Friday, October 31, 2008

Race: A Factor in the US Elections? *

In this most political of all seasons in Washington DC, it seemed appropriate, on Tuesday exactly a week before the presidential election, to take breakfast at the Cosmos Club. The local power elite has an obsession with English-style clubs and this venue is one of the grandest. Established in 1878, it boasts among its past and present members, three presidents, two vice presidents and 32 Nobel Prize winners. The Cosmos has been described as “the closest thing to a social headquarters for Washington’s intellectual leadership.”

My host, who sat across from me in the breakfast room of this rather splendid French Renaissance structure bracketed by imposing wisteria and magnolia trees, had served as a senior and respected member of both the Reagan and George H W Bush administrations. He epitomises the fast-disappearing segment of the East Coast Republican Party – which has about as much in common with the shrill divisiveness of Republican Vice Presidential candidate, Sarah Palin as, say, Terror Lekota enjoys with Julius Malema. Not surprisingly, he informed me that he will be casting his ballot next Tuesday for Barack Obama. “Actually”, he pronounced somewhat mournfully over a fine omlette, “I don’t know a single Republican of my stripe who is voting for McCain-Palin.”

Indeed, last Sunday one of the most distinguished members of the Republican foreign policy establishment had, with great public prominence, declared himself for Obama. Colin Powell proclaimed that the young Senator’s election, “will not only electrify our country. I think it will electrify the world.” Coming from George W Bush’s former Secretary of State, this amounted to an extraordinary apostasy. Even more so was his stated belief that Obama’s election would “fix the reputation that we have left with the rest of the world.” No doubt, in his high-mindedness, Powell believed that Obama’s election would redefine the American “brand” as less about Guantanamo and more about equality. However, in the somewhat jaundiced view of my breakfast companion, the brand Powell was most anxious to repair was his own. “He still has a lot of explaining to do about his role in cheerleading the invasion of Iraq at the United Nations – and he still has plenty of ambition left”, I was informed.

The desertion of McCain by some major mainstream Republicans mirrors his vertiginous descent in the polls which, with a week to go, show Obama enjoying a steady seven-point lead (which in American terms translates into a landslide). And if the polls are somewhat unreliable you simply have to follow the money. For those who wager cash on the election, the Intrade betting gives the Democrat a 87% prospect of success. On the subject of money, by some estimates, Senator Obama will have spent $250 million on local, cable and network television in just 5 months, a rate of advertising that, according to the New York Times outstrips Burger King, Apple and Gap on an annualised basis. And it dwarfs the previous record set for presidential campaigns, which was $188 million that President Bush spent in 2004. “Right now Obama is one of leading brands out there” said Evan Tracey, President of the Campaign Media Analysis Group.

While the city of Washington DC votes Democratic by almost as great a margin as Soweto votes for the ANC (or did so until the recent split), our TV stations here are flooded with campaign commercials. That is because they carry all the advertising from Northern Virginia, one of the most contested areas of all the battleground states in this election. On my unscientific survey, Obama’s adverts are flighted five-to-one over McCain’s. Obama now enjoys a double-digit lead in Virginia - once the most reliably Republican of all states, which last voted for a Democrat presidential candidate way back in 1964. Virginia, and the other states of the former confederacy, was the place where Richard Nixon perfected the winning Republican “Southern Strategy”, which was a formula which untethered anxious white voters from the historic allegiance to the Democratic Party by playing on (coded) racial anxieties. If the polls are to be believed, this strategy has now run its course.

The only lingering uncertainty, however, is whether indeed the racial identity of the lead candidate could tip the result. Professor Tom Schaller, a political scientist at the University of Maryland, put it crisply: “there aren’t any examples of a candidate coming back this late in the game with a deficit that big. The only potential straw for McCain to clutch on to is that the race is unprecedented in many respects and that the man in the lead is black”. Does racism still lurk in the polling stations of America? A survey completed last month by Stanford University, suggested that Obama’s support would be 6% higher if he were white. The Stanford political scientist who analysed that data, Paul Sniderman concluded, “There are a lot fewer bigots than there were 50 years ago, but that doesn’t mean that there are only a few bigots.”

The McCain campaign has studiously avoided any references to race at all, whether explicit or implicit. The Republican, to his credit, has ruled out using the incendiary and racist remarks of Obama’s former controvertial Pastor, the Reverend Jeremiah Wright. Equally, Obama has not, since his August Convention, referred to his exotic parentage. But there is much contention here about something called “the Bradley Effect”. This dates back to 1982 when some polls predicted erroneously that a black candidate, Tom Bradley, would win the Governorship of California. The conventional explanation given for the disparity between the polls and the result was that many white Californians were too embarrassed to acknowledge openly their own prejudice to the pollsters - but were less shy to do so when it came to marking their ballots. But its salience now seems massively reduced. The desire for change and the desperate need among voters for some form of economic salvation appears to trump other concerns. As one commentator languidly observed “there are not and have never been enough racists in 2008 to flip this election”.

Just how extraordinary the election of the first African American to the White House will be was captured in a comment relayed from East Africa by liberal commentator Nicholas Kristof. Noting that Obama’s father was of the Luo tribe, a minority which has suffered discrimination in both Kenya and Uganda, he reprinted a bitter joke circulating around Nairobi: A Luo has more chance of being elected president of the United States than of Kenya.

And it’s about to happen.

* Written for the Weekender newspaper in South Africa, publishing date 1 Nov. 2008

Jacob Zuma Visits the USA *

Last week a senior South African ANC politician managed to break through the media radar screens in Washington DC. Given the intense attention, and corresponding coverage which the US presidential election and the simultaneous and ongoing financial crisis enjoy, this was no mean feat.

Unfortunately, perhaps for him, his Party and the country, the politician in question was the Chairperson of Parliament’s Finance Committee the accident-prone Nhlanhla Nene. His fifteen seconds of infamy when he fell through the chair in the SABC TV studio ensured him primetime place on at least one cable TV news network – MSNBC (and more than 36 000 hits on YouTube, where viewers gave his performance a 5-star rating.) Jacob Zuma, who was in Washington last week, received far less coverage.

To be fair to the ANC President, his visit was designed to calm the waters – and uncertainties relating to his presumptive State Presidency – rather than to make waves. In this regard he went to considerable lengths before his major Washington audience at the Council on Foreign Relations to indicate that there would be “no change” of broad economic policy and political direction under his leadership.

He claimed, for example, that his allegiance – and indebtedness – to the forces on the ANC left, particularly the SA Communist Party and COSATU, was no greater or more significant than that of his two predecessors, Nelson Mandela and Thabo Mbeki. He also managed, or attempted, to pivot his leadership away from the flagship issues of AIDS and Zimbabwe which has made Mbeki, and through him South Africa, a figure of some notoriety and certain unpopularity in Washington. He dismissed the Mbeki-Manto Tshabalala-Msimang AIDS denialist regime as one characterised by their “personal opinions”, at variance with mainstream ANC policy, now being corrected. On our benighted northern neighbour, Zuma gave a tepid endorsement of “quiet diplomacy” but robustly denounced Robert Mugabe’s refusal to grant Morgan Tsvangirai a passport.

Zuma was, by all accounts, well received by the soon-to-exit Bush administration at the White House. But perhaps his visit there, meeting with Secretary of State Condoleezza Rice and even a quick grip-and-grin session with President George W Bush underlined the ambivalence of his reception. On the one hand, Zuma is, in effect, if not in formal office yet, the most powerful politician in South Africa. We are, beyond argument, the most important country in Africa. Even Bush’s detractors regard his Africa policy – particularly the PEPFAR AIDS-fighting fund and the Millennium Challenge Account as his “finest hour” (to quote no less an adversary than Democratic Vice Presidential nominee Joe Biden). Therefore, Zumas’ clout ensures him access. On the other hand, the notoriety which the unresolved criminal corruption charges have attached to his name ensured that the White House cancelled a photo opportunity of his visit.

Zuma was hardly evasive on his legal challenges. With a degree of mind-numbing detail which probably bewildered, in its labyrinthine complexity, the Washington grandees and old Africa hands listening to his address at the Council on Foreign Relations, Zuma painted himself as the innocent victim of a political conspiracy. And I suppose, if you are to press such a charge, Washington is the ideal place to do it. He described his case as “a very obvious political manipulation” and he had no qualms in fingering Mbeki, and former Director of the National Prosecuting Authority, Bulelani Ngcuka, and ex-Justice Minister Penuel Maduna as the guilty parties.

The complex detail which Zuma provided around his legal travails stood in sharp relief to his vague bromides around South Africa’s economic challenges and the massive downturn in overseas investor confidence towards our country and other developing economies. On the very day that Zuma was suggesting to his American audience that they should “invest more in South Africa”, the New York Times published a list of the currencies of emerging markets countries that have fallen against the US Dollar over the last three months. The South African Rand ranked second from the bottom of the world’s worst performers, beating only the Icelandic Krona (we dropped 31.38% compared to Iceland’s 31.78%). Unhappily, Iceland has declared national bankruptcy. Yet, the run on the Rand and the vertiginous decline in commodity prices – barely preoccupied Zuma. Or at least, his answers evinced little fresh or reassuring thinking on the subject. He simply repeated the mantra that “the ANC has good policies” and announced that even the President of the Party – or the country for that matter – was unable to change them.

I spoke to a key Wall Street investor (or more accurately, one of the few still left standing) who attended a smaller Zuma event at the Harvard Club in New York. He said the ANC President displayed more charm than substance and did not present a persuasive case for investment or, given the latest portfolio reversal out of the JSE, reinvestment. “On the other hand”, he said, “he was neither frightening nor arrogant.”

My impression of Zuma in Washington was similar. I was struck by how he reached out to me, seated in the audience, and described the government and South Africa’s parliamentary opposition, as partners in South Africa’s democracy, in a manner that Thabo Mbeki never countenanced. This strongly suggested, to an audience containing many Africa-sceptics, that our democratic gains are less reversible than the fluctuating fortunes of our currency.

* Written for the Independent Newspapers in South Africa - submitted 29 October 2008.

Friday, October 24, 2008

A Healthy Schism in South Africa*

In 1990, when Nelson Mandela was released after 27 years' imprisonment in South Africa, he noted in his first speech to a waiting world: "I am a loyal and disciplined member of the African National Congress. I am therefore in full agreement with all of its objectives, strategies and tactics." His iconic status helped sustain the ANC over the next decade and a half as it transformed itself from a liberation movement into an electorally unassailable democratic government.

That unity unraveled last week. In short order, the party membership of former national chairman Mosiuoa Lekota was suspended after he claimed that the ANC had moved away from its founding principles. Mbhazima Shilowa, the former premier of South Africa's wealthiest province, Gauteng, resigned from the party. Both said they would call a national convention early next month with a view toward forming a new opposition party. This dramatic rupture in South Africa's ruling behemoth, which won nearly 70 percent of the vote in the 2004 election and governs the country's nine provinces and all but one of its major cities, creates hope that my country's somewhat sclerotic political system will be rejuvenated.

The seeds of this discontent can be traced to December, when the arrogant Thabo Mbeki was ousted as party president by the populist but ethically challenged Jacob Zuma, and even earlier to Zuma's 2005 ouster as deputy president of South Africa after he was implicated in a corruption case. The democratic defenestration of the once all-powerful Mbeki and his ejection from the country's presidency last month have unleashed waves of disaffection that could lead to a reconfiguration of South Africa's largely one-party politics. Both Lekota and Shilowa are key Mbeki allies, and while Mbeki has not yet signaled his support for the incipient party, other ANC grandees who exited the government in solidarity with Mbeki may pitch their tents alongside them.

I was a close observer of the ANC in power, having led the largest opposition party, the Democratic Alliance, in parliamentary elections in 1999 and 2004. Despite my movement's strong anti-apartheid origins, pro-poor policies and liberal political program, the ANC branded us "the white party" in particular reference to my skin color. That did wonders for the Democratic Alliance in minority communities, but it excluded us from any meaningful share of the majority-black vote. Race mobilization helped the ANC secure its overwhelming majorities. By invoking ethnic solidarity and the struggle against apartheid, Mbeki kept restive and increasingly contradictory constituencies -- from black billionaires to rural peasants -- under one tent.

At least if a new party is formed, this "race card" will be ineffective against it. In addition to claiming credit for defeating apartheid, each party would attempt to outdo the other in loyalty to the "real core" of the ANC. Unlike previous schisms in the ANC's nearly 100-year history, this split is neither purely ideological nor tribal. Shilowa, for example, has strayed far from his trade union roots, and he and his powerful wife have amassed a fortune under government-directed "black empowerment" deals. Zuma and those who remain in the ANC government are surrounded by rich businessmen, including former politicians such as Tokyo Sexwale and Cyril Ramaphosa, who both ran afoul of Mbeki. And with the ethnic factor largely absent, both sides will have support across tribal lines. More worrisome is the attitude of some activists and dissidents. Some of Zuma's supporters, especially his allies in the ANC Youth League, have announced that they would "kill for Zuma." The ANC secretary general, Gwede Mantashe, has described members of the judiciary as "counter-revolutionary." Others feel humiliated by the brutal ousting of Mbeki and his supporters and resent their exclusion from power.

It is good that they wish to regain influence via the polls. But South African soil has remained stony to newcomers to the opposition. Still, this could be the country's most significant post-apartheid political division and could make the outcome of April's election less predictable. In some combination or coalition, the old and new opposition forces could easily win control of the three most significant provinces: Gauteng, KwaZulu-Natal and the Western Cape. Significant growth in the number of opposition members of parliament is also likely. The ANC's overwhelming majority in South Africa's past three elections has allowed it to retain the trappings of multiparty democracy while depriving parliament of any meaningful role. In many respects, South Africa has begun to resemble a one-party state where major decisions are made by the party executive, not the national assembly. A larger and more racially diverse combination of opposition forces could significantly help to restore meaning and content to South Africa's vital but somewhat hobbled democracy.

*Published 23 October 2008 in the Washington Post

Thursday, October 16, 2008

A view from Washington DC - Financial meltdown

Tuesday’s lunch with an old friend (of South Africa’s and mine), Walter Kannsteiner, former US Assistant Secretary of State for African Affairs, yielded a useful insider insight. Walter observed that Washington DC is “the only city in America where entrée to power is more important than access to money”.

Ironically, a stone’s throw away from our downtown restaurant a drama was underway that very afternoon, which saw the fusion of power and money in a scene unwitnessed here since the Great Depression. The CEO’s of the nine largest banks were in conclave in the marbled conference room of the Treasury Department. They were presented with a one-page document by Treasury Secretary Hank Paulson that said they agreed to sell shares in their banks to the Federal Government. According to the New York Times, Paulson told them they had to sign it before they left. They duly obliged. This part nationalization of the American banking system was seen by a clearly reluctant Paulson as the only key to unlocking what had become a global financial crisis headquartered in, but by no means confined to, America. His $250 billion bank recapitalisation scheme clearly stuck in his Republican craw. As he justified it afterward: “Government owning a stake at any private US company is objectionable to most Americans, me included. Yet, the alternative of leaving businesses and consumers without access to financing is totally unacceptable.”

What Paulson failed to disclose was how strenuously he had initially opposed the very step the markets forced him to take. Because by Friday of the preceding week ,the Dow industrial average had recorded its worst decline in a week, percentage wise, in its 112 year history. On that day alone, it lurched on a rollercoaster ride of more than a thousand points. Since J M Keynes has now elbowed out Milton Friedman as the reigning intellectual prophet here, Paulson no doubt decided that Keynesian adage: “when the facts change I change my mind” was the best philosophical straw to grasp.

Whatever the explanation for the turnaround, anticipation of the step had, by Monday, seen the Dow rebound by an extraordinary 936 points (11%), the largest single day-gain since, you guessed it, the Great Depression.

The one person, however, who was having no positive effect on market sentiment (and even less bounce, except of the dead-cat sort, on the fortunes of his fast-fading presidential standard bearer John McCain) was President Bush. Somewhat gleefully, Dana Milbank wrote in the Washington Post that “for the twentieth time in recent days Bush tried to calm the markets. The previous nineteen times the markets ignored him and continued their downward plunge, and this time would be no different.” The columnist was referring to Bush’s Rose Garden speech last Friday when the President said “the American people can be confident on our economic future”. A few minutes later, 300 points were shaved off the Dow.

Given the distrust, and ineffectiveness of the political classes around here, it seemed a better bet to soak some wisdom from the intellectual sponge of the globalization guru, Thomas L. Friedman (author of the award-winning “The World is Flat”). I went to hear him speak at the Washington launch of his new work, “Hot, Flat and Crowded”, a critical look at the unsustainability of a rising world population coupled with global energy demands and the destruction of our biodiversity.

But Freidman wasn’t simply interesting on the convergence of global warming, global flattening and global crowding. He was also apt on the current financial crisis. As he put it, “in some ways we‘ve become a subprime nation that thinks it can just borrow its way to prosperity – putting nothing down and making no payments for two years. Subprime lenders told us we could have the American dream – a home of our own – without the discipline or sacrifice that home-ownership requires”. A welter of evidence supports his thesis: Since the 1980s, Americans have consumed more than they produced but made up the difference by borrowing. (South Africans, incidentally, do precisely the same – only in America, like the food, it’s all super-sized).

Two decades of easy money and innovative financial products (including the dark and unfathomable ones like the derivatives that caused all the trouble) has seen household debt balloon in this country from $680 billion in 1974 to $14 trillion today. And the government has mirrored (or led) the consumer trend by ringing up a budget deficit of $454 billion in the current financial year. Freidman noted that the worst message Bush sent out after 9/11 was to tell Americans, immediately after that disaster, to “go shopping”. A nation addicted to consumption, not saving, hardly needed any presidential encouragement.

Instead of retail therapy, a much better strategy, he suggests, would have been to promote investment in energy efficiency, cut America’s dependence on energy-guzzling fossil fuels and the “petro- dictatorships” on which American oil imports depend.

Understandably, various American doomsayers have triumphalised about “a shattering moment of America’s fall from power”, to quote the Guardian of London. But its ideological opposite, the Wall Street Journal, suggests that despite current travails, America will remain a superpower. Two figures were striking in their analysis: its staggeringly large bailout of nearly a trillion dollars constitutes only 5% of U.S. Gross Domestic Product (whereas Britain’s slightly more expensive version amounts to a whopping 30% of its GDP). And last week’s historic plunge in the Dow still meant that the U.S. bourse outperformed nearly every single major stock exchange throughout the world, from Germany to China.

As the old Nedbank advert used to say, “It makes you think, doesn’t it?”

Saturday, October 11, 2008

Home Thoughts From Abroad: The US Election and Africa

The American financial meltdown is upmost in the minds of both US Presidential candidates and voters. It seemed unlikely, therefore, that the continent of Africa would be more than a minor footnote, and certainly provide no sound bite, as the campaign enters its final month.
Yet, in last Tuesday’s second presidential debate, both Senators Barack Obama and John McCain used several bloody and conflictual examples from the oft-forgotten continent to illustrate the reach and purpose of their foreign policy doctrines.
In suitably vague terms, Obama proclaimed that standing “idly by” in Ruanda “diminishes us”. He announced that the genocide in Darfur can only be curtailed by an American-led effort to bolster the UN- African Union Peace Keeping Force there. McCain offered similar boilerplate assurances on preventing genocide, but pointed to the “limits of our capability”. He cited the infamous, “humiliating” Somalian intervention as a cautionary case of reach exceeding grasp. McCain went much further in Foreign Affairs (December 2007) by naming Africa as the most compelling case for humanitarian intervention and promised to use “all elements” of US power to halt the outrages in Darfur.
But Africa’s two minutes of presidential primetime raises prospects about the continent’s relationship with the next occupant of the White House.
President George W Bush’s policies and programs in Africa have provided him with rare approval from his domestic opponents. His $15 billion AIDS-fighting PREPFAR initiative has provided 1.7 million Africans with anti-retrovirals and has converted the disease, for them at least, from a death into a life sentence. Senator Joe Biden proclaimed it as one of Bush’s “finest hours”. The substantial enhancement by the Republicans of the Clinton administration’s Africa Growth and Opportunity Act (AGOA) and the generosity, and crucially the conditionality, of the Millennium Challenge Account (MCA) has been described as one of his most important foreign policy innovations. Both Obama and McCain are enthusiastic supporters of the MCA. Obama initially announced he would fund it more generously but has now pulled back that pledge in view of the deteriorating fiscal picture in the US. McCain would enhance it in a different, and arguably more durable, direction: by abolishing wasteful agricultural subsidies for US farmers which so tamp down African agricultural exports.
While the Bush administration acted decisively and swiftly against Kenyan President Mwai Kibaki’s electoral theft last December, its attempts to restore democracy in Zimbabwe have been uneven and feeble. By appointing then regnant, now vanquished, but at all times pro-Mugabe, Thabo Mbeki as his “point man” in Harare, Bush effectively handed the issue over to South Africa to resolve (or not, as the current stalemate suggests).
Too often the Bush focus on “the war against terror”, allowed rights’ delinquent regimes such as Ethiopia’s to escape the democratic-deepening requirements of the MCA. Meanwhile the multiple conflicts and violent anarchy in the strategically significant Horn of Africa remain unaddressed.
Bush’s engagement with Africa has not always been reciprocated. The recent establishment of the stand-alone Africom (US Military Command for Africa) has generally been coolly, even suspiciously, received on the continent. The pre-emptive unilateralism of the Bush doctrine has given forward cover to the anti-American chorus which has escalated in volume over the past five years.
Africa will remain in the frame of the next President because of the other major driver of US policy, aside from the war against terror, namely America’s energy needs: by 2015 it is estimated that no less than 25% of US oil imports will come from Africa, up from 15% in 2007.
Obama’s campaign advisor on Africa, Witney W Schneidman recently suggested that his perspective is informed by the fact that “he is the product of the African Diaspora, the son of a Kenyan father, whose grandmother still lives in Kenya”. This unusual provenance has suggested to some, in my country at least, that Obama will be a “soft touch” when it comes to Africa. In fact, a close analysis of his record indicates otherwise: during his 2006 visit to Africa, he forthrightly attacked the disastrous AIDS-denialism of South Africa’s then Health Minister. In Kenya he railed against “the lack of basic rule of law and accountability” in many predatory African states. While Obama has scaled back his promise of doubling US foreign aid he has not adjusted his requirement of conditionality: it is helpful that Obama has coupled US aid with “an insistent call for reform, to combat the corruption that rots societies and governments from within”. Citizens of the world’s poorest continent, governed by some of the world’s richest leaders, can only say “amen” to that.
Obama’s initiatives in the Senate such as his 2005 amendment which helped bring Liberian tyrant Charles Taylor to international justice, suggests that Obama might become impatient with the “big man solidarity” which the African Union invokes repeatedly to shield dictators from justice and accountability, most recently, in the case of Omar Al-Bashir of Sudan.
Obama proposes to renew and restore America’s somewhat tattered international partnerships. However, in dealing with Africa and the world, he will soon enough confront the limits imposed on United Nation’s action imposed by Russia and China who had vetoed decisive action from Burma to Zimbabwe.
McCain has elaborated little in the campaign on his grandiose project of creating “the league of democracies”, to act “where the United Nations fails”. He clearly envisages such a body to overcome the shield for tyranny which the Russia-China vetoes provide. However, there is no appetite in Pretoria and in other African emerging democracies for such a league.
Whoever wins in November, Africa’s worst problems, from AIDS to Zimbabwe and its best prospects, from deepening democracy to spreading economic opportunity, require a continued engagement and partnership with the United States.

Thursday, October 9, 2008

Letter from Washington - First Week Here as a Visiting Fellow, Cato Institute

Five days is a lifetime in Washington DC, a city that is as much a metaphor as it is the capital of the world’s only, but fast declining, hyper-power.

I had barely shaken the jetlag out of my eyes last Thursday night, when I forced myself to stay awake for the much-hyped debate between the nation’s two Vice Presidential candidates. The expectations were both huge and diminished: would Republican Governor Sarah Palin manage to stutter out a few comprehensible sentences? Would she fall off the stage? In the event, the nation’s now most famous “hockey mom” managed a performance, which exceeded the expectations of this Samuel Johnson sort (“She does it exceedingly badly, but the wonder is that she does it at all”).

Palin’s shtick was a bazooka assault on the city which is to be my home for the next three months. She vowed throughout the debate insistently to “change”, “clean up”, “fix”, “reform” and “shake everything up” in Washington.

The following evening I attended a swanky party in the toniest DC neighbourhood. Our hostess, Katharine Weymouth, is both the granddaughter of Washington grandee, the late Katharine Graham, and currently publisher of the Washington Post – which happens to be the family newspaper and one of the very elite symbols that Palin so disparages.

My interest in the event is both political and anthropological: the party is the launch event of a searing book on the dark but hugely consequential vice presidency of Dick Cheney (“The Angler: The Cheney Vice Presidency” by Barton Gellman). Having had a dozen or more book launches of my own recently in South Africa, I can only commend Mrs. Graham-Weymouth’s event: the Chardonnay was superior and the canapés spectacular – no doubt confirming every prejudice of Governor Palin and her constituency. Although I couldn’t sight a single Republican at the party, most of the marquee democrats were strangely subdued despite the extraordinary news just in that Senator John McCain had pulled out of campaigning in the State of Michigan which he had previously described as a “must-win”. The cause of the sombre tones was Congress’s decision to eventually nod through the $700 billion rescue plan. Few thought that despite its size it would soothe the global financial system and provide the “stick of dynamite” which Treasury Secretary Hank Paulson claimed would unfreeze the stuck credit markets. As it happened, the sceptics were proved right by Monday morning: the credit contagion continued to rage like wild fire and on Wall Street the Dow dropped a frightening 800 points, while stock prices collapsed around the world.

Sometime Democratic Presidential candidate (back in 1992) and Bill Clinton’s Interior Secretary, Bruce Babbit advised me that the only thing which could save McCain at this late stage was “a Hail Mary pass”. I could not confess to this suave Washington fixture that I was utterly ignorant of American football argot, but on subsequent inquiry I discovered that the term relates to a forward pass made in utter desperation, with only a small chance of success, at the end of a game.

The very next day Sarah Palin threw such a long shot at Barack Obama by reminding a fired-up audience in Florida of his links to William “Bill” Ayers, a founder of the 1960’s radical terrorist group “The Weatherman Underground”. In Palin’s folksy vitriol this amounted to the Democratic frontrunner “palling around with terrorists”.

But this is one “Hail Mary” that doesn’t seem to connect. Because while the Republicans are desperate to change the subject from the economy (which the voting public holds them, and especially the toxic presidency of George W. Bush responsible for) most American voters cite the collapse of Wall Street, and the collateral damage to main street America as the seminal issue. Indeed, this is arguably the biggest economic event in world history for the past eighty years. Just put this crisis in perspective: Americans (who largely acquire stocks and shares for the purpose of retirement) have lost a combined $1 trillion dollars in net worth in just the last four weeks. More than one million people have lost their homes in the last two years and one million more are expected to lose their homes in the next year or so. All this makes it a hard, if not impossible, sale for the Republican belief in deregulation, unfettered free markets and its associations with some of the “villains” of Wall Street.

So is the race for the American presidency over? Based on the polls it would appear as though McCain’s candidacy is “as much a casualty of Wall Street as Lehman or Merrill” to quote democrat strategist Howard Wolfson. And while McCain’s campaign has come back from the dead more than once before in this electoral season, his appearance in Tuesday night Presidential debate with Barack Obama was certainly no game changer. Sadly, he almost looked half-dead: waxen and wooden, desperately trying to churn out some lines stuffed into his head by his campaign operatives including the, extraordinary suggestion (from a Republican, at least) that his administration would buy up all the bad home loans in America and renegotiate mortgage repayments.
Ronald Reagan must have spun in his grave.

In fact, some of McCain’s solutions were more substantive than Obama’s light fare. But the Democrat projected a fluency and ease which cast him, ironically, as the more seasoned and reliable hand on the tiller. Given the perfect economic storm now raging, such reassuring poise is probably the game winner.