How to Destroy Obama, Part II

With this most recent gaff, following on the press stampede over his bowling abilities, I’d say that all the pieces are in place to plop Senator Obama firmly into the standard media narrative of the elitist liberal. Last week’s New York Times Sunday Magazine story (Sokolove, Michael , “Change Makes a Call on Levittown,” 6 April 2008) was essentially sympathetic and by a liberal supporter, but it was a toe in the water of the narrative.

Now we just need a story associating the Senator with some characteristic liberal elitist consumer good. Sacre bleu! Senator Obama welds a mean crocket mallet! Or that Malia Ann and Natasha were raised on Baby Einstein when heartland kids were running around in the woods with bb guns. Or hell, there’s nothing like the golden oldies: maybe there’s a picture of him windsurfing somewhere. Crocket playing, Baby Einstein watching, windsurfing liberal elitists! Then all that will be left is for Maureen Dowd to bless it with a few of her trademark witticisms and it will be off to the races.

Combine the Reverend Jeremiah Wright story, the budding liberal elitist story has got to be causing a lot of relief over at the McCain campaign. For the first time since his 2004 Democratic National Convention speech, Senator Obama is looking beatable.

What supporters of the Senator don’t get is that an election is not an occasion for a candidate to speak truth to electoral power. It is a contest to see who can flatter the electorate most vociferously without going so far as to sound insincere (special thanks to Mitt Romney for helping to demarcate the outer limits of this phenomenon). Every prejudice in the country must be honored, no matter how ill-founded or small-minded and no matter how much in conflict with the interest group to whom the candidate read a litany of promises just last week.

This is the problem with young, idealistic and first time voters as your base. They have no idea why it is that old politicians are so bland and cynical. It’s because that’s how one gets to be an old politician. The problem with Senator Obama is that he has had too many positive experiences telling the truth — or, honestly, well hedged and carefully parsed truth — he’s not exactly getting up in your face with it — and it has gone to his head. He started to think that he was invincible, that the sort of stuff that liberals say in their publications or to each other in closed-door strategy sessions could be said for mass consumption too. He hasn’t had enough chastenings like the one that he is presently receiving. These are lessons that most politicians learn on the small stage, before acceding to the national stage. This is what people mean when they say that Senator Clinton has superior experience.

It’s quite possible that this was the inevitable story that a month in Pennsylvania was going to generate and he would have been better off to have avoided the state altogether. But he’s in, so now he’s got to do something. The primary night election analysts are going to be zeroing in on the class, income and race demographics of returns and it will be the primary story of the night, even before the Clinton campaign begins to spin this aspect of the story hard the next day. One can already see the rumblings of the liberal elitist narrative, but the actual voting could be the story that finally gives it legs.

Now this is me playing instapundit. It’s the perception of the hour and one of the phenomenal aspects of Senator Obama so far has been his ability to come back strong. On the other hand, a similarly surprising aspect of the Senator has been his excess of conciliation with mortal opponents — witness the Samantha Power imbroglio.

Hillary Clinton’s pending win in Pennsylvania is going to do a lot to resuscitate her campaign. If she can plausibly dovetail it to a narrative about how she can win in the difficult states, that’s going to pose a real threat. Senator Obama has got to kill this. Apologies and some words about how he misspoke aren’t going to cut it.

Dan Savage’s Mother

I think that, like just about everyone else, I view my life as a series of cycles running Monday through Sunday. Some may pick Sunday through Saturday, but whatever the case, somewhere back in the mists of time someone arbitrarily picked the seven day grouping as the next most basic division after the day and with all the institutional reification, we just think that way. No TGIF for me: the high point of my week is Thursday morning. I get coffee and a baked good on my way in and just as soon as my work PC is booted up, I bring up the website of The Stranger and spend the most coveted fifteen minutes of me week immersed in the wit and wisdom of Dan Savage and the depravity and befuddlement of his correspondents. Hungry pervert that I am, this is indisputably the highpoint of my week.

I followed my normal routine this week with the usual growing anticipation. It started slow — a lot of Mr. Savage’s own words — I usually prefer the columns with more of his own writing than that of his advice seekers, but I was waiting for the punch line, but there wasn’t one this time (“At a Loss,” The Stranger, Vol. 17, No. 31, 10 April 2008).

I thought I could bang out a column today — a regular column, a column about my readers’ problems and their freaky fetishes and all those asshole politicians out there. You know, the usual.

The day my son was born, I managed to slip out of the maternity ward and write a column; I wrote one the day I was indicted by the state of Iowa for licking Gary Bauer’s doorknobs. (I was actually indicted for voter fraud — on a trumped-up charge, your honor — but Bauer’s knob needs all the attention it can get.) I’ve written columns on days that I was dumped and on the morning of 9/11. So I figured that I could bang out a column today.

I opened my laptop and started reading your letters. I love reading your letters — I do. But I couldn’t get into it. I just don’t have a column in me this week. I’m disappointed in myself. I write this column at Ann Landers’s desk, for crying out loud, and the old lady banged out a heartbreaking, truncated column when her marriage collapsed. If Landers could bang one out under that kind of emotional strain, then I could damn well bang one out, too. Just do it, right? Just fucking do it. But I just fucking can’t.

My mother died on Monday.

S. and I have read both of Dan Savage’s personal books. We read The Kid one after the other at the recommendation of a coworker (thanks Donna). I read The Commitment to S. as she drove on a number of five hour trips back and forth to her parents’. We laughed and laughed and got angry and were provoked to numerous discussions and had some sentimental moments. We have pushed these books on anyone we judged sufficiently edgy and open minded to enjoy them as well. (I have previously commented here.)

One of the standout characters of these books has been Dan Savage’s mother. I have vague imaginings in my mind’s eye of the Chicago home where Mr. Savage grew up, where the kitchen must have been situated with respect to the rest of the house (the referenced learning to bake cakes), what the back alley must have looked like, et cetera. She was alternately a voice of calm and reason intervening at the apex of a crazy moment, or someone humorously driving Mr. Savage to such a situation in her humorously pillared idiosyncratic insistence — especially so in The Commitment.

There is also something deeply weird about my sad response. My first inclination is to blame my emotional involvement with a complete stranger on the exhibitionism and voyeurism of the Internet age. But I imagine that people have been becoming emotionally involved with famous people, national leaders, writers who have used their biography as source material, et cetera for generations. Perhaps it is a phenomena of the wider age of mass media.

Whatever the case, I feel like Dan Savage is a friend of mine — if not exactly in the usual meaning of “friend” — even if I’m a complete stranger to him. His books have taken life’s milestones as their subjects and given them a contemporary, tradition-defying take. I am hoping that coping with death — certainly one of life’s milestones — may be the subject of his next book. And maybe it can be a platform for how an atheist cops with it.

Blogger Karōshi

The New York Times has an article about blogging yourself to death (Richtel, Matt, “In Web World of 24/7 Stress, Writers Blog Till They Drop,” 6 April 2008). The Japanese, for whom this is not a new phenomena, actually have a word for death by overwork: Karōshi.

Matthew Yglesias asks what’s the big deal? (“Death by Blog,” TheAtlantic.com, 6 April 2008). “…[T]o me the most draining times are really those times when I’ve undertaken substantial work on top of the blog.” I, on the other hand, have undertaken a blog on top of substantial work. I’m not a full-time blogger. I have a 40 — okay, more like 50 or 60 — hour a week job. I blog over my lunch break — when I take one — and in the evenings. Often times I feel like I have two jobs. Writing even a few posts is, for me, very time consuming. I get home in the evening and think, “Now it’s time to start my second job.” It frequently takes me a couple of late nights to finish a post and when the end is in sight, I often chase the mirage of finishing until dawn and the horror of birds chirping (Quoth the raven, “Time to get your ass to work”). Back in 2005 I ran a few queries and found that my average post was made between 10:00 at night and 6:00 in the morning (“Hundredth Post: Taking Stock,” smaties (first series), 18 January 2005). I would provide some current stats, but the new blog has a lot more complex a data model than what I developed.

I’m not griping — I’m just riffing. I do it to myself: I’m a wannabe intellectual with a boring day job. I wish I were a writer and I am desperate for a little intellectual exercise. The problem is that by depriving myself of as much sleep as I am, I am incurring as much brain damage as I am engaging in brain stimulation.

And Mom: I turned off comments not to thwart open thread on your concern for my health, but because of a recent rash of comment spam.

Television Lineup of the Damned

The three most despicable shows on television this season, namely Hell’s Kitchen, Moment of Truth and Are You Smarter Than a 5th Grader are the perfect shows for the decadence of the new Rome.

Hell’s Kitchen has managed to combine the Colosseum and the Vomitorium into one unseemly arena (Mr. Ramsay actually did throw up one recent contestant’s dish into a garbage can). Just what America needs: more arrogance, intemperance and yelling. And this time from a Britt. Thanks. We need more over here so keep ’em coming. We’ll send you all our sensible and mild mannered citizens.

Moment of Truth is the perfect show for the Bush years: it’s the propaganda lulling — or jarring — us all in the mindset to unproblematically accept the surveillance state. You may think that the executive overstep is a problem, but in fact it’s fun for the whole family. Who says that capitalism is inimical to the authoritarian state? Here one is sort of the advanced team for the other.

As if Who Wants to be a Millionare wasn’t insipient enough — I found the glacial pace of the show maddening, but apparently it was necessary for the viewership to keep up with the complexities of the game — now there’s the next big game show, Are You Smarter Than a 5th Grader, where the contestants giggle unashamedly at demonstrating the answer to be “no.” Oh! for the days of Win Ben Stein’s Money. Clive Crook worries that possibly for the first time ever, retiring workers are better educated than their new entrant replacements (“The Dumbing of America,” TheAtlantic.com, 28 March 2008). The study that he discusses uses master’s degrees as its reference point. Meanwhile in the rest of America, less than grade school is the benchmark of aspiration. With over a billion people, China will soon have more people with Ph.D.s than the U.S. will have people of any and every level of educational attainment and we keep on talking about a potential future peer competitor. The CCP must find that real rich.

Swords Need No Demonstration

Kevin Drum has a post on right-wing anger over a Pizza Hut delivery guy who was fired after he shot an armed robber. Pizza Hut fired him because corporate policy prohibits employees from carrying weapons on the job (“Guns on the Job,” Political Animal, The Washington Monthly, 2 April 2008). This seems like the opportune occasion to break out another passage from Neal Stephenson’s Snow Crash:

When they gave him the job, they gave him a gun. The Deliverator never deals in cash, but someone might come after him anyway — might want his car, or his cargo. The gun is tiny, aero-styled, lightweight, the kind of gun a fashion designer would carry; it fires teensy darts that fly at five times the velocity of an SR-71 spy plane, and when you get done using it, you have to plug it into the cigarette lighter, because it runs on electricity.

The Deliverator never pulled that gun in anger, or in fear. He pulled it once in Gila Highlands. Some punks in Gila Highlands, a fancy Burbclave, wanted themselves a delivery and they didn’t want to pay for it. Thought they would impress the Deliverator with a baseball bat. The Deliverator took out his gun, centered its laser doohickey on the poised Louisville Slugger, fired it. The recoil was immense, as though the weapon had blown up in his hand. The middle third of the baseball bat turned into a column of burning sawdust accelerating in all directions like a burning star. Punk ended up holding this bat handle with milky smoke pouring out the end. Stupid look on his face. Didn’t get nothing but trouble from the Deliverator.

Since then the Deliverator has kept the gun in the glove compartment and relied instead on a matching set of samurai swords, which have always been his weapon of choice anyhow. The punks in Gila Highlands weren’t afraid of the gun, so the Deliverator was forced to use it. But swords need no demonstration. (pp. 1-2)

Note this is from pages one and two. I have a minor interest in how authors begin a book and so occasionally will pick up a book and just read the first few sentences or paragraphs. This is the most memorable book beginning I have ever encountered. What follows is the text that, not having read it, you have not fully claim to have joined the ranks of geekdom.

How to Destroy Obama, Part I

Dinesh D’Souza brainstorms his smear against a potential nominee Obama (“Ten Truths About The Election,” TownHall.com, 31 March 2008):

If Obama is the nominee, this is the GOP campaign commercials I envision. It begins by showing the rantings of Wright: America deserved to be attacked on 9/11, the government sponsors the Ku Klux Klan, AIDS is a federal plot, God damn America! These images are accompanied by a voice-over noting that Wright is Obama’s longtime mentor, and that Obama has attended this church for two decades. Then we see Obama saying he will no more disavow Wright than he would disavow a family member. Finalloy we see pictures of the two men embracing while a voice says, “Is this the man who is going to bring America together and stand up to our enemies?” At this point, it’s done!

Of course, I am busily thinking up my own ideal hit piece against Senator McCain and I can imagine throwing in a little religious wackoness and we deserved September 11th from the right, so I guess all’s fair. Just set aside any hope of a clean campaign. The 2008 general election will be the Bush doctrine as cornered animal. Expect it to bite.

And number ten of Mr. D’Souza’s truths about the election: Hillary Clinton will have a President Obama killed (no insinuation regarding Vincent Foster, this is the respectable right here, not the loonies).

Campaign Doldrums

Way to go laying out the calendar for the primaries Democrats. Here’s George Packer on the effect (“Stop Shouting!,” Interesting Times, The New Yorker, 25 March 2008):

What we are witnessing is a controlled experiment in modern campaigning: eliminate policy differences between two candidates; space out the primary schedule so that it remains empty for seven weeks, thereby creating a political-news vacuum in which the candidates and their supporters continue to give speeches, hold press conferences, or blog nonstop; and subject every word to the scrutiny and amplification of the twenty-four-hour news machine. The predictable result is that two appealing politicians will quickly start to lose their lustre, until, by the time Pennsylvania gets to vote, on April 22nd, Barack Obama and Hillary Clinton will seem like the smallest, meanest, dirtiest, lowest, most dishonest candidates ever to run for office in the United States.

A Tale of Two Elections

My thinking on the election at this point has been twofold. First is that a Barack Obama-John McCain matchup is good on either theory of campaigning, base mobilization or capture the middle. Senator McCain fails to mobilize the base, but has a lot of crossover appeal. However, the base just won’t give him a break so the need to throw them red meat will be endless and in his desperate attempts to mollify the base, he will sacrifice whatever crossover appeal he has. Senator Obama also has crossover appeal, but with a base more than enthusiastically behind him, he will be free to concentrate entirely on capturing independents. That’s an equation that just works for Democrats.

On the other hand, I’ve thought that 2008 could see an election in which spending by 527s could dwarf that of the actual candidates campaign committees. In 2004 the John Kerry and George Bush campaigns together spent $957 million and independent advocacy groups spent another $436 million. In 2008 it is anticipated that the 527s will constitute an even larger portion of total campaign spending. The candidates’ message could become only one of many voices, lost in the din. Their ability to shape their message could be totally lost amidst the interest groups with only limited commitment to the candidate’s agenda and no organizational connection. For instance, the Swift Boat Veterans for the Truth specifically said that even if the Bush campaign or the RNC has asked them to desist their attack ads, they would not. John McCain has said that he wants to run an honorable, respectful campaign, but that may be out of his hands. Barack Obama may want to avoid any divisiveness, but similarly he may only have partial say in that.

These two thoughts are at odds because a wildly out of control, dirty campaign could end up mobilizing that right wing base that had originally resolved to stay at home. Adequately convinced of the depravity of Senator Obama, Senator McCain might start looking pretty good. The sentimental types have a hard time acknowledging this about the American character, but hate is a far more energetic motivator than affection. Similarly independents, always unsure about this black man, could be easily swayed once the flowery rhetoric is displaced by the images of an angry radical. I believe it was Karl Rove who said watch political commercials with the sound off to understand their true impact. Language is only going to get Senator Obama so far.

And so Kevin Drum gives me pause today (“Why Hillary Fights,” Political Animal, The Washington Monthly, 30 March 2008):

Of course Barack Obama can win against John McCain. And I still believe that.

But I’d be lying if I didn’t admit that the Jeremiah Wright controversy has shaken my confidence a bit. This has nothing to do with the substance of the thing, which I think has been wildly overblown, but by the conservative reaction to it. Go scan The Corner and you’ll find Mark Steyn and Victor Davis Hanson and the rest of the gang still in an absolute lather over Wright. Ditto for other conservative sites. They have no intention of allowing this to die, and I have no doubt that it will resurface with a vengeance in every last swing state this fall. When Obama continues to fail to denounce Wright thoroughly enough — and believe me, no denunciation will ever be enough with this crowd — then eventually the crossover Republicans who were singing Obama’s praises after Super Tuesday will, sadly but inevitably, use this as an excuse to switch their support to McCain. Can’t vote for a guy who doesn’t have the balls to disown an outraged black guy in a dashiki, after all. Ditto for a lot of political moderates who have fallen under the Obama spell but are really more anti-Hillary than they ever were pro-Obama.

Now, my guess is that, in the end, this won’t work. The polls taken after Obama’s race speech showed, gratifyingly, no reduction in his support, suggesting that a sleaze campaign will have a harder time working against Obama than it did against John Kerry. Still, it’s out there, and it’s pretty clearly part of the game plan for the fall campaign. I think Hillary’s folks are wrong to believe that Obama is doomed, but I’m not sure I think they’re delusional any more. There’s every sign that we have an ugly campaign ahead of us.

I just wish that once in my lifetime the Democrats would nominate someone legitimately hungry and angry, someone who had justice in their veins and realized that instituting in the world was going to require blood and who was willing to destroy the forces that stood in their way. I want the Dean scream, I want the crazy Al Gore circa 2004. I want Lyndon Johnson. Instead we get these wheedling, whining, preening milktoasts who think that an election is a word-emitting contest. I don’t know, maybe I’m a lunatic partisan at this point.

I too still think that Senator Obama will win, but it’s going to be ugly and Senator Obama still looks to me like a guy with a lot of on the job learning to do about the workings of a national campaign.

Destroy This Mad Brute

H.R. Hopps, U.S. Army First World War propaganda poster, "Destroy This Mad Brute — Enlist", 1917

Jill Filipovic at Feminista and Erica Barnett at The Stranger both think the cover of the April 2008 issue of Vogue (above, right) is some weird racist adumbration to King Kong (“I Know Vogue Isn’t Exactly Racially Conscious, But…,” 15 March 2008; “The LeBron James Vogue Cover Controversy,” 26 March 2008, respectively). In comments a lot of people discount the idea by pointing out the faint resemblance and go on to suggest that making such a leap when the source material is so vague is suggestive of some racist machinery at work in the minds of Mses. Filipovic and Barnett. SLOG has made it a poll with 88 percent of respondents — in crunchy Seattle even — declaring it not racist.

Every time I’ve walked past this issue of Vogue it has caught my attention — it’s a striking, if not attractive, photograph — but I haven’t been able to say why and just dismissed it as some visual itch that I can’t scratch. Then I read Ms. Barnett’s post on SLOG and recognized it immediately. Mses. Filipovic and Barnett are right about what’s going on here, they just have the wrong source material. The resemblance to the King Kong cell may be distant, but it is more than unmistakable that the reference to this poster is intended. The posture, the facial expression, the basketball in place of the club, even the color of Ms. Bundchen’s dress all match. In fact, to get such a resemblance I imagine that Annie Leibovitz must have had to show them the image that she was trying to recreate.

While fielding PC service calls at Amazon.com in the late 1990s I came across this H.R. Hopps U.S. Army First World War propaganda poster hanging in someone’s office (the 4th floor of the 2nd and Pike building) and immediately fell in love with it. It’s one of those images has managed to distills the worldview of an era into a single flash of the eye. And it rewards deeper viewing. I have had it hanging in my bedroom for years now and careful consideration rarely fails to inspire some new thought about the perversities of the American worldview represented therein.

In the distance the crumbling ruins of old Europe, strangely suggestive of the outcome of the air power attacks still 30 years in the future. A gorilla with a Kaiser Wilhelm II mustache and a German Pickelhaube emerging from presumably the Atlantic Ocean onto the shores of America. The helmet says “Militarism,” the bloody club “Kultur.” That Europe is portrayed as decrepit, barbaric and militaristic. What can it mean that culture is considered on par with militarism among the horrors that this mad brute visits upon the shores of America? Or that the proper metaphor for culture is a bludgeon? Is it any wonder that Americans are such philistines with a history like this?

And race imagery was common in these old propaganda pieces. Witness the exaggerated, flabby lower lip on the gorilla above (do gorillas even have large lips?).

It’s fairly obvious that this imagery derived parts of its power from tapping into that same set of ideas as the verbal formulations of white mans’ burden, mission civilisatrice, the dark continent, et cetera. People imagined a spectrum running from Christian, white European civilization to black, pagan African barbarism. Much of the dialog in the segregated U.S. partook of this scheme with a considerable discourse around the relative levels of sexuality, animal vigor, impulse control, intellectual capability and moral sociability of the races.

So whenever the time came for the denigration and dehumanization of an enemy people, this stock of tropes, civilization and barbarism, Europe and Africa, white and black was rolled out. And to add to the sense of barbarism and the anxiety of the viewer, an image of sexual peril was often thrown in. Here you have Germans depicted as an Africanized gorilla. During the Second World War depictions of Japanese in the propaganda posters were routinely made with what were then referred to as “negroid” features — dark skin, large lips and broad, flat noses — though today we might conceive Asian people as being farther down the spectrum from Africans than are Europeans. The depiction of Japanese as posing a sexual threat to white women was also a common theme.

One of the brilliant aspects of this propaganda piece is its ironic turn of the civilization and barbarism narrative against the Europeans themselves. White Americans have always considered themselves superior to their European forbearers. Set apart by the Atlantic Ocean from the corrupt realpolitik of the Continent, protected by its manifest destiny from the national compromises foisted upon a people by the necessities of maneuver against peer competitors, the United States could cultivate virtue and prosperity in peace. Purified of the distractions of vulgar kultur, America would be the new Jerusalem, the shining city on the hill. Against this development, Europeans were the first gradation of barbarism on the way to Africa. And within Europe there has always been a discourse regarding the relative levels of civilization of the various white races with the Germanic and Slavic people on the defensive. So depicting the Germans as African was natural in this context.

These are all tendencies that persist to this day. Witness the uproar over Donald Rumsfeld’s dismissal of “old Europe” or the dialog on the right where the characterization of the United States as “the last, best hope for humanity” has become a constant cliché (President Bush used the phrase in a Commencement Address at Ohio State University on 14 June 2002; William Bennett used it for the title of his two volume history of the U.S.; John McCain has used it about three dozen times on the campaign trail). On the true right — and its mirror image in fundamental American culture, the left — Henry Kissinger is reviled: a German import: too much Metternich and Talleyrand for America.

It is exactly this cultural reservoir that the imagery of the propaganda poster and through it, the cover of Vogue magazine draw. Ms. Bundchen smiles, easing the element of sexual peril — at least on the part of the participants, if not all viewers — but Mr. James lowers himself from the upright, slender man that he is to the same hunched-back incoherently yelling thug of a century ago.

Are our race perceptions so firmly entombed in the past that it’s safe to break out such images, tongue in cheek? With media spectacles of dog fighting and sex with underage groupies even among the economically successful in the African American community, horror movies depicting Eastern Europeans and Central Americans dismembering innocent Americans on vacation and constant real life stories of nice young blond American girls going missing amidst the brown peoples of the world still sewing questions in the minds of white people, does Vogue really feel that homage to some antique propaganda dredged from a crude and anxiety ridden past is in order? Or do they just channel the Zeitgeist? It would seem to me that just below the level of official or explicit statement is a raging discourse of symbols and narratives, whose points lay between the lines, regarding race which is not too far removed from the uglier, more explicit discourses of the past.

Whenever something like this happens — some ridiculously non-PC image making it into the mass media — I wonder how it was that it came about. Is some smarty-pants photographer pulling a fast one on an under-educated editor — intentionally selling them a bill of goods? Or was everyone in on the joke — it’s just that everyone top to bottom signed off on it. Or are there just cultural coincidences of this magnitude? Is it like some mental urp of the collective unconscious? Or — most likely — are our media mandarins really so cynical that something like an homage to a gang rape à la the Dolce & Gabbana advertisement seems like a good way to move product. No publicity is bad publicity.

I can understand LeBron James and Gisele Bundchen being too dense to see what’s going on in this poster, but how it is that Annie Leibovitz participated in the production of such an image is completely beyond me. I seriously wonder what Susan Sontag would have had to say about it. She certainly wouldn’t have discounted such visual allusions. Oh, to know what the state of discussion was around their apartment.

The Committee to Save the World, Ten Years On

The Committee to Save the World, Time Magazine, 15 February 1999

It’s mostly consigned to the past, but it increasingly seems to me that the Asian financial crisis of 1997-98 and the attendant reaction of U.S. economic policy makers was the watershed economic event of the present era. The economic handlers of the time, most outstandingly Alan Greenspan, Robert Rubin and Lawrence Summers came as close to the rank of heros as economic policy makers are allowed (“the committee to save the world” in Time Magazine’s famous formulation). During the period 2 July 1997 through 23 September 1998 — the floating of the Thai baht to the deal to bail out Long Term Capitol Management — the Federal Reserve held rates steady at 5.5 percent, then in September, October and November made a succession of impressively restrained off-committee 25 basis point rate cuts. The firebreak held and the U.S. economy got another 24 months of economic growth, crossing the line to become the longest uninterrupted economic expansion in U.S. history in February of 2000. On such a basis is the formidable reputation of Alan Greenspan built.

But the unenunciated strategy of Greenspan, et. al. during this period was to stave off the spreading crisis by converting the vast and voracious American body of consumers into the buyer of last resort for the world. The countries in crisis would be propped up through IMF aid packages, but also through the newly enhanced competitiveness of their goods on the U.S. market. This was accomplished through the aforementioned interest rate cuts, but also at Treasury through the strong dollar policy.

U.S. trade deficit, 1991-2005

Source: Wikipedia; U.S. Census Bureau, Foreign Trade Division

The broadest mechanism by which interest rates work is through home mortgages. As interest rates decline they set off a wave of home loan refinancing, liberating spending previously sunk into housing costs. That combined with the (psychological) wealth effect of the stock market and a historic credit binge came together in the person of the American consumer to pull the world back from the brink. A glance at the above graph of the trade deficit shows that 1997 was the inflection point.

In so far as the way that the U.S. opted to combat the global spread of the anticipated “Asian contagion” was to transform the U.S. consumer into the buyer of last resort through loose credit, the collapse of the housing market bubble is the continuation of, or the knock-on effects of the Asian financial crisis of 1997-98. It could only be postponed, not avoided; transformed, not stopped. Old wine in new bottles.

It was fairly apparent to most observers during the late 1990s and 2000s that the Federal Reserve was struggling to stave off a crisis and did the best that it could, but was merely kicking the can down the road. There was plenty of commentary at the time that the Fed was merely letting pressure off one bubble by inflating another. And inside the Fed they were fully aware that this was what they were doing, but they had to deal with the crisis at hand and figured that they would cross the bridge of the iatrogenic consequences of their policies when they came to them.

In this sense the ultimate cause of the present economic crisis is a structural imbalance in the world economy that has a tendency to generate crises. One portion of the world, the developing, produces without consuming and as a result experiences a glut of savings. The other, the U.S., consumes by borrowing the surplus savings of that other portion of the world. Witness the current account deficit of the United States with China and the strategic fallout thereof. The problem is political-economic in nature and the ultimate solution lies in the realm of politics, not behind the scenes financial wizardry.