Pilot Flies Blind

So the global financial crisis is global. That appears to be one unchanging conclusion in recent weeks. We have key organisations and figures hammering out a global solution over the last few days in Washington. The International Monetary Fund has met, and has denounced the G-7 proposal to the crisis as weak and ineffectual: essentially a statement of ideals rather than clear, pragmatic actions. The reason for the ineffectual outcome can be seen simply by looking at Europe’s collective response. In a nutshell countries have such diverse opinions and interests that genuine agreement can only be at the vague, fundamental level. Admittedly consistency at the most fundamental level - that of ideology - has been thrown out the window.

At least this is a better situation than in Zimbabwe. There, the two main political organisations finally agreed to specifics to move forward. The downfall came when President Mugabe blatantly ignored the agreement and went his own tyrannical way. If I wasn’t such a sceptic I would say that Robert Mugabe has taken some political lessons from the recently appointed Pakistan president - Asif Ali Zardari. Make a few deals and than double-cross your way to power!

With either mixed responses or vague principals at the collective level, something of importance is to look at key individual players in this game. So if there is a chief pilot, who would it be? Unfortunately the answer is the US Secretary Treasury Hank Paulson. I say this because the crisis comes from the US super-power. Also, the US president is too unpopular and distrusted to take the wheel.

So how is the chief pilot going? Firstly, for a week or so he faced everyone from the congress to the media waving a finger-pointing clenched fist and shouting We need this financial rescue package Now! So with built expectations on this immediacy, when he finally gets his way he says that it will take some weeks (and months) to work out the maths formula to spend the money to save the country and the world Now! I would say that the pilot crashed on that one.

Hank managed to survive this crash. What did he do next? Well he decided that in any case the great plan that he devised wasn’t such a good idea after all. Hmmm…after a great deal of ‘trust me I know what I am doing’ and $700 billion US dollars later, he decides to do what he said all along was a bad idea: take an equity stake in banks and other financial institutions by injecting capital. Well I don’t have a golden parachute, but from what I have seen, any parachute will be just fine.