Monthly Archives: October 2008

In cowboy movies, there often comes a moment when somebody says “I don’t like it, it’s too quiet.” Then all hell breaks loose. If I was a member of the Obama campaign, I think I would be worrying that it’s too quiet. Of course, describing the frenzy of the last week of the campaign as “quiet” might seem a bit odd. But things still look unnaturally good for the Obama campaign. Poll after poll puts him ahead, some of them by double-digit margins. It’s been weeks since McCain led in any opinion survey. I don’t like it. It’s too good to be true.

I think my sense of foreboding on behalf of Obama feeds off two memories. First – the election four years ago. I went to bed in Britain around midnight with the BBC calling the election for Kerry. I woke up just before 6 am and turned on the radio. It was the middle of a discussion, but I could tell from the funereal tones of the BBC pundits that something had happened – Bush had won. Read more

Every time I leave my house, I am on the look-out for signs of economic collapse. Empty restaurants, closing-down sales, middle-class men in casual clothes picking up their kids from school.

This may sound ghoulish. But frankly, I think the conversations I am having these days are less disorientating than they were three weeks ago. Back then – with the financial system on the point of collapse – I had a serious discussion with my wife about whether to pull all our money out of the bank. And how exactly how would you buy Krugerrands? Now, the conversations are much more mundane and centre around relatively hum-drum topics like, will we lose our jobs?.

But not all the signs on my personal recession-watch are pointing down. People are gossiping that half the hedge funds in London are in danger of closure. But on Friday I had lunch at Automat in Mayfair in the heart of hedge-fund land. The restaurant was full. We couldn’t get a table until 1.30. Lots of the clientele were in hedge-fund uniform: well-cut suit, open-necked shirt, deep tan. I tried to eavesdrop on neighbouring tables. And I did hear one guy confide to his lunch companion – “Sometimes I think I’m going insane.” But we all feel like that sometimes; even when the economy is growing. Read more

The revelation that Jorg Haider seems to have been gay has been greeted with lots of “told you sos”, by colleagues at the FT. Apparently the rumours about Haider – a far-right Austrian politician, recently killed in a car crash – were rife in his home country.

But that isn’t what my colleagues seem to mean. I think they are just reflecting the widespread liberal prejudice that there is something about the rituals of the far-right – the uniforms, the macho culture, the youth wings, the songs around the camp fire – that is distinctly homo-erotic. Read more

For the past week or so, I’ve enjoyed depressing all my Obamamaniac friends by arguing that Obama’s lead could still be pegged back. But even I have to admit that the latest batch of polls do look very promising for him.

So if and when McCain loses, who or what will be labelled as the main culprit for his defeat? Plenty of candidates, obviously – George W. Bush, the economy, McCain’s age, the liberal media (if you happen to be a conservative.) But I’m increasingly of the opinion that it was the choice of Sarah Palin that was the real turning point.

On the day of her nomination as McCain’s running mate, I wrote that choosing her was “bold, exciting, but also stupid” since it under-cut McCain’s argument that Obama was too inexperienced for the presidency. Then I spent the next couple of weeks worrying that I had got it badly wrong – and revealed myself as yet another liberal European pundit, out-of-tune with Middle America. She certainly gave a bravura performance at the Republican convention. And there was a definite Palin bounce in the polls. Read more

Thank you to Nicolas Sarkozy for providing such a dramatic and timely re-enforcement of my Tuesday column (see below). No sooner had I subtly insinuated that he was going crazy, then he took to the stage at the European Parliament and gave a speech calling for the creation of a European sovereign wealth fund. Its mission – it seems – would be to buy up strategic chunks of European industry.

The global financial crisis seems to have liberated Sarkozy to give public voice to the kind of stuff that French politicians normally save for late-night drinking sessions - capitalism needs taming, the Americans are crazy, we can’t have the Asians buying up our businesses, why can’t the state subsidise more big industrial projects…etc, etc. It’s all coming out. Read more

“Europe wants the summit before the end of the year. Europe wants it. Europe demands it. Europe will get it.” So said Nicolas Sarkozy – president of France, and (until January) of the European Union – before jetting off to Washington over the weekend. There he persuaded President George W. Bush to agree to an international summit dedicated, says Mr Sarkozy, to nothing less than “re-founding the capitalist system”. Read more

It’s funny – only this morning I was saying to someone that one of the good things about doing a blog is that it “toughens you up”. I used to worry about personal abuse. But my blog generates so many abusive e-mails and responses that I now barely register it.

However, I must admit that even I have been slightly shaken by the various calls for resignation, lamentations about falling FT standards etc etc, provoked by my Oprah post. Read more

As the US presidential election nears, so the game of “pick the next administration” will grow in popularity. I have been indulging in a little speculation of my own, elsewhere.

In London, the local interest centres around the question of who will be the next US ambassador to Britain. If Obama wins, the guessing-game centres around Caroline Kennedy – a prominent Obama supporter, who spoke at the Democratic convention in Denver. This would be an interesting appointment, given that the last Kennedy to serve as US ambassador to Britain – Joe Kennedy – did not exactly cover himself in glory. He was forced to resign in 1940 after injudiciously suggesting that “democracy is finished in England”. Read more

I thought even the candidates looked a little bored tonight. This was their third match-up – and it was as inconclusive as the last two; and slightly duller. In fact, the boredom of hearing the candidates trudge through their positions on education, health etc etc, was only matched by the drama of what is going on in the outside world. As the candidates looked sincerely at the camera – or grinned fixedly at each other – my eyes kept drifting to the news-ticker at the bottom of the screen, showing that the Nikkei had just fallen by more than 10%. Anybody expecting to hear anything useful on that subject tonight will have been disappointed.

I can now predict what the pundits will say about this debate – “McCain needed to land a knock-out blow, but he didn’t. Overall it was a draw – which was better for Obama. Obama looked calmer and more presidential.”

I don’t hugely disagree with any of that. But, personally, I thought this was McCain’s best performance of the three. The constant invocation of “Joe the plumber” was admittedly cringeworthy. And Obama swatted aside the stuff about his association with Bill Ayers with almost embarrassing ease.

On the other hand, I thought McCain landed some genuine hits on policy. In particular, he made Obama sound shifty on free trade. And I think he was also right on the substance. If the Great Depression taught us anything, it must be that going protectionist in the middle of a slump would be a huge mistake. Obama’s policies do sound protectionist. Unfortunately for McCain, the American people are probably also fairly protectionist at the moment. So I doubt he’s going to win many votes on that one.

Although, the debate overall, was on the dull side, it did give me two laughs – and one piece of valuable information. Read more

Why do countries suddenly start producing great novelists? When I was in Russia recently a friend complained to me that the transition to capitalism had killed Russian literature – under communism they had had Solzhenitsyn, Pasternak, Akhmatova and Bulgakov. But modern Russians, my friend lamented, seem to be too busy consuming to read or produce great literature.

In India, however, an economic boom has gone hand in hand with a literary boom. Once again a novel by an Indian-born writer has carried off Britain’s leading prize for fiction. Last night Aravind Adiga won the Booker Prize with his first novel – “The White Tiger”. He follows in the footsteps of Salman Rushdie (1981), Arundhati Roy (1997) and Kiran Desai (2006). (And lots of people think that Vikram Seth should also have won with “A Suitable Boy” in 1993.) In the 1970s, a couple of novels about India – written by British authors (Paul Scott and Ruth Prawher Jhabvala) – won the Booker. But now Indian authors are regularly winning the prize in their own right. Read more

If Monday’s market rally really does signal a turning point in the global financial crisis, the world will hail an improbable saviour. Step forward Gordon Brown, Britain’s gloomy prime minister. Read more

It has now become a commonplace in the New York Times and the Washington Post that John McCain is fighting a dirty campaign. And it’s true that McCain has certainly run a lot of negative ads.

But, in one crucial respect, I think he has been very restrained. He has not gone after Obama over his long association with the Reverend “goddam America” Jeremiah Wright. Even the “pitbull in lipstick”, Sarah Palin, has banged on about the much less significant figure of Bill Ayers – while barely touching the Wright stuff. Read more

On my way into work this afternoon, I received a chilling e-mail from Clive Crook. It informed that he had blogged in response to my column on conservatism (see below, October 7th). Nervously I called up Clive’s blog on my BlackBerry, but could only read the ominous first line: “It’s rarely a good idea to pick fights with one’s friends – especially the clever ones – but I’ll take issue with Gideon Rachman’s column, “Conservatism overshoots its limit.”

My mood was further darkened by receiving another e-mail from 430Berea – otherwise, known as my mother. She cheerily informed me that “Clive Crook has done a very effective hatchet job on you.” This must count as her most supportive comment, since she remarked – “Of course, Martin Wolf is in a completely different intellectual league from you, darling.” Have I ever denied it? Still, there are some things better left unsaid – even in the closest families.

So, when I got into the office at 6pm, I called up Clive’s blog with a feeling of dread and began to read. Read more

I think that was a draw.

But watching these Obama-McCain debates, I keep find myself having to make two judgements. First, what do I personally think of what the candidates are saying? And second, what do I think the voters might think?

 On the substance, I think the only new thing that we learned was McCain’s proposal that the US government step in and buy all bad home loans and renegotiate them on more favourable conditions. This is such a large proposal with such mind-boggling implications that I find it difficult to get my head around it, at this early hour of the morning. But a couple of questions strike me, initially. First, how is this compatible with his proposal to freeze government spending? Second, what if the value of somebody’s house has fallen – which would be true for almost all homeowners in the US – but their mortgage is not ruinous enough to qualify for this government programme? Wouldn’t somebody like that be fairly irritated to see the government riding to the rescue of neighbours – who had made particularly reckless financial decisions?

Still, at this juncture, the key question is not whether McCain’s proposal makes sense – but whether it appeals to voters? Read more

The market for ideas – like the market for shares – always overshoots. Ideas become fashionable and get pushed to their logical conclusion and beyond, as their backers succumb to “irrational exuberance”. Then comes the crash. Read more

So far, the European Union’s response to the world financial rule crisis has followed my first rule of EU politics. In a crisis, European unity quickly shatters. It happened over Iraq; it happened over the Balkans – and now it’s happening over the banks.

The Irish were the first to jump the gun, with their blanket guarantee for national banks. But the German reaction was more surprising. Normally, the Germans are the first to lecture others about the need to put Europe first. Yet here was the Merkel government – apparently making bold unilateral guarantees to German savers - just hours after a European summit had broken up. The fact that the moves were subsequently qualified (or withdrawn?) only accentuates the impression of panic.

There are lots of reasons why EU countries start behaving like this when the going gets tough. First, in a crisis people tend to get selfish. It is easy to be high-minded, when nothing very serious is at stake. Second, EU countries often have very different instinctive reactions, whether it is to the US or to international finance – and, in a crisis, people tend to fall back on gut instincts. But the whole episode poses big long-term questions, which I would like to canvass opinion on – since I may write my column about this next week. Read more

I have an idea for anybody despairing of the future of America, in these troubled times: skip the presidential debates and just watch the Saturday Night Live version of the Palin-Biden debate. It is absolutely inspired. Any country capable of producing satire of this quality is in good shape.

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I was astonished to see Peter Mandelson appointed to the cabinet by Gordon Brown this morning. Mandelson’s views on Brown are, by his own account, unprintable. When I interviewed him in Brussels about 18 months ago – just before Brown became prime minister, this is what Mandy had to say:

“Given the schism that was created between us in 1994 when Blair became leader, if I said something nice about Gordon Brown, you wouldn’t believe it. And if I said something nasty, you would just think it was a grudge. So it’s better just to say nothing.”

So what might have drawn the two men back together again? Desperation, frankly. Mandelson is desperate to get out of Brussels, which he finds boring and depressing. And given the failure of the Doha round, his job as EU trade commissioner is increasingly pointless. Read more

Well, I have just finished watching the vice-presidential debate – and I must admit I feel a bit cheated. I didn’t tune in because I was hoping for enlightenment. I wanted car-crash television: gaffes galore, the implosion of Sarah Palin, something weird from Joe Biden. But  judged by those standards  the debate was a huge disappointment. Palin was, of course, profoundly unimpressive. But she didn’t mess up – she even managed to say “Ahmadinejad”, without stumbling or hesitating. And Biden also avoided any of his trademark gaffes.

The fact that both candidates will be judged to have done OK is – I think – a sorry commentary on how low expectations have sunk. Because by any reasonable standard, it was a pretty sorry performance. Neither candidate even came close to answering the first question, on whether the House of Representatives had been right to reject the bail-out bill. At that point, I longed for the moderator to jump right in and do a Jeremy Paxman – and insist, preferably with a sneer, that they actually answer the question. But no such luck.

So what did we learn? Well, it turns out that both candidates hate Wall Street and Iran; and love Israel and the American middle-class. Read more

I have never taken the issue of the convertibility of Chinese Renminbi particularly personally. That is until I turned up at Beijing Airport on Monday and was told that I couldn’t convert my spare Chinese currency back into sterling, without proof of where and when I had bought it. Come on chaps, I thought, you’ve got almost $2 trillion dollars in foreign reserves – surely you can risk giving me £50?

Of course, one reason the Chinese have this vast pot of foreign reserves is precisely because they refuse to float their currency – and that has made them huge buyers of US dollar assets. Now – as America prepares to issue lots of new debt to fund the Wall Street bail-out – the Chinese are beginning to ask themselves whether holding all these US dollar assets is such a good idea? Read more