Real life doesn't like to be pushed, does it? Way back in 2003, US soldiers entered Bagdad and staged a photo opportunity in which they pulled down a statue of Saddam Hussein. This was intended to impress us as much as we were impressed in 1989 when Romanian protestors spontaneously pulled down a statue of President Ceaucescu. A few tugs on a few ropes, and Ceausescu collapsed in a gratifying pile of rubble. Great pictures. But Saddam had legs reinforced with steel, remember?
Long after the world's photojournalists had gone back to their requisitioned presidential palace to swap stories of the Romanian revolution, the military brought in the bulldozers and Saddam became a horizontal president. Finally, as darkness fell, they brought in the oxy-propane torches and the, ah, mission was, ah, accomplished. All that remained was for President Bush to go aboard the USS Abraham Lincoln and declare an end to hostilities. The Iraq War ended in May 2003.
Meanwhile, back here in our parallel universe where wars don't run to schedule, history hasn't ended and capitalism isn't triumphant, we're still trying to uncrunch credit. Even the most creatively deranged historian, fresh from penning some unlikely tract of alternative history in which, let's say, the US was defeated in Vietnam, the Soviet Union just collapsed all by itself and the dot-com boom somehow failed to rewrite the rules of accountancy - even such a historian might hesitate to invent the current jargon-fest.
We've had the Troubled Asset Relief Plan (buying rubbish),
quantitative easing (printing money), fiscal stimulus (spending
all those new banknotes even before the ink's dry), and now we've
got PPIP (never mind what it stands for), which is a stroke of
genius. Now that the world's governments have poured all their
banknotes (the term "assets" doesn't really fit here, does it,
even if you attach "troubled"?) into the black hole under the
banks, and the banks have reacted much as a shop-window dummy
would react to a defibrillator, PPIP proposes selling the whole
problem to the taxpayers. Give somebody a bonus for that one.
Maybe the solution here would be for President Obama to fly down onto an aircraft carrier and declare that the crisis has been solved. Granted, the Commander in Chief's honeymoon period seems to have been rather short, but he's still got the approval rating to pull it off, hasn't he? People would believe him? And he'd be telling the truth, wouldn't he? If enough "troubled assets" (no, the term doesn't sit well here, either, does it?) had been sold off to enough willing taxpayers, and if the plaque on his desk had been re-carved to read "The absence-of-buck stops over there" - he could truthfully say that the crisis had been SOLVED (Sold, Off-Loaded, Vanished, Even Dumped).
Hang on a minute - doesn't PPIP envisage giving those taxpayers the, er, money to buy those, er, assets? No? Are you sure? A little credit here, a little underwritten risk there, and sooner or later, aren't you really giving your customers the money to buy from you the not exactly asset-backed paper that started all this off in the first place? PPIP just doesn't do this plan justice - it's more of a quick-step, a kind of jive, a shimmy, a shake; get ready for the TBtbTAP! The Troubled Bucks to buy Troubled Assets Plan!
Ladies and gentlemen - don't panic. The music may have stopped suddenly and that may be a dolphin not an aerial pig drifting past the ballroom porthole of the USS Global Economy. But this is a world in which history can be made to repeat itself (albeit the second time with bulldozers) and wars can be ended by floating photo opportunities. We may have woken up from the dream in which all that paper represented value, but the world's governments are still holding summits, their joint communiques are still being signed predictably at the eleventh hour, and this is still A Time Of Hope (copyright B. Obama 2008).
Or is it? Surely this can't be the parallel universe in which car-makers and banks are still collapsing, troops are still in Iraq, and the only people creating any real value at all are hedge funds like Bluecrest Capital (page 36). I mean, just think how all those economic commentators would feel if - after all that hot air - they ended up having to thank the hedge funds for saving the world.