This Bubble Is Made Of Greed And Real Estate And Can Blow Your Head Clean Off. So The Question You Have To Ask Yourself Is, “Do I Feel Lucky?” Well, Do Ya, Punk?

We are going to ignore fairy tales for the moment from all sides. Terry Gilliam’s “Brothers Grimm” disappointment comes to mind, despite the current fracas. The most charitable comment we can make is that it was no “Brazil”. Besides, HRC will be spending a whole hour Sunday facing down the “toughest interview on television” (which also happens to be Cheney’s favorite appearance, so there you go).

We thought tonight instead to muse again on the hoary historians’ question of “When did the British Empire really begin its decline?” (note “begin”). As usual, this is all pretext to make a short comment on a contemporary news item crossing the wires tonight. We still are mindful of J.R.R. Tolkein’s famous disclaimer in his later introductions that he detested allegory whenever he sensed it and LoTR is without it. We proceed in that spirit as well — and include analogy.

Regarding the British, a variety of explanations are offered in History 301 level undergraduate courses, as many know. One of the most common is that British decline never really actually happened. What occurred? Germany’s relative rise in the 1880s-1900s and the diffusion of the “Industrial Revolution” (especially in America). These are inevitable and natural events that changed the British power equation — more than a precipitous so-called British decline. Another school, most prominently led by Correlli Barnett, claims that British missteps in elite education post 1850 (the Oxbridge leadership elite emphasis on ‘liberal classical education’ versus German/American technical emphasis), social liberalism and a failure to understand the net benefits and drains of the Empire (such as India) led to a devastating series of progressively worse policies. The result? Total collapse in 1940. (This is the date when Churchill had to undergo in Barnett’s phrase ‘the audit of war’ and realize that Britain was bankrupt.)

What to make of America today? As mentioned, we do not intend an analogy, allegory or even direct comparison to the British case. One further disclaimer. It would be too dramatic (and cheap) to point to a single event today and bootstrap a grand historical arc such British declinism. That larger American story has been told by many since Paul Kennedy’s “Overstretch” declinism of the 1980s. Hoards of new acolytes came on board after 2001 — here and elsewhere.

Still, the more or less bankruptcy of Citicorp, Countrywide, Merrill Lynch and other core pillars of the American financial scene likely will merit more than a footnote in a future Shanghai lecture hall. Already, Americans sense the wind in the boughs; the unspoken sense of American insolvency drives much of Ron Paul’s improbable political surf ride. Even other traditional campaigns resonate on it, from Edwards across the board. No less a platform than the redoubtable “Economist” gloomily concedes “America’s Long Slog” regarding the current economy. From the larger historical vantage point of in Western financial history (the book to read is by Charles Kindleberger) and its direct correlation to world power status suggests that the “Economist” is looking at the trees and missing the forest.

Citigroup is putting the final touches to its second big capital-raising effort in as many months, seeking up to $14bn from Chinese, Kuwaiti and public market investors.

Under the proposal being discussed, the bulk of the money – roughly $9bn – would be most likely to come from China, people familiar with the negotiations say. The Kuwait Investment Authority would contribute about $1bn, while $2bn to $4bn would be raised through a public placement of shares.

The formula is still being adjusted and there could be last-minute changes, the people involved say. It is also possible other investors will participate.

The deal underscores the depth of the problems faced by banks that suffered heavy losses in the US subprime mortgage crisis. It would follow an injection of $7.5bn into Citigroup by the Abu Dhabi Investment Authority in late November . . . The deal highlights China’s growing importance as an exporter of capital. The Chinese government has emphasised a policy of investing abroad to keep the ample liquidity in China from feeding a bubble in shares and property.

“They want to recycle money as there is too much in China,” says Fred Hu, a China-based managing director at Goldman Sachs. “Because of capital controls, only the government can take the money and put it offshore.”

Still, since we are talking about the plutocratic masters of the universe, one can’t be too gloom and doom for long. “If you raise too much you can always give it back,” said one banker. Perhaps. We’ll defer to the Paul campaign to expound on the public financial disaster we have created.

In Japan, after their real estate boom collapse in 1990, it took almost 11 years even to begin recovery. They called the 1990s “The Lost Decade”. Whatever will the wags at Weekly Standard come up with today?


  1. Comment says

    Odd gaffe from Maddow tonight — she is speaking at 92stY and she seems to think it is a YMCA.

  2. says

    #19 — that is an interesting point about Glass Steagall. I just read the George Bush book (Decision Points) and he basically says the same thing.

  3. Comment says

    Lord Black might have been making a broader and deeper allusion – Ms. Obama Καλλίπυγος, as a sublime deception. Mansfield has probably written about this. Or maybe he was just having fun – JLO and Michelle Obama are very different looking – short v. tall, saucy v. studied primness, etc.

    Maybe JLO would have difficulty telling the difference between Condad and Henry Kissinger – She would just see them as two exotic white European males.

  4. Comment says

    We are watching Huckabee talking on c-span discussing his Keith Richards pardon. Rancid populism aside – Huckabee is awesome telling this story and his imitation of Keith Richards, while a bit off, is hilarious.

  5. Comment says

    Callipygous insights aside – Black, in his National Post column, is clearly showing some wear and tear with his likening of Michelle Obama to JLO. What would Naomi Klein make of such assism? Michelle and JLO – Very different – Very different. Black also asserts that McCain never speaks in cliche – Commment likes McCain as a personality. But his victory speech in NH was rougly 60 percent cliche. Also, we think Black’s failure to discuss Huckabee is indicative of something — we are note sure what it is indicative of, but …. Also , we disagree with what he says about Barack – but if you read closely, you’ll notice some escape hatch clauses. Once again – Black’s column is about Black – nevertheless, fun to read.

  6. A Random Quote says

    New Hampshire showed that the Emperor Punditry has no clothes, and is unattractive without them. In this, the debunked emperor is unlike, one dares respectfully to imagine, the comely Michelle Obama and Cindy McCain.

    With trepidation, but not embarrassment, I offer the thought that Mrs. Obama, a formerly disadvantaged alumna of Princeton and Harvard, to judge from her well-strategized appearances on national television in exiguous dresses and trousers, is as callipygian as Jennifer Lopez. (That is my only concession to political correctness for 2008; you look it up if you must.) I saw her on YouTube saying that, “Reform must be from the bottom up.” In her well-favoured case, this could be a double-entendre.

    ~Conrad Black (1/12/08)

  7. Comment says

    The sudden Republican love for France reminds us of Hamilton describing the caprice of Jefferson’s womanish love for France – It’s amazing to hear St. John and Commander Rudy express their fondness for France – Francophobia was once am all in one Rosetta stone – a total code word for post Reagan GOPism.
    But the turn around in feeling (sort of like Clinton and Scaife being friendly now) is due almost entirely to Sarko – a man who opposed, and still opposes the Iraq war.
    Francophobia, for a while, was the anti-semitism of the chucklehead faction of the GOP and their neocon fellow travelers. Their stated reasons for hating France were cover reasons – they actually hated France for her good qualities. That’s why Romney wanted to get out ahead and start attack France before others pointed out that he spent the Vietnam war living like a God in the south of France.

  8. A Random Quote says

    “The great oracular experts of the American media floundered like halibut.”
    ~Conrad Black (1/12/08)
    (On the NH Primary)

  9. says

    My bet for the beginning of British decline was the 1st of April, 1918.
    Yes, I mean the creation of the Royal Air Force…

  10. Dr.LeoStrauss says

    Agree Belgium and especially the Congo are better off with Belgium sans Congo, Nostromo or not. Paul is a fascinating phenomenon — when he speaks of strict constitutional construction, our sense is less than 10% of his audience groks the deal, but 100% get it that the Warlord has rendered us rudderless and subject to caudillo rule.

    The gold standard stuff is a shibboleth that opens doors in the some of the funkiest recesses of the Movement. Places where Kudlow is talking backwards and the dourmouse says “feed your head.” We long ago got used to ordering another round whenever Kemp got to that part at whatever fund raiser we couldn’t get out of at the time. Still, those guys seem to like it.

    re Romney, almost up there with Battlefield Earth. Sarkozy today would hold a state dinner in his honor for his accomplishments with Bain and the Salt Lake games. And perhaps throw in some after hours Parisienne divertisements in recognition of all his “good works”. It sure sounds better to the Stiftung than getting pounded (improbably but there you go) by a resurrected St. McCain, smacked down by more Chuck Norris Fists of Rage and perhaps a limping Rudy campaign. The indignity of it all . . .

  11. A Random Quote says

    But if there is one intriguing peculiarity in the enemies list compiled for the Romney campaign, it is the primacy given to France as the ultimate evil haunting America’s future … But why France? With an overwhelming majority of Americans now opposed to the Iraq war, does Romney believe that American voters still fall for the Bush-Cheney renaming of french fries? At a time when France is cooperating closely with the United States against jihadist networks, does Romney think he can best show himself ready to lead the free world by printing bumper stickers that say, “First, not France”?
    ~Boston Globe 2-28-07

  12. A Random Quote says

    re Straits of Hormuz

    “Dear Comrade, what does it matter who was responsible, my Field Marshall {Potemkin] or your historians? In either event, somebody was rudely deceived.”
    ~Lenin to Trotsky
    Pre-Revolutionary Correspondence

  13. A Random Quote says

    “Almost certainly we are moving into an age of totalitarian dictatorships—an age in which freedom of thought will be at first a deadly sin and later on a meaningless abstraction. The autonomous individual is going to be stamped out of existence. But this means that literature, in the form in which we know it, must suffer at least a temporary death. The literature of liberalism is coming to an end and the literature of totalitarianism has not yet appeared and is barely imaginable. As for the writer, he is sitting on a melting iceberg; he is merely an anachronism, a hangover from the bourgeois age, as surely doomed as the hippopotamus.”
    ~Orwell (1940)
    Inside the Whale

  14. Anon says

    Actually – we’ll dial back our concurrance with that HuffPo critique – While fair questions are raise – we really don’t know what happend. Maybe something happened. Who knows – This admin likes to make stuff up (Jessica/Tillman/Uranium) even when not necessary.

  15. Comment says

    Corrrection – whenever we hear of Ron Paul speak about economics, we reach for our list of Goering/Buchanan attributions.

  16. Comment says

    Recall when Citigroup was first created, it was illegal – Sandy Weil created Citigroup first – then asked Congress and the President to make the marriage legal by removing what remained of Glass Steagel. It was always impossible.

  17. Comment says

    Whenever we hear Ron Paul talk about economics or monetary policy, we reach for our, er, uh, water-pistol. He’s all wet, though he makes an occasional point.

    A while back we atteneded a debate btw some Economist writers v some from the Nation – We recall the topic was Wal-Mart and it was amusing to watch two sets of pundits pretend to care about working class people. But the Economist eventually spilled the beans and conceded that the globalisation they were advocating did not help ordinary folks in America, but that Americans should be more broadminded. Spoken like a true Englishman.

    We are decline doubters – London Real Estate is more expensive now than during Victoria’s reign. Belgium is better off with out the Congo.

  18. Commeng says

    re:” … footnote in a future Shanghai lecture hall …”

    Student: Professor, you reference Merrill Lynch. Can you …

    Professor: Ok – class, this student makes a point – Does anyone know about Merrill Lynch?

    Other student: Yeah – An old American bank – it blew up in Hong Kong back in the 90s. Or was it British.

    Professor = No, you’re thinking Barings – But the two are easily confused ..

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