To join the dots from the start: this blog goes from the USA today, back to Lincoln, to Obama, to
the financial crisis, to China, and back to the USA.  It places current discussions in America, and the 
choices facing whoever is the new President, in the context of globalisation, and reminds us
of the importance of, as ever, 'following the money' ...

Back to the future
Abraham Lincoln once said:  

"These capitalists generally act harmoniously and in concert to fleece the people, and now that they have got 
into a quarrel with themselves, we are called upon to appropriate the people's money to settle the quarrel."   

Abraham Lincoln, Speech to Illinois legislature, Jan. 1837.  
(Vol. 1, p. 24 of Lincoln's Complete Works, ed. by Nicolay and Hay, 1905)

Lincoln is also reported to have said, with Illuminatis like powers of prophecy:

"I see in the near future a crisis approach that unnerves me and causes me to tremble for the safety of my 
country .. corporations have been enthroned and an era of corruption in high places will follow, and the money 
power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all
wealth is aggregated in a few hands and the Republic is destroyed".

President Abraham Lincolnm 21 November 1864 (Letter to Col. William F. Elkins)
Reference:  the Lincoln Encyclopedia, Archer H Shaw (Macmillan, 1950, NY)

'We live in a time when our destinies are shared'
Fast forward to a powerful speech just made by Barack Obama:

Let me be clear: it’s outrageous that we find ourselves in a position where taxpayers must bear the burden
for the greed and irresponsibility of Wall Street and Washington. But we also know that a failure to act would 
have grave consequences for the jobs, and savings, and retirement of the American people.
 
Over the last few days, I’ve been in close contact with Secretary Paulson and leaders in Congress. I’ve also
had the opportunity to speak directly to the American people about what we need to do moving forward. I’ve 
laid out several clear principles that I believe must be a part of our response to this crisis.
 
First, we need to set up an independent board, selected by Democrats and Republicans, to provide oversight 
and accountability for how and where this money is spent at every step of the way.
 
Second, if American taxpayers finance this solution, they should be treated like investors.  That means 
Wall Street and Washington should give every penny of taxpayers’ money back once this economy recovers. 
 
Third, we cannot and will not simply bailout Wall Street without helping the millions of innocent homeowners who
are struggling to stay in their homes.  They deserve a plan too.
 
Finally – and this is important – the American people should not be spending one dime to reward the same 
Wall Street CEOs whose greed and irresponsibility got us into this mess. 
Whilst some allowance has to be made for the positioning and rhetoric of a US Presidential election campaign,
there is no doubt about the scale, seriousness and complexity of the issues being discussed.  And, above all,
of the importance of leadership: doing the wrong thing could have damaging consequences, doing nothing will
surely have disastrous results, with compounding impacts.

Obama goes onto set this in the context of globalisation, and of the common challenges we face:

We live in a time when our destinies are shared. The world is more intertwined than at any time in human history.
Walls that divided old enemies have come down. Markets have opened. The spread of information and 
technology has reduced barriers to opportunity and prosperity, and opened doors to new competition and risk. 
We have heard this time and again since the end of the Cold War. And over the last few weeks, this truth has 
been reinforced anew.
In America, we have seen that there is no dividing line between the ability of folks to live their dreams on 
Main Street, and the bottom line of investment banks on Wall Street. There is a lesson that cuts across 
this economic crisis. Prosperity cannot be sustained if it shuts people out. Growth cannot just come from 
the top down – it must come from the bottom up, with new jobs that pay good wages, and new innovation 
that creates opportunity across the globe.
And in the 21st century, we must also recognize that it’s not just prosperity that comes from the bottom up. 
 
Climate change. Poverty. Extremism. Disease. These problems offend our common humanity. They also 
threaten our common security. You know this. The question is what we do about it. We’re not going to face 
these threats of the future by grasping at the ideas of the past.

Follow the money
Paul Mason of the BBC's Newsnight offers some powerful thoughts in his most recent blog.  He quotes from a
Merril Lynch document summarising an IMF analysis of the current crisis.In summary:-
 
"Net fiscal costs from banking crises are substantial, averaging 13.3% of GDP. The government is highly 
unlikely to make a profit on any program; the average recovery rate is just 18% of gross fiscal costs"

Translation: Dear Mr Obama, forget your plans for healthcare. Dear Mr McCain, who is gonna pay for more 
surges? 
Nearly half of outstanding Treasurys are held by foreigners and 90% of foreign inflows into 
agency debt has been from foreign official institutions." 
Translation: Dear Messrs Obama & McCain, please contact a Mr Hu Jin Tao as soon as possible. 
"The recapitalisation process is best served by also drawing capital from surplus nations abroad; this would require, however, 
that the US allows to some degree loss of management control. This has been the case with private capital 
inflows, but would be best extended to sovereign wealth funds."
Translation: America's banking sector has to be owned either by the state, or by somebody else's state: 
Dubai, China take your pick. This is true whatever comes out of the $700bn deal



 
 What all of this underlines is the extraordinary interdependence of global capitalism, and that even if
the $700bnpackage is put in place, it won't be the end of the story - the best we can hope for perhaps,
is that it is the beginning of the end.
 
When Lincoln once said that "a house divided against itself cannot stand" he perhaps did 
not have the whole world in his mind - but he might as well have done.