current (although this may be necessary sometimes) but using the nature and direction of the stream to help you along. A stream is always moving and never exactly the same in any other place or at any other time.  So keep paying attention to the stream wherever you find yourself in it.

Merrily merrily merrily merrily 

"In a joyous manner" is one definition offered, but also consider that this adverb (any word that describes action) is repeated four times. No other word is given as much space or attention. So attitude matters a lot! And this attitude should live in the world of delight, pleasure, humor and joy.

Life  

Ah, life itself - everything around you that you see, feel, touch, smell, know, imagine, desire, fear, revile or revere...  

is but a dream. 

Images, ideas and emotions that seem to come upon us or that we may conceive spontaneously are all in us. This complex of perceptions are "real" but also "imagined" in the sense that they are the unique images we take from - or bring to - the world. That world is in us too. (Some might say it had its origins in us from birth, or even before that!) 

Is life not as we imagine it to be?

Row row row your boat, gently, down the stream… 

Merrily merrily merrily merrily - life is but a dream... 

Amen.

Hillary's Larger Right To Be Seen

Hillary Clinton disappeared from one of the most historic scenes in recent American history and most people would not know it happened. (Perhaps more sadly, many might not care.) Please consider:

Editors of the Hasidic weekly Der Tzitung photoshopped the US Secretary of State and another woman out of the scene in which Mrs. Clinton, seated near President Obama, was watching the progress of the assassination of Osama Bin Laden.

This was quickly noticed and reported - the vanishment of the U.S. Secretary of State, even virtually, being something to note.  Der Tzitung's editors issued an apology and explanation. They meant no disrespect to Mrs. Clinton or the President, they said, but images of women in their publication are expressly forbidden - to "protect their modesty."

Well now, White House policy expressly forbids the alteration of any official news photo, so the "modesty defense" would appear to fall short here. The editors did not need to run the photo at all - that would have defended Mrs. Clinton's modesty, if indeed it was threatened. 

But to alter the photo and thereby to change the face of history is not fairly an issue of modesty. It is a not-so-subtle repression of women, in another garb. It also has that Orwellian 1984 feel of Newspeak, in which the photos of the news really aren't.

We can all look back to when women were not permitted to vote. Or to garner a fair share of property or wealth gained during marriage. Or to serve in combat military units. Laws have been passed, legal actions brought. Still women fight for equal rights and equal pay for equal work. Arguably they are further ahead in the United States than in much of the rest of the world.

One might argue that this is a tempest in a teapot and we have better things to do than to worry about the photographic exclusion of women - even as important as Hillary Clinton - in sectarian weeklies that few see and perhaps more could care less about. 

I would contend, however, that this is gender discrimination dressed up as something else. Keeping images of women in the news out of the news implies that women don't make or matter to the news. And that is simply wrong. And I would add that if you address the little things, the big things may begin to take care of themselves. (This was the apparent lesson of subway cleanup efforts in New York City, well described in Malcolm Gladwell's "The Tipping Point," wherein the battle against graffiti and turnstile-jumping began a trend toward a much cleaner and safer underground.)

Maybe the White House feels it has enough on its hands these days not to react to an item like this. Maybe Hillary doesn't mind, and maybe the orthodox Jewish vote matters more. I would hope the White House enforcement arm for accuracy in media (do they have one?) would react to this in some official way, to say hey, you;re not allowed to do that, and we would like a retraction in the form of the accurate photograph published in the same place of prominence as the doctored one.

Oh, and by the way - there are better ways to respect and protect women's modesty than by distorting their accurate role in history.

In Dead Bin Laden's Wake

I do not rejoice in anyone's death but I am glad Bin Laden has met his maker and grateful to those servicemen and women who put themselves in harm's way to carry out our country's military plans. In the case of Al Qaida, a non-state terrorist organization willing to target mostly civilians, a war played outside the rules has provoked responses that have been outside the rules as well. 

Victory may be sweet, but we need to be vigilant that provocation does not cause us to abandon the American principles of law and individual rights that we hold dear. That said, I find my mind filled with questions:

If we went into Afghanistan to pursue Osama and deal Al Qaida a death-blow, is our reason for being there now satisfied (having satisfied it in Pakistan)? That debate has been going on for nearly the last decade, and the NY Times reports that it has surfaced again at the highest levels.

How could the Pakistani authorities not have known of Bin Laden's compound, and its inhabitants? (This question was raised Monday on National Public Radio's Fresh Air interview with Lawrence Wright, author of Pulitzer Prize-winning book, The Looming Tower: Al-Qaeda and the Road of 9/11)  Pakistan has some explaining to do, as do US officials who manage the relationship and provide military and financial aid.

Is it true of a networked terrorist organization that if we cut off the head, the body will die? History has its share of revolutionary and proto-revolutionary movements that have been effectively crushed by government force. Surveillance, intimidation, imprisonment and the execution of key leaders tend to be effective, but these have tended to be within national boundaries. Both the former Soviet Union and China provide illustrations here, but they are not alone. (Former FBI Director J. Edgar Hoover called the US Black Panther Party of the 1960s-70s "the greatest threat" to internal security and used all the FBI's resources to harass and disrupt them, including the alleged use of assassination.) Chris Hedges, who covered Al Qaida for the NY Times, would suggest this is not one of those cases.

What potentially helpful terrorist-fighting information was found on computer hard drives confiscated from Bin Laden's compound, (and is there any chance it might make it onto Wikileaks)?

What role did Google Earth play in identifying the compound for what it was - a refuge not just for someone important and clandestine but for the Most Wanted Man of The Century? Global surveillance of this kind would seem to be a game-changer all its own. Finding the compound on Google Earth certainly happened quickly just after the news broke.

Does Bin Laden's death make terrorist acts against the US more likely? (If we believed that, would it make us wish Obama had acted otherwise in ordering the strike?)  

Some reports have suggested a connection between information gleaned at Guantanamo and identifying the compound as Bin Laden's. Are we to believe that torture (water-boarding or otherwise) played a role here? If we wanted a justification for torture, maybe some would consider this enough. (I favor observing the Geneva Convention.)

Some of these questions may be answered soon enough. I would like to say that I am confident of our government's account of events in general, but I am not. (Iraq and WMD come to mind). Events surrounding Bin Laden's death, however, will be subjected to as much scrutiny as any events in recent history, if not in all recorded history. The same technology and transparency that enables pervasive government surveillance, also enables relentless citizen inquiry, and I think the important truths here will become known if they are not already. 

As satisfying as Bin Laden's death may be in some respects, I am still hungry for more answers.

Students, Conscience, and US Policy

In perusing old notes for a new book, I came upon observations made in an interview with Robert Oxnam, former President of the Asia Society. Oxnam was describing what to him was the need for a true ideology for China, one that could reach beyond "to be rich is glorious" to give the emerging world power a moral and political identity to be proud of, and one that might hold it together more than break it apart.
The real message of Tianenmen Square, Oxnam said, was that students demonstrating for openness, tolerance, and democracy were exercising their right to be students, and to be the conscience of the nation. (My emphasis added).
The phrase stopped me. Where, I wondered, are US students today acting as "the conscience of the nation?" Or did this fade after Vietnam, or go underground after the draft expired?
President Obama, without conferring with Congress, has just put the nation into a third war front in Libya. This is part of a multi-national effort apparently entered into hastily, and without a broad US Mideast military policy to address fomented rebellions there.  This Presidential act, one could argue, overreaches the power of the presidency despite alleged authority to fight terrorism on any front for almost any reason. Obama went on TV to the nation March 28 to explain his rationale for US involvement.
I personally support efforts to block Qaddafi's intent to kill his own citizens (whom he may define as 'terrorists,' if it suits him), in the same way I favor intervening if the man upstairs is beating his wife. Boundaries are not the issue, and time is of the essence. I favor intervention when morally and practically required - but not without Congressional due process, and that does not have to take a lot of time. (In the case of the man upstairs, there is no due process and he does not deserve a warning.)
On another front, we learn this week that Obama no longer believes that suspected terrorists should get the Miranda warning afforded them constitutionally, depending on the circumstances and the perceptions of the FBI agent at the time.
An FBI internal memo revealed this week advises its agents:

1. If applicable, agents should ask any and all questions that are reasonably prompted by an immediate concern for the safety of the public or the arresting agents without advising the arrestee of his Miranda rights.
2. After all applicable public safety questions have been exhausted, agents should advise the arrestee of his Miranda rights and seek a waiver of those rights before any further interrogation occurs, absent exceptional circumstances described below.
3. There may be exceptional cases in which, although all relevant public safety questions have been asked, agents nonetheless conclude that continued unwarned interrogation is necessary to collect valuable and timely intelligence not related to any immediate threat, and that the government's interest in obtaining this intelligence outweighs the disadvantages of proceeding with unwarned interrogation.

I find it hard to believe that someone who has conspired to commit acts of terrorism will talk if he has not been apprised of his Miranda rights but will clam up once informed that he can be represented by an attorney under US law. Really?
If the students I have in mind were to act conscientiously, they would object to the abuse of presidential power, or even the appearance of it, whether or not it is taking the US into war. They would also object to the selective application of Constitutional rights for "terrorists" because it would occur to them that anyone can be considered a terrorist, and treated accordingly. Surely the farmers in the American Revolution were terrorists in the eyes of the British, who probably had no trouble burning the soles of their feet to coax their plans out of them. That was long before the Geneva Convention or the evolution of US Constitutional law that made us a model for the world.
I would like to see our students defending that.

Stop These Wars

It is gratifying to wing opinionated and potentially provocative words into the blogosphere and have words come back, whether affirming or not. The words (and website) below reverberated from my previous question about whether people know the rationale for our waging war in Afghanistan (and a corollary, Iraq), and whether they support it. 

This inquiry caused me to discover and be shocked by the estimated number of nearly ONE MILLION DEAD in combined military and civilian casualties between the two conflicts in the last near decade. Most are civilian. Many of those had nothing to do with terrorism and will not have been drawn closer to the US as a result of the deaths of loved ones, I would suspect.

From a New York City mother of two teenage girls and a younger son:

See www.stopthesewars.org. Check it out.

This will tell you, among other things, that a veterans' protest is scheduled in Washington, DC for March 19, next Saturday, on the anniversary of the Iraq invasion. The argument and its passion may surprise you. You may even be moved to think/feel differently, and possibly to act, on the strength of it.  Also, the demonstrations the following day want to bring awareness to the situation of Bradley Manning, the US Army intelligence analyst currently imprisoned in Quantico and awaiting court marshal, whose allegedly inhumane treatment in custody has been brought to Obama's attention.  

From a former Navy pilot, who came of military age in the Vietnam era:

How about immoral and irrational? The war in Iraq is immoral and the war in Afghanistan is irrational. Iraq sustained the predilection of the US to engage in wars of aggression. Can anyone reasonably doubt that either Vietnam or Iraq was such a war? Both were a departure from our nation's traditional values.
Afghanistan was presumably directed to thwarting Al Quaeda, which in the interim has sprung up like mercury under the thumb in places like Somalia. Nonetheless, we continue to pretend that we are fighting terrorism in Afghanistan. Your "energy lawyer" is spot on, to wit: this is merely a political action initiated by Bush and perpetuated by Obama for political purposes. Can any action possibly be more cynical?
On a related note, the volunteer force disassociates the rest of America, other than the friends and families of those who serve so honorably, from those political conflicts. The detachment permits us to remain disengaged from the conflict. It doesn't touch us so we do not object.
Universal service requires everyone to give something back to the country, and requires each individual in the country (or someone with whom they are related or acquainted) to be "at risk" of serving in each conflict. In addition, it gives those with a VALID moral objection to conflict the mechanism to channel their obligation into an area devoid of the prospect of armed conflict.

As it happens I agree with this reader and feel vindicated that someone of military commitment and bearing sees it this way.

From an author of historical books and former national political reporter:

I of course disagree with your thesis. I don't have much to contribute to the canon on Vietnam - wretched costly mistake steeped in the stupidity of the best and brightest ... but I still think there was a case for invading Iraq and unseating Saddam. The fatal blunders there were:

1. You simply cannot lie about the casus belli for war in a democracy; hanging onto the convenient "Tonkin Gulf" justification of weapons of mass destruction, when at best we had no proof of them and at worst knew they did not exist, laid a flawed foundation for our being there that could not be cured;

2. We did not sustain the wobbly security forces there or replace them with anything else, and did not send enough men - our (Phillips Academy graduate) Andover man Paul "Jerry" Bremer deserves the blame for this, with others; and,

3. We did not respond even remotely adequately to Abu Ghraib. I remember being stuck in a hotel room at Gatwick during Senate hearings when Evan Bayh asked Rumsfeld if he should have resigned over Abu Ghraib, and after a long pause Rumsfeld said, "Yes." He says so again in his new book. Then why, oh why, didn't he? 

As to Afghanistan, I have only a layman's sense that no one can "win" a war there. But it is very hard for me to think that President Obama has some ulterior motive such as re-election driving his support for the surge there - and I do have some qualifications as an expert on presidential elections, so I will say with confidence that I do not see how he picks up a single vote by supporting the surge, but I think he loses some potential support in the primaries for doing so.

I agree that drafting everyone was a vastly fairer and more sensible way of prosecuting wars than the mercenary military we have today. But the reason we do not have universal two-year public service is not the right...it is organized labor.

I cannot anticipate the expressed view of "organized labor" in the universal national service debate. I doubt that "labor" would think and act on this as a monolith. It makes more sense to me that labor in general would favor wars of various kinds, because they are stimulative of basic industries that we have not yet farmed out to other countries. Now that might be considered cynical.

Please do write. 

Or call. 

Someone. 

This is not a neutral topic worthy of indifference or inaction.

Afghanistan: Engaged? Enraged?

Do you know why the US has troops fighting in Afghanistan? Do you support it?

At a recent weekend ski reunion in Nevada I asked this of some high school era classmates, (Phillips Academy, 1966), a relatively well informed and learned professional group, mixing law, public policy and private enterprise in almost equal measure.
I have found that many people, however well educated and apparently informed, do not know the official rationale for our being in Afghanistan. But polls suggest that opposition to the war hit 63% in December, 2010, as US (and other) soldiers continue to sacrifice themselves there and civilian casualties mount. With at least 919,967 people killed in Afghanistan and Iraq since the U.S. and coalition attacks, based on lowest credible estimates, the war should rightfully loom as a major campaign issue in 2012.

About 10 of us had gathered in our former classmate's house and soon became engaged, if not enraged, by the topic, which recalled for us another conflict. Some of us had brothers who fought in Vietnam. Some of us did not have to serve because of the lottery then, or served because of it. 

Most of us had come to see Vietnam as unjustified, as well as unsuccessful. (One of our classmates had written "Loon," a recent first-person account of a high-loss battle in Vietnam and its grim legacy.)

Some of us now fervently believe the US should bring back the draft (perhaps as universal 2-year national service) so that our wars are not fought only by those who volunteer. One advocated the idea on the grounds that if everyone in the country had equal skin in the war game, the country might be more fairly and fully engaged in determining what wars we fight. 

Everyone seemed to agree that this would be good for the country. No one in the room seemed to believe that current leadership would be willing to broach the topic of the draft, or even of withdrawing, before the elections.

One of my classmates served in Congress and now, as an energy attorney, frequents the corridors of Washington and travels the world. He is the member of our group who predictably will have read the most relevant recent book on a topic and have the most informed and thoughtful view.
He cited the recent "Our Vietnam," by AJ Langguth, and reported some disturbing history compiled from original sources. According to Langguth, Kennedy never believed that the war against the North Vietnamese could be won. And he did not believe the "domino theory" that the fall of Vietnam would mean the loss of Asia to communism. He believed he simply could not afford politically to get the US out before the 1964 election because the Republicans would roast him.
By then, Lyndon Johnson, who as Vice President had tried to convince Kennedy to exit the war as un-winnable, found himself similarly trapped by a war that had escalated beyond the point of practical or political withdrawal. (Kissinger would later be instrumental in negotiating a pause in which the US finally could come out.)
This renewed sense of Vietnam history, where domestic politics interfered with common sense, provoked a number of reactions to the current situation. 

One former classmate active on Capitol Hill characterized many Democrats as believing "Afghanistan is an outrage." He wondered aloud if Obama, who promised withdrawal by July 2011, can survive in 2012.
"When you read how the Mideast revolutions are happening, how accelerated everything is, I find it hard to believe that Obama is going to skate through," he said.
As a few of us wondered aloud at the apparent lack of anti-war activism compared to Vietnam's protests, our energy lawyer quoted a recent conversation with author James Fallows on the topic, who said:

"You never know on a given day whether you should be living a normal life or doing something about the most important issue of our time."
Perhaps our war in Afghanistan is not "the most important issue of our time," but it must rank pretty high. How many have US soldiers have died there? The quoted statistics are:  4,683 in Iraq and Afghanistan combined, since "Operation Enduring Freedom" began on Oct. 7, 2001, and "Operation Iraqi Freedom" began on March 20, 2003. Of the total US deaths, 3,708 were reportedly due to hostile fire, and the remainder due to non-hostile actions (such as accident, suicide, or illness).
Perhaps the military deaths are the most important thing, though they do not embrace the thousands severely wounded or mentally affected for life. Officially, 30,490 U.S. service members have been wounded due to combat actions in Iraq and 2,309 in Afghanistan (32,799 total). (Source: Rod Powers, About.com) The civilian death statistics already mentioned are highly disturbing.
If you want the official rationale, you will find it here:
US President Barack Obama, declared on Dec. 1, 2009: “I am convinced that our security is at stake in Afghanistan and Pakistan. This is the epicenter of the violent extremism practiced by al Qaeda. It is from here that we were attacked on 9/11....It is important to recall why America and our allies were compelled to fight a war in Afghanistan in the first place. We did not ask for this fight. On September 11, 2001, 19 men hijacked four airplanes and used them to murder nearly 3000 people.”
In his press conference on military action in Afghanistan and Pakistan, Obama called the region a base for "Al Qaeda and its extremist allies" from which they train terrorists and launch attacks, now "the most dangerous place in the world for the American people" and "an international terrorist challenge of the highest order." An additional 17,000 US troops would be committed immediately, and training of Afghanis would be increased.

Addressing Al Qaeda, Obama said flatly: "We will defeat you." 

One might question if the US is suppressing or defeating terrorism as much as it is stimulating it, as some have suggested, by causing hundreds of thousands of civilian casualties in countries with which we are not at war. And can Al Qaeda and the Taliban be defeated militarily on their home turf?
Our discussion was inconclusive, although the sense of the room was that this issue may be bigger than current debate and lack of open protest suggests.
Is Afghanistan an echo of Vietnam, misguided and un-winnable, and now a tool of US domestic politics?  

Will Obama sustain the hostilities until after the election in 2012, as much as it is supported on the right and opposed on the left? 

Does he believe he has any choice?
Do you?

Have you written your Congressman lately?

Wadsworth on China

Yesterday (Monday October 18th) I watched an old friend and very wise man, Jack Wadsworth, interviewed on Bloomberg TV on the subject of China – its currency, economy and relations with the US.
I have known Jack since he was running Asia for Morgan Stanley in the mid and late 90s. I first saw him at a party for clients and was struck by the thought that if a war started and we all had to join the Navy and Jack had command of a vessel, I would want to serve on it. (I still feel that way.) Jack has run his own venture capital firm that has started about 30 new companies in China in the last half decade. He knows whereof he speaks.
On Bloomberg he had the same air of quiet composure, concern, confidence and good humor that always seems to characterize him. He did his best to persuade his interviewer that the real issue is not whether China adjusts her currency upward as Americans and their politicians would like, but whether America recognizes a labor rate differential in the world that requires our adjustment.
The idea is pretty straightforward – if a country competitor has labor rates that are roughly one-tenth of yours, you have a problem. Their currency adjustment alone is not going to fix it. You have to address it.
I listened to Jack trying patiently to explain this in the mini-bites of information that modern television news coverage allows. I have been involved with Jack in numerous meetings to discuss this issue: how the US-China dynamic should concern all of us, because if it goes off the rails, we (the world economy) all go together.
With U.S. mid-term elections approaching, a rising political theme is that China has to do something about its currency in our favor, and then somehow things will be different, better, “fixed.” Most troubling is the ring of 1930s protectionism implied – or actively expressed – if “they” don’t do what we want.
Jack’s quiet message – though I doubt it was heard through the veil of “tell me a happy truth that makes us feel better” – was simply that China cannot solve our problem. Its currency may be 5-10% undervalued, but we have a 10-1 imbalance to consider.
I would feel encouraged if I thought the American body politic can face this music and begin to dance together, but I do not. The Obama administration, public employee unions, the unemployed, Tea Party activists etc are not likely to come together with an attitude of “America has a problem that it must fix.” Wall Street and those profiting from currency market machinations could care less, as they will win no matter who loses. (Okay, some may lose there, but not the ones who should.)
Rather, we will seek outside causes for our ills and play a blame game as further difficulties come home to roost. The Greeks protest austerity. The French strike to defend their retirement age. And the US will find its own ways to defend the status quo. I predict we will look to others to blame instead of into the mirror, failing to consider that we have seen the enemy and it isn’t “them.”
What does that mean? Our currency will keep getting weaker, unemployment will remain at these levels or worsen, stock and currency markets will continue to fluctuate, and the hole the US has been digging will deepen, the reckoning yet to come.

View the clip of Jack Wadsworth speaking about China on Bloomberg here.

Vote Obama

It occurs to me that it may be hard for me to reach anyone "undecided" in this campaign - at least among my friends, voluntary readers and business associates. This brief blog, however, is intended for them, wherever and however this may find them.
I do not personally find it a close call between Obama and McCain, for a host of reasons. And as a child (politically) of the 60s I am reminded of my feelings about JFK, and his leadership style. One candidate for me is, as JFK was, the candidate of hope, aspiration - spirit, if you will, that encourages me to believe that better, not worse, will be around the corner if we choose him. And certainly America in my lifetime has not previously had greater need for the best leadership it can get from its political process.
I will borrow a few phrases and ideas from the Economist (Nov. 1-7), which reached the same conclusion, apparently for some of the same reasons.
We follow from an administration "whose war on terror has left America less feared by its enemies and less admired by its friends." And the state of America's reputation in the world now means the new leader's challenges are  "not just a matter of handling the rise of India and China, drawing them into global efforts, such as curbs on climate change; it means reselling economic and political freedom to a world that too quickly associates American capitalism with Lehman Brothers and American justice with Guantanamo Bay."
I belief Obama has demonstrated a greater capacity for doing that than McCain, by a wide margin. I also believe, after living in the United States on both coasts, working as a journalist and in business from the Central San Joaquin Valley to Wall Street, and abroad, and after months of campaign-watching, that this is election is, as a business colleague of mine (and a native of the Middle East) observed, "America's referendum on racism."
I don't believe that if Obama were white we would hear some of the arguments raised - "elite?" "aloof?" inexperienced?" - about a man who was head of the Harvard Law Review and early on committed himself to social and economic change, eventually waging such an astonishingly effective campaign that has, as the Economist notes, "out-thought, out organized and out fought the two mightiest machines in American politics - the Clintons and the conservative right."
So for me the choice is clear, on many counts. I have reason - and every hope - to believe that Obama may win on Tuesday. But I would not want to think I had failed to raise my voice in his favor in the waning hours, if only to reach one or two people who might be persuaded that this is the right thing to do in 2008 - for America and the rest of the world.

Unofficial Poll

Okay, you decide whether the following story is an indicator of the outcome of the 2008 Presidential race:

In Providence Rhode Island on Monday I asked a room of 60 CEOs - many of them in the media and telecom business - whether they believed the outcome of this presidential election would matter. We had been talking about the nature of global and macro uncertainty. These days provoke a lot of worry about how bad things might get. So how should good corporate leaders react? After all, the Dow had been down almost 580 points before recovering a couple of hundred points higher. And this on top of an 877-point decline last week.

Show of hands? Yes. The outcome of this election matters. Unanimous.

Then I asked for another show of hands - without suggesting support for one candidate or another. 

How many in the room thought McCain/Palin would win? 

Not a single hand raised. This caused a ripple of bemused or perhaps nervous laughter.

Then someone called out, "How many are going to vote for McCain?" and the questioner himself raised his hand, looking around for support.  About a fifth of those in the room raised their hands, several of them tentatively.

Is this an official poll? No. A focus group? Well, perhaps, if you wanted to focus on CEO opinion in the media. (Do we think such a distinguished crowd would tip toward Democrats? I would think - hmm, not necessarily at that level of the enterprise.)

I realized that I was not prepared for the outcome of my impromptu poll. This unanimous result fell into the category of "the unthinkable," which had been one of the discussion topics. With so many unthinkable things happening in the world (Freddie and Fannie taken over, Bear Stearns gone, Lehman gone, WaMu gone, Merrill absorbed, AIG saved), what others might business leaders need to take into account in their planning?

Their answers included terrorism on US soil, capital shortages, and internal strife in the US economy akin to that of the 1930s, when people pulled up stakes en masse and left California, to cite one example.

But closer at hand?

A landslide victory for Obama. That's what the "poll" said.

Rome is Burning

With conflagration in markets, global credit frozen, open dysfunction in Congress, unemployment rising and fear driving most asset prices lower, I am moved to speak up (after a long silence) by the fact that Congress now wants – as part of the bill they haven’t passed - to increase FDIC insurance coverage from $100,000 to $250,000 for retail depositors, an apparent attempt to allay panic and curry favor. (My 28-year-old daughter, a WaMu customer who doubts her deposits are really safe despite the takeover by JP Morgan, said last night she intends to withdraw her funds today and open a new account at JP Chase. This may be a bullish sign for Chase in the long run, but it’s also a small piece of a larger bank run. Expect more to come.)
Congress’ move to increase insurance is understandable, reflecting their desire to “Do something now!” to make the general public feel better about the credit crisis and its potential (impending?) impact on their bank accounts.  If people wonder, “Hey, what have they done for me lately?” this might give some comfort.
But does it reflect an appropriate grip on reality and a sense of priorities? The FDIC at the end of the second quarter increased the number of problem banks on its watch list from 90 to 117. Others have predicted that over the next few years as many as 400 banks with assets of over $300 billion will fail. Against these potential losses the FDIC has only $45.2 billion in its insurance fund now against total insured deposits of $4.5 trillion.*
Making an adjustment in FDIC insurance to reflect inflation since 1980 seems to ignore the underfunding problem by multiplying it by 2.5. Is this comforting?
Everyone seems to be grappling with different pieces of the problem. Yesterday we drove to West Virginia for a meeting hosted by the Arlington Institute in which Dr. David Martin, chairman of M-CAM and a fellow at the University of Virginia, held forth in a 2-hour disquisition on the state of the markets and the near term future.  Life ain’t gonna be like it used to be, according to Dr. Martin, who foresees:

-A 30 percent decline in the value of the dollar by December.

-Moves by China to stop purchasing US debt and shift its support toward the Euro. Martin also sees China as the only economy in history that can – and he believes will -  turn inward to build its economy because it has attracted the capital and technology to do it.

In Dr. Martin’s view of the world, the US brand of consumer and finance capitalism is finished. We went too far believing in currency and consumerism and now have sold ourselves out into insurmountable debt, and transferred key technology to China that has effectively hollowed out our competitive capacities. Increasing the insurance the government says it will pay for lost deposits does not alter the underlying reality – a deficit-driven government struggling to pump liquidity into failing markets and boost confidence when the US economy itself has lost its competitive edge, and its official paper is under threat.
Are bank deposits safe – and is an insurance increase the answer? I listened this week to a former Wall Street insider rejoice in having sold his entire Morgan Stanley stock portfolio before the share price dropped below $42 (it’s was trading at $23 on September 30th), and explain why a mix of 80 percent Treasuries and the balance in JP Morgan and Bank of America stock makes sense to him as a defensive portfolio with real upside. This reflects an underlying belief  - common in the US - that our currency will continue to dominate, the world will always be willing to buy our debt, and we will always have a few banks that really are too big to fail.
This former Wall Street executive would not have been encouraged by Dr. Martin’s arguments. Martin says US Treasuries are in deep trouble – not a safe haven as widely believed – in part because China faces a stark choice – either to build its internal economy as fast as possible now to meet the needs of 170 to 230 million perpetually single males coming of age, or to continue to buy more US Treasuries to help the US economy recover (and keep our consumer society liquefied).
Martin believes the Chinese will take care of their own and leave the US economy in the lurch, which would mean, among other things, many more bank failures.
Is the answer to increase deposit insurance? Or is there a bigger picture to consider? Martin believes that Chinese moving “off the dollar” will mean trouble for Singapore, Malaysia and heighten tensions in a region rife with Muslims who have no affection for the US. To hear him telling it, increasing deposit insurance for the FDIC at a time like this amounts to fiddling while Rome burns. 

-Eric Best

_{*See Roger Cass’s most current report No More BRICS in the Wall- When the Gods of the Market Tumbled at http://bestpartners.cc/pdfs/partners/roger_cass/3Q2008.pdf}