Gathering Storm

Excerpts from

It Isn't Over

By Alan Abelson

Barron's
October 20, 2008

There are, it has long been an article of faith, no atheists in foxholes. And now, thanks to the remarkable events of the past few weeks, one might confidently attest, there aren't any capitalists in them, either.
For when the going gets tough, the tough in commerce, industry and particularly finance get going - fast as their corporate jets will carry them to Washington, begging to be rescued.
Rescued from what? you might well ask. Why from their own folly, of course. Those stalwart stewards of the private sector have undergone a most extraordinary conversion, from the unshakable conviction that government is the problem to the wondrous epiphany that government is the solution.
Now, we don't want to get too picayune or prim. The guys and gals who run our great corporations have never been shy about hitting up the public purse for a little something, whether in the form of tax breaks or contracts or even subsidies. But this time is different (to use a phrase certain to evoke guffaws, but, just this once, happens to be true) in both scale and circumstances.
On the first score, in responding to pleas, particularly from banks and their kin, Uncle Sam is pulling out as many stops as he can. It's hard to get a decent handle on what this enormous effort adds up to since it seems to grow daily by leaps and bounds and because it has assumed so many different guises, from purchasing or guaranteeing billions worth of wasting assets to massive loans and outright investment. (Which makes you wonder whether the powers-that-be keep discovering new problems or they have only the foggiest notion of what they're doing.)
But the sum is incontestably staggering, likely approaching a couple of trillion dollars and counting. And if you toss in the capital transfusions that the French, Germans, Brits et al. are also pumping into the wobbly global financial system, the already burgeoning total swells to numbers not dreamed of in your worst nightmares, something like $3 trillion.
The hope obviously is that in the fullness of time (a nice precise span that ranges anywhere from a year to an eternity) when this still-gathering storm blows itself out, the bulk of that monetary lifeline will wind up back in the public coffers. Miracles do happen.
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Photo location: Trasimeno lake, Umbria, Italy. Please click on the picture to clearly see the seagull flying home.