Remember that Bush slogan? This was going be the time when people and businesses would be responsible for themselves, without the government clinging like a monkey on their backs. The free market would set things right and, unfettered by bureaucracy and unspoiled by handouts, America would prosper like never before.

Well, it didn’t exactly turn out that way, did it?

I’m not sure how many of you have heard of Danny Schechter, a Nieman Fellow at Harvard, former 20/20 producer and reporter, winner of several Emmys and one of the smartest critics of the American media on the planet. I used to link to him until about 2006, when he fell off my radar screen.

Now he’s back on my radar screen. I just read one of his articles that is so terrifying, I have to conclude Schechter is either clinically insane or a prophet. If you want to google around, you’ll see that he is highly respected and has a rather incredible track record when it comes to dissecting what’s actually going on in the world (as opposed to what we see in the media).

Anyway, all of that was just a way to lead up to to this link. This is about as over the top as one can possibly get – or so it seems. But it would also have been over the top six months ago to even think, let alone to say out loud, that Bear Stearns, Merrill Lynch, Lehman Brothers, AIG and others (many more to come) would crumble one right after the other. Totally over the top.

Schechter says we may be on the verge of a civil war. Normally this type of alarmist talk would make me laugh my head off, but not in a week when I read that the domino effect of the subprime crisis could soon lead to similar meltdowns around the globe.

But back to Schecter’s post. Just a short snip:

Some are saying that because of this dire emergency, the election could be “postponed.” That may be too unlikely and unnecesary, especially if it is fixed or if both candidates sign on to the PLAN, what ever it is. We don’t even know the details yet but both McCain and Obama are aboard as you may have seen on 60 Minutes Sunday night.

This seems to follow the pattern layed out by Naomi Klein–create a shock and disorient the normal processes of government to impose emergency rules by fiat. It is shocking, but few in the media are even presenting the voices of critics who feel this way.

This measure is being sold as a way to help everyday Americans but the first time that members of Congress wanted the bailout to apply to distressed homeowners, Tresasury Secretary Paulson’s predictable response was a big fat NO WAY.

Thanks a lot.

This power grab has a name—“the troubled assets relief program” or TARP. Gretchen Morgenson of the NY Times compares this tarp to others, “the kind of thing they spread over muddy fields so you don’t spoil your Guccis.” This is also a tarp they seem to be pulled over the eyes of the American people and its Congress as the fear weapon is used again as it was after the last 9/11.

He goes on to say an actual armed insurrection in America is not out of the question in the weeks ahead. Yes, I know how nuts that is sounds. But this guy is not a fool and he’s not crazy. Of course, he may be totally wrong (I sure hope so), but he’s got credentials and he’s equal opportunity – he goes after Obama’s campaign manager without mercy. (Scroll down in that post to find the Schechter quote.)

So I am not saying I agree, only that I am listening and wondering, just how serious is the crisis we are in? Are we on the verge of a precipice as steep and equilibrium-eradicating as 911? It doesn’t feel quite that severe, but can anyone read the headlines and say there isn’t a surreal mood settling in around the nation, a state of angst and confusion, as if we were heading into an uncharted and possibly dangerous territory? I can only relate it to 911 because that was perhaps the only time in America, ever, that I had to ask myself, What the fuck is going on? Is this a dream or reality? What is happening to the world? Today, especially after reading Schechter’s piece but even by simply reading the headlines.

And do keep an eye on gold.

MoDo has written a splendid column. As it starts, you groan because she seems to be using her usual cheeky tricks. And then it picks up speed and gravitas. I know, Maureen set the bar kind of low, but this is her magnum opus. First time in years I’ve read one her columns and ended up angry – and not at her.

Have to add the money quote – a long one.

OBAMA: What would you do?

BARTLET: GET ANGRIER! Call them liars, because that’s what they are. Sarah Palin didn’t say “thanks but no thanks” to the Bridge to Nowhere. She just said “Thanks.” You were raised by a single mother on food stamps — where does a guy with eight houses who was legacied into Annapolis get off calling you an elitist? And by the way, if you do nothing else, take that word back. Elite is a good word, it means well above average. I’d ask them what their problem is with excellence. While you’re at it, I want the word “patriot” back. McCain can say that the transcendent issue of our time is the spread of Islamic fanaticism or he can choose a running mate who doesn’t know the Bush doctrine from the Monroe Doctrine, but he can’t do both at the same time and call it patriotic. They have to lie — the truth isn’t their friend right now. Get angry. Mock them mercilessly; they’ve earned it. McCain decried agents of intolerance, then chose a running mate who had to ask if she was allowed to ban books from a public library. It’s not bad enough she thinks the planet Earth was created in six days 6,000 years ago complete with a man, a woman and a talking snake, she wants schools to teach the rest of our kids to deny geology, anthropology, archaeology and common sense too? It’s not bad enough she’s forcing her own daughter into a loveless marriage to a teenage hood, she wants the rest of us to guide our daughters in that direction too? It’s not enough that a woman shouldn’t have the right to choose, it should be the law of the land that she has to carry and deliver her rapist’s baby too? I don’t know whether or not Governor Palin has the tenacity of a pit bull, but I know for sure she’s got the qualifications of one. And you’re worried about seeming angry? You could eat their lunch, make them cry and tell their mamas about it and God himself would call it restrained. There are times when you are simply required to be impolite. There are times when condescension is called for!

“Heh. Read the whole thing.”

It takes a great writer to enrage you and make you laugh out loud at the same time.

People should stop picking on vice-presidential nominee Sarah Palin because she hired a high school classmate to oversee the state agriculture division, a woman who said she was qualified for the job because she liked cows when she was a kid. And they should lay off the governor for choosing another childhood friend to oversee a failing state-run dairy, allowing the Soviet-style business to ding taxpayers for $800,000 in additional losses.

What these critics don’t understand is that crony capitalism is how things are done in Alaska. They reward failure in the Last Frontier state. In that sense, it’s not unlike like Wall Street’s treatment of C.E.O.’s who run companies into the ground.

Look at Carly Fiorina, John McCain’s top economic surrogate — if you can find her this week, after the news and her narrative fused in a negative way. Dismissed as head of Hewlett-Packard after the company’s stock plunged and nearly 20,000 workers were let go, she was rewarded with $44 million in compensation. Sweet!

Thank God McCain wants to appoint a commission to study the practice that enriched his chief economic adviser. On the campaign trail this week, McCain and Palin pledged to “stop multimillion dollar payouts to C.E.O.’s” of failed companies. Good. Go talk to Fiorina at your next strategy session.

Much more, and it gets funnier. Comments are worth a read, too.

Will try to get back to China blogging soon. The US needs me more at the moment, I’m afraid.

An amazing post by the great David Wolf. I have nothing to add, but want to make sure no one misses it. A textbook example of the ethical landmines scattered across China’s business landscape. (Via Danwei.)

To my shock, I was able to access this site, the first time I’ve gotten onto a typepad site here in years.

In fact, we’re deeper in the woods than ever. All the elements are in place for a continuation of the unthinkable becoming thinkable. For the past 18 months or so I’ve said we would have a sharp downturn highlighted by a battered dollar and inflation and malaise. I was careful to say I did not expect a full-scale meltdown. Now I am a lot less sanguine. I think this excellent article captures the heart of the question that’s baffling most Americans: “How do the failures of these financial institutions affect me? Why should I worry?”

The big unanswerable question, though, is what happens next. Hurricanes start out as a heavy breeze, and then get worse—and the preconditions for a financial hurricane are very much in place. If a real hurricane needs high ocean surface temperatures and warm humid air, a financial hurricane needs generalized nervousness and a general lack of liquidity. Once those are in place, a few failed trades are all that is necessary to precipitate a very nasty chain reaction.

…Lehman Brothers has more than $600 billion in assets that will need to be liquidated as part of its bankruptcy. That’s an order of magnitude greater than any bankruptcy the world has ever seen: No one has a clue how to even get started on something so huge, let alone what the repercussions will be. Is there $600 billion in cash sitting on the sidelines of the global financial markets just waiting for an opportunity to snap up assets on the cheap? No. So as Lehman’s assets get liquidated, asset prices in general, and bond prices in particular, are likely to be under a great deal of pressure

In turn, that’s going to hurt other players in the global financial system, from hedge funds and sovereign wealth funds to small- and medium-sized regional banks. Anybody who’s leveraged and who marks their assets to market is at risk of margin calls and possible bankruptcy themselves, depending on the volatility and risk profile of those assets.

The upshot is a state of radical uncertainty…There is a very, very long list of things that could go horribly wrong from here on out. The liquidation of Lehman is one; the possible collapse of American International Group is another. Beyond that are countless hedge funds and other financial institutions which, collectively, present significant systemic risk.

But the biggest and most obvious risk of all is the one associated with Lehman’s own debt, which is now trading at less than 35 cents on the dollar. That’s a big loss for the institutions holding it—but it also means an unknowably huge loss for anybody who wrote credit protection on Lehman Brothers at any point over the past five years. Those sellers of credit protection are staring down the barrel of billions of dollars in claims, and they’re going to have to raise that money quick by selling anything they can get their hands on—and that might well include stocks.

So you think that we’ve dodged a bullet with the Dow still above 11,000? Just wait. This thing ain’t over yet. In fact, it’s barely begun.

As imbeciles argue about lipstick and flag lapel pins and the latest silly gaffe of the day, many of us are at risk that we do not comprehend and that we think the government can hold at bay. They can’t. It’s too big. Maybe they can contain it until after the election, but I’m skeptical. The worst is not over (as everyone was saying after the Feds seized Fannie/Freddie). We may see some bargain hunting in the weeks ahead that makes it all seem fine, but that will be a mirage. We saw what happened with the dot-com disaster: stock prices kept going lower and lower, and those who jumped in thinking they were getting great bargains got flayed alive. Especially if they did so on margin. Anyone who trades on margin at this time, even for buying gold, is setting themselves up for ruin.

The very idea of electing to the presidency a dedicated anti-regulation, economics-averse war-mongering liar is insane. Insane.

Speaking of imbeciles, I found this quite amusing.

Update: A friend of mine who lives off of gold trading just wrote me the following:

I took a $150k hit in the PM slide but am quickly recovering as I have been purchasing more shares around the $750 level.

Gold/Silver have entered the Wave 3 up move which will be violent in its swings — both up and down.

As JS recommends: sell 1/3 on the very sharp, short up moves — and buy back shares on very sharp, short down moves.

I sell long term shares for tax preference capital gains and add new shares on sharp breaks.

The next several years are going to be the most amazing times of our lives with few social institutions surviving as we have known them.

To this I say: “Bring it on!”

A bicycle is a good thing to own in the emerging America ….

Yes, alarmist, extreme, hysterical. But is it really? if someone had looked you in the eye last year and said that within a few short days we would watch the demise of Fannie/Freddie, Merrill Lynch, AIG, Lehman and, a few months earlier, Bear Stearn, and that many more pillars of American finance were at critical risk as well, you’d have thought it was impossible, extreme, hysterical, totally unthinkable. Welcome to the unthinkable. We’re there.

As I said recently, maybe it would be best for McCain to win. He and Palin deserve this shitstorm more than Obama. Of course, I do want Obama to win because we can’t turn this around under the McCain platform of yet more tax cuts for the super-rich and more wars. Obama can’t turn it around, either, but he can, god willing, help take us in a new and better direction.

It’s all right here, and it’s short and strong. The way the two men approach problems is literally day and night. The blogger, remember, is with Pajamas Media and was a strong Bush supporter.

While you are there, scroll down and read some of the posts. Professor Cole has a keen eye for political BS.

[Please note that Richard has not approved this blog entry.]

I’ve decided to re-write an earlier post to make my views clearer. Raj

It is clear from many reports that Obama has a massive amount of appeal the world over. This is partly because of the annoyance with Bush and therefore Republicans and partly because of how Obama comes across – young, handsome and eloquent. His race, as much as he doesn’t want it to be an election issue, stands out and reflects well on him.

However, as much as I enjoy reading election commentary from around the world, a recent piece in the Guardian was a bit too much for me. In 2004 a columnist with the Guardian urged readers to write to Americans and suggest they vote for John Kerry – which probably on average harmed, rather than helped, his chances. Recently an opinion piece on why Obama should win was published on the website.

And, most depressing, many African-Americans will decide that if even Barack Obama – with all his conspicuous gifts – could not win, then no black man can ever be elected president.

Yes, that would be depressing – because it would show that America still hasn’t moved on in terms of race. If African-Americans (what about West Indian-Americans – are they backing McCain?) are voting for Obama purely on race then that’s not hugely better in my view than voters voting for McCain because of Obama’s skin colour. But I’m not sure that they would despair that much. Obama has many talents, but he is also inexperienced – and running against possibly the worst opponent for him that the Republicans could have fielded. Although the age difference had the potential to lose McCain the election, if he could get over that Obama was always going to have a real fight.

It is my hope that if Obama loses, black Americans who were backing him will look with hope to the future rather than assume that was going to be the only chance of seeing a black US president. Freedland should have remained as optimistic, rather than make rather patronising comments that mocked the ability of the black voters to weather an Obama defeat.

But what of the rest of the world? This is the reaction I fear most. For Obama has stirred an excitement around the globe unmatched by any American politician in living memory. Polling in Germany, France, Britain and Russia shows that Obama would win by whopping majorities, with the pattern repeated in Africa, Asia, the Middle East and Latin America. If November 4 were a global ballot, Obama would win it handsomely. If the free world could choose its leader, it would be Barack Obama.

Thinking back to the last Democrat president, I seem to remember (perhaps wrongly) that during Clinton’s terms in office, the criticism of America was that it “didn’t do enough” – many countries seem to see-saw between wanting the US to make military interventions and not. Some are better than others, but I wonder whether this “pendulum” will continue to swing. In any case, as much as many people would like to see Obama US president, they have to respect the choice the American people make. As much as I wanted to see Gore and Kerry win in 2000 and 2004 respectively, when I heard that Bush had won I shrugged my shoulders and hoped for the best. It’s also fair to consider the situation reversed – I doubt Freedland would respond positively to calls from the foreign media for David Cameron to be the next British Prime Minister, though it’s probably inevitable.

But what does that say about today’s America, that the world’s esteem is now unwanted? If Americans reject Obama, they will be sending the clearest possible message to the rest of us – and, make no mistake, we shall hear it.

I don’t think at all that America would ignore the world to spite it. But just because the world backs someone doesn’t mean it is the best choice for America – that’s what US voters need to decide on. I remember some years ago that Chinese people desperately wanted to see the back of former Japanese Prime Minister Junichiro Koizumi – despite the fact that he had pushed a reform agenda that Japan desperately needed. Did they care about whether his successors would continue that process or send the country backwards? No. They were focused on one issue – whether the Japanese Prime Minister visited the Yasukuni Shrine or not.

Similarly, even though the world as a whole doesn’t wish a US president who will cause harm to his country, the desires of non-Americans are mostly focused on the next president “not going to war”. If they thought a monkey in a suit would do that better, they’d be “backing Bubbles”. From my POV what people like Freedland see in Obama is a mere shadow of his true qualities, taking a selfish, snobbish, self-righteous view that doesn’t do the man a shred of justice.

I can’t say that I would vote for Obama if I was American, but if he wins, I would give him the benefit of the doubt and hope for a good presidency – if he loses, I would like to see him stand again when the time is right. But for me, unlike people like Freedland, his race, youth and good features are irrelevant. It would be nice if the world could appreciate Obama for his policies rather than his image. Otherwise there will be an even greater disappointment if Obama wins and then does not turn out to be everything they thought he would be.

Traveling again, but this translation was too precious not to share.

This is yet another gross insult against China made by the international anti-China forces. They have health problems with food in other countries as well, so why can’t China also have them? Why are they only condemning China?

Will non-poisoned baby formula solve the health problem for babies? Adults who don’t drink milk powder also have kidney stones. Therefore, the western system of non-poisoned baby formula will not solve the problem of kidney stones.

Don’t forget that the baby formula industry has been in development overseas for almost a century whereas it has only been several decades for China. The baby formula industry in China has progressed continuously during this time. China cannot be expected to arrive at perfection immediately. Gradual steps are taken to reach the non-poisoned condition, as appropriate to the existing conditions in China.

It goes on and on, and gets funnier and funnier, in a very black way. The funny (sad) thing is, commenters like Hong Xing actually write that way, and mean every word.

One of my very favorite bloggers (and sorry for repeating that description every time I link to him), living up to his reputation for creative use of visuals, shows us the tragedy of September 11th for its victims outside of America. Good use of words as well:

Another 9/11 anniversary. Three thousand dead. A terrible tragedy. A horrific crime.

Five and a half years into the invasion and occupation of Iraq, a million dead, give or take a hundred thousand or so. So much destroyed, so many dead they have to be counted by survey like voters in an opinion poll. No exact number. No real list. No one can read out the name of every dead man, woman and child each year the anniversary comes around. The architects of this crime aren’t being hunted down – they were rewarded. Reelected.

A million dead: Three hundred and thirty three 9/11s. More than one a week, every week for five and a half years

Whatever you do, don’t miss the visual.

Raj

An interesting article from the Financial Times on the recent agreement by the Nuclear Suppliers Group to approve a waiver for India of a ban on exports of nuclear fuel and technology to India.

But the media celebrations had an ugly side – China-bashing. Perceptions that Beijing had tried to block the deal from behind the scenes sparked outrage among commentators, who suspected China was championing the interests of its ally and India’s nuclear-armed rival, Pakistan.

“It is in times of adversity that one learns who one’s friends are,” the Indian Express wrote in a piece lambasting China. The main business daily, The Economic Times, went further. “Slimy dragon wants deal for mother of proliferators,” it said, referring to perceptions that China might call for an NSG waiver for Pakistan as well….

As for China, Yang Jiechi, the foreign minister, declared his surprise at the accusations in the Indian media, saying Beijing played merely a “constructive” role in negotiations at the NSG.

I came across a number of articles emphasising different points, but what is clear that on Monday an editorial was run in the People’s Daily stating (according to AP) that:

the U.S.-India nuclear agreement posed a “major blow” to international nonproliferation.

“Whatever the future of the U.S.-India nuclear agreement, the multiple standard that the U.S. has on the issue of nonproliferation has caused doubts in the world,” it said.

This was then followed later on by comments from Foreign Ministry spokeswoman Jiang Yu, who said that “China hopes the NSG (the 45-nation Nuclear Suppliers Group) can find a way to strike a balance between nuclear nonproliferation and (the) peaceful use of energy” and that China’s role had merely been “constructive”.

The Financial Times article is certainly persuasive in that the Indian media should not be so reactionary, given that China is further ahead in diversifying its energy resources and thus should not be concerned whether India has better access to civilian nuclear technology. That said another article, albeit from an Indian news website, gave a detailed explanation of what it said happened during the negotiations. That asserts that China was trying to block/delay the deal indirectly, rather than stand out as being totally opposed to the deal in public. As none of the diplomatic sources are named, it’s impossible to verify.

The waiver has been widely criticised as essentially rewarding a country for not signing up to the Non-Proliferation Treaty, though I have a feeling that Congress will approve it. Any thoughts on whether it might actually block it?

But what is unfortunate is that there is so little good-will in India (at least in the media) over China’s involvement in the process. If China really was trying to sabotage it then it should think twice before doing the same thing over another process – changing its mind at the last minute will only annoy India further. It would be better if it was open about its opposition from the start. If Chinese concerns over the process were taken too swiftly as a sign of “meddling” then the Indian media could do well to accept Chinese opposition to India’s position can be rooted in good-sense rather than just a desire to hamstring its rival.

Or am I simply too optimistic to believe that China and India can reconcile in the near future as equal partners?