A Bretton Woods II worthy of the name

Ahead of this weekend’s G20 summit, David and I have published a short paper entitled A Bretton Woods II worthy of the name.  Key points:

– The summit is unlikely to be able to live up to its billing.  Leaders do not yet understand the nature of the problem well enough to be able to implement viable solutions.  However, the problem is more fundamental than a simple lack of shared awareness. 

 – History suggests that leaders will only think the unthinkable on institutional reform once the challenge they face has really hit rock bottom. But history also suggests that we are wrong to think that the worst of the crisis is now past, given that many past banking crises have taken five years or more to unravel.

 – Bretton Woods 1 looked across the whole international economic waterfront in 1944, while this weekend’s summit will be much more narrowly focused.  Leaders will make a big mistake if they try and tackle finance in isolation, given the growing impact of resource scarcity, and that 2009 is supposed to see another ambitious global deal – on climate.

 – We need to recalibrate what we expect from globalization through a serious debate about subsidiarity. Where has globalization gone too far, too fast? Where do we need more integration at a global level? These were exactly the questions that preoccupied Keynes in 1933, when he weighed the relative benefits of global versus local across a range of variables.  We need a similar debate today as a precursor to serious international economic reform.

 – Leaders need to extend their horizons in (at least) five directions: onto longer time scales; beyond financial regulation into wider resource scarcity challenges; into other international processes, especially climate; towards grand bargains with emerging powers; and beyond government, to non-governmental networks.

Full version after the jump, or better yet here’s the pdf.

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Obama = Uncle Tom

From Ralph Nader – yes Ralph Nader, the consumer advocate and the man who, in 2000, running to the left of Gore, did most to get Bush elected:

To put it very simply, he is our first African American president or he will be. And we wish him well. But his choice is, basically, whether he’s going to be Uncle Sam for the people of this country, or Uncle Tom for the big corporations.

Yes really.

Watch Nader – who ran again this time and got 4 or 5 votes – destroy the last shreds of his credibility here. The Fox News presenter he’s talking to is too flabbergasted to really know what to say…

Our destiny is shared

President-elect Obama to the world:

And to all those watching tonight from beyond our shores, from parliaments and palaces to those who are huddled around radios in the forgotten corners of our world – our stories are singular, but our destiny is shared, and a new dawn of American leadership is at hand.

To those who would tear this world down – we will defeat you. To those who seek peace and security – we support you.

And to all those who have wondered if America’s beacon still burns as bright – tonight we proved once more that the true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals: democracy, liberty, opportunity, and unyielding hope.

For that is the true genius of America – that America can change. Our union can be perfected. And what we have already achieved gives us hope for what we can and must achieve tomorrow.

Photo from alexandra.matzke (creative commons license).

Update: I can’t find embeddable video of today’s victory speech, but here’s the BBC version. Contrast though with Obama’s speech after he stormed to victory in the Iowa caucuses back in January:

You see how immediately how Obama has withdrawn into himself, become more dignified, more Presidential – after Iowa he was looser, happier, free of that foreboding he must feel now that the USA (and the mess it’s in) is his responsibility.

It reminds me of the famous picture of Cherie hugging Blair as they arrived in Downing Street the morning after Labour’s 1997 victory – where she has that poignant ‘oh shit – what have we done?’ look on her face:

Update II: Sad to see McCain having to quiet the boos (for Obama) as he conceded the race, though the crowd did get more gracious as the speech went on. As I have argued, this is probably one of those elections where the loser is driven into a temporary period of insanity by its defeat.

Rather ominous, then, that the only full-throated cheer of the night was for (a slightly tearful) Sarah Palin, who McCain described as: “one of the most impressive campaigners I have ever seen and an impressive new voice in our party for reform, and for the principles that have always been our greatest strength.”

Thought the body language between the two was pretty chilly, though. And remember this vicious quote from a few days ago, from an unnamed McCain adviser:

She is a diva. She takes no advice from anyone. She does not have any relationships of trust with any of us, her family or anyone else.

Also, she is playing for her own future and sees herself as the next leader of the party. Remember: Divas trust only unto themselves, as they see themselves as the beginning and end of all wisdom.

Update III: Have to say, I’m feeling pretty happy about my prediction of a 5% victory in the popular vote, which I made not long after Iowa and have stuck to steadfastly ever since. Have also been irritating people by saying that Obama is already a two-term President – time will tell on that one.

Update IV: Celebrating in Brooklyn:

Photo under CC license from Flickr user:  FlySi

Update V: Surprising factoid of the night – via Kos:

Something to look at in the next couple of days — turnout sucked. Not all ballots are in, but we’re currently at almost 119M for the night. We had 122M vote in 2004. So we may get to 2004 levels. A quick spot check confirmed numbers down in many states (e.g. CA, NY, OH, etc). Could it be Republicans staying home? A look at the exit polls will be on my agenda tomorrow.

Or maybe not – Politico has the opposite story:

More than 130 million people turned out to vote Tuesday, the most ever to vote in a presidential election. 

With ballots still being counted in some precincts into Wednesday morning, an estimated 64 percent of the electorate turned out, making 2008 the highest percentage turnout in generations. 

In 2004, 122.3 million voted in what was then the highest recorded turnout in the contest between President George W. Bush and Sen. John Kerry. 

Previously red states targeted by the Barack Obama campaign demonstrated remarkable turnout, setting records in North Carolina and elsewhere. Increased turnout was also reported in states including Virginia and Indiana. 

Update VI – Here’s an eye watering statistic. The election cost $4.2bn ($5.3bn if you include the congressional and senate races). 120-130m Americans voted. So that’s nearly $35 spent for every vote cast.

Update VII – From the department of sore losers, the batshit crazy Debbie Schlussel:

With Black Panthers ruling the polling places and idiocy ruling the minds, America is now unstable. This election will instantly change our lives . . . for the worse. And dummies and the mob mentality are dominating voting booths across America. Our country is now unstable like those of Europe. The numbers of Muslim aliens and U.S.-born Muslims will eventually mirror those of Europe. We’re just a decade or so behind.

Congrats, America. We’re the new Europe.

(No deodorant, lack of showers, and women without shaved pits and legs can’t be far behind . . . along with the Islamic wildings and mobs. I can already smell it. And it’s malodorous.)

The (often endearingly) grumpy John Derbyshire:

Just watched Wonder Boys speech. Hmph. Callused hands?” When did he ever have callused hands?

All right, I’m sour. The most liberal member of the U.S. Senate! And that shakedown-artist of a wife, with the permanent frown! And Joe Biden! …

I’m sour about the GOP too. What did it all get us, those 8 years of pandering and spending? If GWB had turned his face against new entitlements, closed the borders, deported the illegals, held the line on calls to loosen mortgage-lending standards, starved the Department of Education, and declined those invitations to mosque functions, would the GOP be in any worse shape now?

What won this election was the packaging skills of David Axelrod, the swooning complicity of the media, the ruthless opportunism of Barack Obama, and the unprincipled thuggishness of his supporters.

And a scared bloke in the crowd when McCain conceded:

Before McCain took the stage, Nathaniel Eyler, 29, of Phoenix, mouthed the words as the song “God Bless the USA” played.

“Scared,” he said in response to how he felt about the outcome, calling Obama a “socialist.”

“I’m not going to sugarcoat it. I’m scared. Just the idea of Barack Obama as president of the United States scares me. It does not embody the idealism I grew up with and am passionate about. We’re Americans. We’re resilient. We’ll bounce back. Our government’s idiot-proof. There’s nothing he can do that we can’t fix in the end.”

Still, he said, “We’re going to be taking steps backwards.”

The ground game

In the US Presidential election, what you see in the media is just the tip of the proverbial iceberg. The real action is on the ground, where decades of experiments and false starts have finally cohered into a new model of social organisation.

Read Zack Exley’s account to find out more:

We saw glimpses of the potential for this kind of organizing campaign in MoveOn’s 2004 and 2006 volunteer operations, the Dean Campaign and even the Bush and Kerry campaigns. And there are great examples of this kind of organizing if you go back to the social movements of several decades ago. But the Obama campaign is the first in the Internet era to realize the dream of a disciplined, volunteer-driven, bottom-up-AND-top-down, distributed and massively scaleable organizing campaign. For anyone who knows how many times this has failed to happen, this is practically an apocryphal event

Live blogging Michael ‘Heckuva Job’ Brown

Michael Brown is speaking on resilience here at RUSI – it’s the first time he’s spoken outside the US about the Katrina debacle.

From his conference biog, “During Mr Brown’s tenure, he led FEMA through its greatest period of activity in its 26 year history.” It’s the only mention of his ignominious firing… 

  • He starts with war stories about Oklahoma, 9/11, 7/7 etc. Tough to communicate under pressure – as responders suck up bandwidth, resources aren’t where they need to be, and lines of communication are not clear.
  • He spent days thumbing through the Pitt Review – “amazed and fascinated”. Problems are all identified. “I challenge you not just in the UK, but in the rest of the EU, but not just to study it, but to implement it.”
  • Heard about technology, processes, standards etc – but he’s heard no discussion of citizens and media. “If you don’t think citizens and media are involved in every single disaster, I don’t know what you’re smoking.”
  • Media will make or break your response to your disaster. If they understand what is going on, they will deliberately undermine the rescue attempt. Media must therefore be educated beforehand. “If media are not an integral part of resilience, you have no resilience.”
  • Talks about his personal resilience. Response was not good. Family told him to turn his television off – to avoid the publicity, as we the butt of all jokes.
  • Could not convince Mayor of New Orleans to do a mandatory evacuation (had to be done 72 hours in advance), even after call from President.
  • Role of citizens is vital. What do you do when you have citizens who can’t or won’t evacuate? If you fail to educate people about risk, then a response becomes hugely more difficult.
  • It is possible to educate the public about risks – but at the moment too many people believe they can use their cell phones, cash cards, microwaves when it all goes wrong.
  • Tells story of expert assessors taking fire extinguishers out of the Avon Building (in the UK I think), because residents were not trained to use them. Derides stripping out individual initiative.
  • ‘Lesson observed’ from Katrina: explain the risk better to citizens and then make sure people can get out. 
  • But that’s not the same as a ‘lesson learned’. For Ike, the message was “if you do not leave, you suffer certain death.” What does that do for the credibility of first responders? And, in case, over 15,000 people ignored the warning, and only 15 people died. “We’ve been through worse.” “The government always lies to us.”
  • He describes himself as ‘the guy who the media dragged through the mud, and now puts on a pedestal.” Is that right?
  • Urges the audience to become personal ambassadors for resilience out in their communities.  “Be passionate… convince the media and the citizens that they have a role to play too.”
  • And that’s it. Questions off the record unfortunately.

Update: It’s hard to sum up Michael Brown’s performance. He’s an oddly compelling speaker, and interesting when he speaks about the role of the media and the responsibilities of citizens in a disaster.

But his main purpose in coming to the UK seems to be to speak in defence of Michael Brown – a man he claims was victimised by the media, but is now placed on a ‘pedestal’ for his disaster management expertise.

Listening to ‘Heckuva Job’, you’d think that Katrina had only one victim: the man who Bush backed and then sacked – and who became emblematic of Republican incompetence.

A trillion dollar bailout?

Via Steve Clemons, this excerpt from a speech by Leo Hindery – an Obama economic adviser and Chair of the New America Foundation’s Smart Globalisation Initiative – which is due to be delivered later today at a conference organised by NAF:

As we all know, the Bush administration is asking Congress to let the government buy $700 billion in troubled mortgages, which would raise the statutory limit on the national debt to $11.3 trillion from $10.6 trillion. This $700 billion is over and above the $85 billion already committed to AIG, the $29 billion related to Bear Stearns, and the very conservative $25 billion associated with the bailouts of Fannie Mae and Freddie Mac.

The solutions being proposed are the most expensive combined bailout in the nation’s history and will sharply curtail the ability of the next president to push for tax cuts or new spending. And yet I believe they are not nearly enough, since they do not adequately cover the exposure associated with leveraged loans and, especially, the credit-default swaps market which has ballooned to a nearly unimaginable $45.5 trillion, from $900 billion in 2001.

This credit-default swaps market, which was developed by financiers who hired the best lobbyists they could to keep regulators away, is essentially nothing more than insurance on debt, but because there are now many more credit-default swaps outstanding than there are bonds for them to cover, it could potentially be a black hole of distress at least as large as the sub-prime mortgage crisis. Tens of trillions of dollars ago these swaps became nothing more than a way to gamble with almost no money down.

Alan Blinder suggested over the weekend that “the root cause of all of [our credit problems] is declining house prices”, and he is correct – but his observation ignores the fact that to this particular root ball were grafted a lot of other financial instruments which have together grown into one heck of a tree.

Senators Kent Conrad, Byron Dorgan and Richard Shelby of Alabama, and others, were more right than wrong when they said last week that more than likely “we’re talking about a trillion dollars.”

The Caucasus crisis: Conspiracy theory #21

Numerous conspiracy theories on the Caucasus crisis are zipping round cyberspace. The latest from from Scott Lucas at Birmingham University:

it turns out that Dick Cheney’s deputy assistant for national security affairs, Joseph Wood, was hanging out in Tbilisi just before Georgia’s assault upon South Ossetia on 7 August.  The official explanation is that Wood was helping set up Cheney’s visit to Georgia, along with stops in the Ukraine and Azerbaijan, in the first week of September. Hmmm…