Tuesday, March 24, 2009

A Little Of The Old In And Out

(image via btinternet)

In: The Social Contract. Last week the takeaway headline was of "Populist Rage." But this week, everywhere among the intelligentsia, talk arises of how the global economic situation is affecting the very chords binding society together. After the red-hot rage comes cool, blue melancholy introspection. Such is the status of The West at present.

On Russia, in Foreign Policy, Ethan Burger and Mary Holland write, "So long as Russia's oil-fueled prosperity soared, people accepted Putin's implicit bargain: government corruption and constricted civil rights in exchange for rising living standards. But today, with Russia's economy in shambles, this social contract is fraying." And in the Financial Times, Martin Wolfe, a sober thinker, posits about the populist rage that has pushed Congress to enact, "penal retrospective taxation of bonuses not just for the sinking insurance giant, AIG, but for all recipients of government money.." Wolfe concludes, gloomily, "it is clear why this is happening: the crisis has broken the American social contract: people were free to succeed and to fail, unassisted."

Out: President Obama On "60 Minutes." Although the President scored the weekly newsmagazine their best ratings thus far of the year, the conventional wisdom is that his levity -- the laughter, more specifically -- with Steve Kroft gave the perception (along with his smaller gaffes last week) that he doesn't fully feel the weight of the effects of the economy in Middle America, in the rust belt, on Main Street.

Was POTUS punch drunk? Clearly, the Commander-in-Chief was not. And, we cannot fail to note, POTUS delivered what can only be properly construed as a philosophical ass-whipping of former Vice President Dick Cheney (In which President Bush remained conspicuously silent).

But in the weekend after a week of "populist rage," our present President should have affected a graver mein. It is our belief that in the future, years ahead, when Steve Kroft and President Obama look backwards, examining their complex relationship, both will agree that he had not quite gotten used to the office of the President. Both will have a laugh. And they will contrast the performance -- his first on "60 Minutes as President -- with the many more commanding performances that followed afterwards.

(image via rfi.fr)

In: The Lessons Of Japan. Those who do not learn from History, observed Santayana famously, are doomed to repeat it. Ironically: Does anyone even remember the aristocratic philosopher George Santayana? It is, alas, human nature to forget.

Both Joe Nocera and Nobel Laureate Paul Krugman were on The Charlie Rose Show last night warning that the United States is following the same course as Japan did in dealing with their economic crisis in the 90s. "There's a lack of honesty about what (the toxic assets) are worth," said Nocera. "It's the same (problem) as in Japan."

"Maybe we ought to call him Geithner-san," Krugman quipped. "When we look at the size and the scope of the Japanese Crisis and we are doing exactly the same thing."

Out: Recapitalizing Banks. Martin Wolf of FT is the most consistent critic of the Paulson, now Geithner approaches to the economic crisis. Today he writes of Geithner's plan:

"I think of this as the 'vulture fund relief scheme'. But will it work? That depends on what one means by 'work'. This is not a true market mechanism, because the government is subsidising the risk-bearing. Prices may not prove low enough to entice buyers or high enough to satisfy sellers. Yet the scheme may improve the dire state of banks’ trading books. This cannot be a bad thing, can it? Well, yes, it can, if it gets in the way of more fundamental solutions, because almost nobody – certainly not the Treasury – thinks this scheme will end the chronic under-capitalisation of US finance. Indeed, it might make clearer how much further the assets held on longer-term banking books need to be written down.

"Why might this scheme get in the way of the necessary recapitalisation? There are two reasons: first, Congress may decide this scheme makes recapitalisation less important; second and more important, this scheme is likely to make recapitalisation by government even more unpopular.

"If this scheme works, a number of the fund managers are going to make vast returns. I fear this is going to convince ordinary Americans that their government is a racket run for the benefit of Wall Str*eet. Now imagine what happens if, after 'stress tests' of the country’s biggest banks are completed, the government concludes – surprise, surprise! – that it needs to provide more capital. How will it persuade Congress to pay up?

"The danger is that this scheme will, at best, achieve something not particularly important – making past loans more liquid – at the cost of making harder something that is essential – recapitalising banks."

The full column here.

(image via onlinevideowatch)

In: The Direct TV-NFL Deal. In a deal that defies the downward pull of the economy, by 2012, NFL fans who cannot get Direct TV -- which just struck a billion dollar a year deal over the next few years -- will be able to stream it online. This, of course, increases the viewership at a period of time -- economically stressful -- when the viewership will probably not be in jeopardy (even "sports entertainment" does well at least on television in a recession). From Paidcontent:

"For football fans for whom the ability to watch every NFL game on TV on Sundays isn't enough, help is on the way. As part of a new four-year, $4 billion deal struck between DirecTV (NYSE: DTV) and the NFL last night, they will now also have the option of getting any game streamed to their laptops.

"It represents the first time the NFL has licensed the online rights to its games. Details about what the service?which the DirecTV release said will begin 'no later than 2012'? will look like or where it will be housed online (on the NFL site or a separate URL) were not disclosed. But if the service resembles the free games streamed on NFL.com last season, it's good news for football fanatics and perhaps DirecTV, who must turn their billion-dollar-a-year investment into paying subscribers. The online NFL service, which streamed Sunday and Thursday games in conjunction with broadcasts on NBC, featured HD full-screen players and the ability to manually change the camera angle at any time during the game."

Sports, as a distraction, on television, will probably be one of the few industries to weather the storm of the economic crisis just fine (so long as the athletes don't go overboard in their conspicuous consumption).

Out: Chris Martin. Gwynnie's annoying, hyperactive hubby, though featured on "60 Minutes," cannot get Michael Jackson concert tickets in his native UK. We're not quite sure what that says about the social desirability of Martin, Jacko, London or, quite frankly, all of the above. From the 3AMGirls:

"Despite playing 50 London gigs, tickets for Michael Jackson are like goldust... just ask Chris Martin.

"The Coldplay star, who is a massive Wacko fan, moaned: 'I was looking at it on the internet and thought, 'I'd better buy some for myself' and I couldn't. They were totally sold out.'

And here we thought no social door in the world was locked to Gwyneth Paltrow and her privileged kin.

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