Tales of two cities .. credit crunch, Greek fire, Iraq, Commonwealth, Stelco and US Steel

Aug 28th, 2007 | By | Category: Key Current Issues

“Before 1914,” the historian John Lukacs wrote in his provocative 1984 book Outgrowing Democracy: A History of the United States in the Twentieth Century, “the most renowned international currency was the British pound, and the financial capital city of the world was London; by 1918 the dollar replaced the pound, and New York, London.” Rumours that London is replacing New York again in the early 2000s have been around for a while. But they seem bolstered by the current credit crunch or “freeze-up in short-term lending … in the US and Europe.” Meanwhile, whether you believe in global warming or not, the charge that “terrorism” is behind the appalling forest fires in Greece is intriguing. Southeast of Greece, who knows what the US and UK are up to in Iraq now? The UK’s old “Commonwealth of Nations” probably does not have any big new role anywhere. But the UK itself is certainly changing. (And what does it mean that US Steel is buying Stelco, in Hamilton, Ontario, Canada?)

The credit crunch … and new foggy days in London town?

Since the so-called credit crunch is apparently at the bottom of so much else, that’s the place to begin the tales of two cities.

For the particular Canadian (or even just Toronto) twist on the subject, see “Debt market woes heighten fears for economy” (and the accompanying “Comments” too). Subsequent developments can be traced in (1) “Players agree to 60-day hold on commercial paper market” ; (2) “Two major mortgage bankers suspend sub-prime lending” ; (3) “Mortgage lender buying up portfolios” ; (4) “Credit-card defaults on rise in US” ; (5) “Burned investors should look in the mirror” ; and, finally (6 – a typically very good report from Business Week in the US) “Not So Smart … In an era of easy money, the pros forgot that the party can’t last forever.”

So … one TV commentator on the Business News Network in Canada suggested that all this just adds fuel to the already extant rumours about how London may or may not be replacing New York as today’s key global financial centre.

For some earlier 2007 background here see: (1) “London vs. New York smackdown – Which city is the real financial capital of the world? In one corner, the IPO champion and derivatives king. In the other, the investment-banking titleholder. The battle isn’t over – and new contenders are vying for a shot, says Fortune‘s Peter Gumbel” ; (2) “The Shifting Capital of Capital” – a Council on Foreign Relations Backgrounder ; (3) “Are We No Longer the World’s Financial Capital?” – from New York magazine ; and (4) “World’s 50 best financial cities, June 2007” (including some upbeat intelligence on Toronto, Montreal, and Vancouver, as well as London, New York, and so forth, on and on).

What does it all boil down to in the end?

The credit crunch may not be about to bring all global stock markets down in some definitive new Great Crash of 2007, but it clearly bears watching. As for London and New York, late 20th century globalization and an over-bureaucratized and too draconian US reaction to the 9/11 terrorist disaster apparently has shifted some financial muscle from New York back to the old metropolis of the empire on which the sun never set in London (because God did not trust the British in the dark etc). But, as the Hungarian-American historian John Lukacs might also like to remind us, the deepest story is probably that the old Anglo-American financial alliance in both London and New York is no longer covering the waterfront all by itself. If you really want to see the future, young man (or woman nowadays of course), go as far west as Hong Kong, etc.

Global warming and classical Greece …

Toronto blogger Steve McIntyre, in his late 50s, gets some credit for catching small mistakes in NASA climate change data for the USA, that certain usual suspects have been using as yet another excuse for not paying attention to the world-wide evidence on global warming.

Yet it isn’t all the scientific data that’s troubling most of us among the great unwashed. It’s this summer’s apparent frequency of such events as the recent Ohio flooding, to say nothing of the forest fires that may have threatened the global heritage of classical Greece.

Particularly intriguing is the August 27 announcement that a “Greek prosecutor today ordered an investigation into whether arson attacks, which have been blamed for the worst forest fires in decades, could be considered terrorist acts … Dimitris Papangelopoulos, who is responsible for prosecuting terrorism and organised crime, ordered the investigation to determine whether the crimes of arsonists and of arson attacks on forests carried out in the country during the summer of 2007′ could come under Greece’s anti-terrorism law.”

Which, whatever else, may also add weight to the argument that, at the very bottom of everything, terrorism is just a disaster, not an old-fashioned declaration of war. And if you really want to be smart and successful, you will fight it the way you fight a disaster (or ought to, at any rate, Brownie) – not the way you used to fight an old-fashioned war.

US and UK in Iraq today (and Afghanistan too) …

Whatever may be happening to the state and/or fate of the Anglo-American financial alliance, it seems that the Anglo-American military alliance currently mobilized most resolutely in the Iraq War (or disaster mitigation exercise?) is at the moment a bit confused.

According to Mitch Potter at the Europe Bureau of the Toronto Star, e.,g.: “Even as America surges, British forces have spent much of the summer quietly slipping away from Iraq, a process that is triggering a sharp deterioration in military relations between the two most important components in the unseating of Saddam Hussein … The gradual British drawdown – U.K. troops in Basra will soon be reduced to 5,000, from 7,000 at the start of the year – comes amid angry whispering from Washington insiders that London is setting itself up for a Saigon moment’ replete with ugly and embarrassing’ images of British defeat.”

At the same time, military officials from the two allied countries (to say nothing of Australia and Canada too?) still seem to agree about certain things. Rep. Jan Schakowsky, “the outspoken antiwar liberal” in the US was recently astonished to hear Gen. David H. Petraeus say “it could take another decade before real stability is at hand” in Iraq. As Rep. Schakowsky subsequently reported: “I come from an environment where people talk nine to 10 months … And there he was, talking nine to 10 years.”

Across the Atlantic, it has recently been reported that this past June UK General Sir Richard Dannatt warned of the dangers posed by a “strident Islamist shadow … in the context of conflicts in Iraq and Afghanistan” – and “ordered his senior staff to make preparations for a generation of conflict,’ in a speech that the Ministry of Defence tried to keep secret.” General Dannatt added that: “The challenge of this generation is as great as any that have gone before us.” And “if we fail in either campaign, then … then tomorrow will be a very uncertain place.” (Mmm … isn’t it that already, because of the “conflicts in Iraq and Afghanistan”?)

Changing scene in UK …

Three recent articles from the Guardian website suggest just how different the United Kingdom across the sea is today from what it may have seemed a generation or so ago – in some good ways, and in others that are clearly bad.

To start with there is the report that: “More than a quarter of babies born in Britain have at least one foreign-born parent, it emerged this week, up from just over a fifth in 2000. It is a striking statistic that in some quarters, predictably, provoked alarm.”

This alarm may be excessive. But: “there is no question that society is changing, argues Rick Muir … at the Institute of Public Policy Research. He suggests that instead of considering ourselves an old, long-established and relatively static place, Britons must recognise that global mobility has made the UK, like so many other places, a mutable, energetic, changeable place, like young Australia or frontier America … The challenge for policymakers, he says, is to encourage Britons to a more accurate understanding of their country. One thing the government has failed to do is to tell a story about the kind of society that we are today…which is one of multiple cultures and identities … Britain is now a place with diversity at its heart. With a few exceptions, it doesn’t necessarily think of itself in that way. But that is what we are.”

Then there’s the “apparently random shooting of 11-year-old Rhys Jones on a Liverpool street” on August 23, which “exposed a barely concealed culture of violent gangs glorying in crime … As residents of Croxteth Park, campaigners and politicians denounced the senseless murder of a shy, polite boy who lived for football, Gordon Brown described the killing as a heinous crime that shocked the whole of the country … The people responsible will be tracked down, arrested and punished’ … Rhys’s parents … made an emotional appeal for information about their son’s killer saying: We’ve lost our world and the world has lost a good guy.'”

Finally … on August 24 a “20-year-old woman who was severely beaten during an alleged mob attack died from her injuries … Sophie Lancaster was walking through the skating area of Stubbylee Park in Bacup, Lancashire, with her boyfriend Robert Maltby, 21, when they were attacked by a gang of youths in the early hours of August 11. The couple, whose injuries were so bad that police were initially unable to determine their sexes, were taken to Rochdale Infirmary … The families of Miss Lancaster and Mr Maltby have confirmed that the couple, who were goths, had encountered trouble before because of their black clothing and multiple piercings.”

All this suggests that the UK today really is not all that different from such places as the US or Australia – or of course Canada (though the present UK media often does seem to assume that it’s understood Canada is included, when you say the somewhat larger term “America” ; and, who knows, perhaps if you live anywhere in the old British Isles this even seems quite true).

Is the Commonwealth a new player too?

The Guardian has also recently hosted some intriguing comments from Christopher Harvie, a Scottish-born “professor of British and Irish studies at the University of Tbingen” in Swabia (in present-day southwestern Germany). The main idea is that: “In the current climate, the Commonwealth takes on a new, radical significance – and Scotland has a role to play in it.”

Professor Harvie goes on: “Once upon a time the market was supposed to do world relationships by itself but the credit crunch has shown just how opaque and downright fraudulent this claim was: all these computers and golden-handcuffed dealers have added up to pea-soup fog over international debt. Europe will sort itself out with the reform treaty, but it will be a Franco-German show. The politics of Dubya’s Washington is corrupt on a scale so massive that South America is now in near-open revolt, by now probably beyond the grip even of the CIA. This will rebound on us …

“We have lived in an American-determined world in which hyper-individuated goals, themselves unstable – own house, own car, holidays abroad – have contrasted with a collapsing public culture. This has probably been checked in old Europe,’ because of the formal cultural power of the states, and distinctive language-politics, but not in Britain. We seem only united in being the drink, drugs, debt, sex, obesity and obscenity champions of the continent …

“Given the present chaos in the international finance markets, the overdriven power-grab by the United States and its disastrous consequences, the Commonwealth takes on a new significance. It’s an Anglophone grouping, but not one based on the domination of Washington, Wall Street, Whitehall or the City of London. Its secularism makes it multiracial and multi-faith: offering the chance for real-time communications and local patriotisms to bridge the dangerous gulf between Ben Barber’s MacWorld and Jihad.’ Could it develop as a conduit between rich and poor nations, informed and critical forces in politics?”

Of course the simplest answer to these questions is almost certainly no – at least as things look up here, north of the Great Lakes in Canada.

But if you look as well at the current free introductory booklet Your World, Your Commonwealth, you will almost certainly get the impression that this absolutely last institutional vestige of the old British empire is also nowadays very, very different than it used to be. And who knows? That may say something about something good for the future, somehow … in some useful way?

No more national steel industry in Canada … does anyone care?

The news that US Steel is finally going to purchase the Hamilton-based Steel Company of Canada or Stelco – the last major Canadian-owned enterprise of its sort – prompted the CTV website to pose the poignant question “How do you feel about the last Canadian steel company falling into US hands?”

In the end some 32% of just under 9,000 respondents agreed “It’s just business,” while a robust 68% opted for “It’s a shame.” No one, however, just put their foot down, and firmly said it just cannot happen. And that’s not just because the CTV poll designers did not include that answer as an option.

There is no longer any serious Canadian national business class, of course, insofar as there ever was. But the story goes deeper than that. Stelco workers, like all other steel industry workers in Canada, have long belonged to the United Steel Workers (USW) – an old so-called “international” union with members in both the United States and Canada. The current president of the USW is the Canadian labour leader “Leo W. Gerard (b. 1947) … elected president of the United Steelworkers (USW) in 2001, becoming the second Canadian to head the union. He is also a vice president of the AFL-CIO.”

The first Canadian president of the USW was “Lynn Russell Williams (OC) Officer of the Order of Canada (born 1924),” who became “International President of the United Steelworkers (USW) from 1983 to 1994 … the first Canadian to lead the international trade union; headquarters in Pittsburgh PA.”

Then there’s the point that if you think there’s no more steel industry in Canada these days, there’s hardly any steel industry in North America at all these days either. So the US Steel deal will at least keep things locally owned in that somewhat broader respect.

In the very end, nowadays the future of Canada lies strictly in the hands of the Canadian people. And who would really want it to be anywhere else? Canadian governments no doubt ought not to be paying as much attention to business leaders as they still do. (Or in the case of the steel industry especially to union leaders either.) But no doubt such illogical old habits die hard. Meanwhile, those Canadian people so disposed can raise a glass to the Canadian workers at Stelco, in Hamilton (and Nanticoke), Ontario, on Labour Day (still spelled with a British North Anmerican “u”) , Monday, September 3, 2007. (Most of them apparently will still have their jobs after US Steel takes over, and that no doubt really is the main point now.)

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