Monthly Archive for October, 2008

America learns to love the United Nations

The US. Getting stuck in.

The US. Getting stuck in.

Richard Holbrooke, the architect of the 1995 Dayton Accords that ended the war in ex-Yugoslavia and President Bill Clinton’s former ambassador to the UN, is now going around preaching the virtues of the International Criminal Court (ICC), although it was the Clinton administration that did not have the guts to push the ratification of US membership through Congress. Holbrooke is also criticising the UN Security Council for not following up on its vote in 2005 to refer the conflict in the Sudan to the ICC, arguing that it was only the threat of a war crimes court that brought the protagonists of the Yugoslavia wars to the negotiating table, and that the same stick is necessary over Sudan.

The announced prosecution by the ICC of the Sudanese leader, Omar al-Bashir, has coincided with a major shift in American elite opinion about the usefulness of the ICC. Democratic foreign policy experts are talking as if the US were already a signed up, ratified, member. But more interesting is the stance of the Bush administration. In the first days of his presidency, George W Bush “unsigned” the US membership. Yet now it is pushing hard in the Security Council for the ICC to act faster over the Sudan prosecution. This turnaround suggests it may not be too long before the US formally endorses the court……

Continue reading ‘America learns to love the United Nations’

Obama’s West Wing takes shape

Josh, meet Rahm

Josh, meet Rahm

Imagine The West Wing was remade for the Obama era. Who would the main characters be based on? Leo McGarry, it seems, would be Congressman Rahm Emanuel, a politician and former political fixer pegged to be Obama’s Chief of Staff.

Emanuel is interesting for a couple of reasons. First, he comes from one of those accomplished families - like the Powells in the UK - whose every sibling seems off-puttingly gifted. Emanuel’s brother, Ari, is a famous LA talent agent, and the inspiration behind a character, also called Ari, on the HBO series Entourage. His other brother, Ezekiel, is merely a “noted oncologist and bioethicist.” Rham used to be an advisor to Clinton, before more recently being elected as a Congressman in Obama’s home start of Illinois. Once there, he played a leading role in the 2006 Democrat take-over of Congress, and wrote a fairly interesting book called The Plan, laying out a new policy direction for the party. (A pretty blatant British rip-off, also called The Plan and also featuring a scaffolding cover motif, will be reviewed in next month’s Prospect by Peter Oborne.) But most, pertinent to the discussion of Emanuel’s playing Leo in a remake of the West Wing, is the fact that he was also the inspiration for the character of Josh Lyman in the original series.

Such Rahm-related gossip about plum jobs in an Obama administration will continue in coming weeks. The New Republic’s Jonathan Cohn recently did  an excellent overview of his most prominent wonks, and even included a handy map of their relationships. And not to be outdone, Prospect’s own DC insider - known as “Tumbler”, after President Bush’s secret service handle - speculated in the current edition about who might get what……

Continue reading ‘Obama’s West Wing takes shape’

Ahead of his time?

Interesting to note that 70 years ago today, someone far more talented than either Brand or the eminently punchable Ross was busy creating a storm that literally had people taking to the streets with guns in their hands. Orson Welles always claimed that his news bulletin-style radio version of War of the Worlds—complete with shrieking eye-witness reports of death-ray slaughter—was an innocent Halloween entertainment, feigning bewilderment at the mayhem he had caused. The resulting publicity made his name and he probably knew exactly what he was doing. We are used to the media’s blurring of fact and fabrication, but in 1938 that was unheard of. Welles, only 23 at the time but a veteran of experimental drama as well as self-promotion, understood the power of the media and grasped the opportunity with both hands.

Many years later he compared his fate with that of an Ecuadorian broadcaster who copied the idea and wound up in prison as a result, “I didn’t go to jail; I went to Hollywood.”

Peter Bazalgette on Brand-gate

Baz, on Brand

Baz, on Brand

In addition to the notoriety gained for his controversial Prospect television collumn, Peter Bazalgette does a sideline in scandalising Britain, developing reality TV programmes like Celebrity Big Brother. We asked Peter - or Baz, as he prefers it - to reflect on the current hoo-ha over Russel Brand. Here is his response.

“Was the prank call perpetrated on the national treasure, Andrew Sachs, really important enough to lead all the national news bulletins all day yesterday ? Did we just want some relief from the financial panic or have we all gone bonkers ? It’s Interesting. Most Radio One fans have expressed support for the show. Radio 2 listeners - more the Daily Mail generation, perhaps -have been hostile. There’s unsurprisingly an age divide when it comes to taste and decency. Of course the item overstepped the mark. But both Ross and Brand are paid quite a lot of money to be risque.  Their producers are there to  protect them from their show becoming a complete debacle. So, in addition to Brand (who resigned yesterday), there are few prizes for guessing  who else Mark Thompson will eventually sack. But beyond the resignations, its the anatomy of this media fuss that is truly interesting….

Continue reading ‘Peter Bazalgette on Brand-gate’

Hedge fund managers: a non-apology

Hedge funds say sorry

Hedge funds say sorry. Sort of.

One of the most arduous tasks a hedge fund manager must perform in these troubled times is to write the periodic letter he sends to investors updating them on the performance of the fund. If things have gone awry, should he manfully take the rap - or should he (Russell Brand-like) evade the blame? Prospect has got hold of one such letter that gives an answer.

In the good times, of course, these documents were lengthy bragathons. In them, the manager usually sought to play down the impact of (generally favourable) market conditions and to play up his own unusual investment genius (known in the trade as his alpha). It was after all these market-beating skills that allowed him to draw substantial fees from the fund.

This style has mutated as the downturn has worsened. Now the market, rarely mentioned on the way up, has emerged as a significant influence on investment performance—as a recent gem of a letter from Toscafund shows. This is a London-based hedge fund, set up by a former banking analyst called Martin Hughes, which has been badly caught up in the downturn by its predilection for investing in banks, fund management companies and house builders, none of which have especially flourished in the recent environment. In the year to 30 September (the investment period covered in the letter) its fund was down 57 per cent.

Here, for the record, is that non-apology in part…

Continue reading ‘Hedge fund managers: a non-apology’

Paul Woolley: Britain’s new financial guru

Paul Woolley; the new finance guru

Paul Woolley; the new finance guru

This front of this month’s Prospect is adorned by a rampaging ape, smashing through Canary Wharf. But the cover star should really have been Paul Woolley, whose ideas largely inform the cover story, written by our deputy editor Jonathan Ford. The piece details how “Woolley, a former academic, policymaker, IMF economist and fund manager, argues that efficient market theory [the defining academic theory of financial markets] falls down because of an ‘asymmetric information’ problem.” In addition to these ideas he also had the wisdom to establish the eponymous “Paul Woolley Centre for the Study of Capital Market Dysfunctionality” at LSE, a pessimistic but fortuitous long position, ensuring immediate prominence were, say, capital markets to collapse. (Proceedings of their first annaul conference are here.) Having graced Prospect’s pages, Woolley found further fame the day before yesterday in a headline interview on Radio 4’s Today programme, discussing potential rumblings in the Hedge Fund market, and the possibility of yet more dysfunction and disaster for world markets. You can download the mp3 of his interview by clicking on the picture below.

Paul Woolley on the Today Programme

Paul Woolley on the Today Programme

(Ps - Later Today, Jonathan Ford promises a brief update on his piece, to include aspects of the developing hedge fund story.)

McCain tops the windbag index

Who blows hardest?

Who blows hardest?

It’s official. Thanks to this comprehensive lexical analysis of the presidential and vice-presidential debates, we now know that John McCain is, empirically, more of a windbag than Barack Obama.

Proving cass sunstein wrong

After yesterday’s mini-scoop on the Economist’s mildly anticipated decision to endorse Obama, we are considering updating our magazine slogan. Out goes “Britain’s Intelligent Conversation”; in comes “Prospect: always first with the stories that matter to middle America.” Today, we also have something of an exclusive. Sadly, it is only obliquely related to news from America, which currently focuses on the cratering McCain campaign. (Sarah Palin has, so it seems, “gone rogue”—she is off message, and continues to talk about her recent wardrobe malfunction—while fivethirtyeight keeps the contest on a knife-edge with its odds that Obama has a mere 96.7% chance of victory.) Instead, it is this excellent video mapping tool I was sent by a friend this morning, released overnight, which allows the discerning 2008 procrastinator to optimise their election-related time wasting, by viewing the relative popularity of various political YouTube clips.

It’s quite fascinating—in particular because of the way it helps lift the lid on the right wing videos— those on the right hand side of the graph above. Worryingly, despite having what must amount to a chronic YouTube condition, I had barely seen any of them. Why worrying? Cass Sunstein’s Republic.com argued that self-chosen media spaces, in which one was insulated from opposing opinions, were the principal danger of the information revolution. The internet, he argued, allows people to avoid serendipitous encounters with ideas they don’t like: gun nuts only see pro-gun websites; liberal pinkos stick to the Daily Kos, and so on. Rather disturbingly, it seems this rule applies to my election video watching also. Having visited the site, however, I have been happy to learn the truth behind Obama’s enthusiastic support for infanticide, in addition to seeing a hot new video doing the rounds, from a 2001 interview, in which the young Obama scandalises America by coming out in favour of mild progressive taxation. Catching up on right-wing videos: not a bad way to spend the day, as I’m sure Mr Sunstein would agree.

(Ps - in exchange for our constant stream of internet scoops, we need your help. In our next edition, we may do a round up of the best internet things of the election. If you have any favourites, please leave them in the comments. I’ll start the ball rolling with mine: this fabulous Mike Huckabee parody, from way back in December 2007.)

Fireworks displays and the future of television

Peter Bazalgette’s article in the most recent edition of Prospect argues for a fundamentally new model of funding media, through different sorts of adverts run by digital tracking technology companies. Why so? Like broadcast television or fireworks displays, the web is very much what economists call a public good—something which is difficult to charge for directly but which can be made economically viable when it is charged for either obliquely or through some kind of compulsory levy such as a TV license fee. And while you can get round this problem with a fireworks display, it can be rather more difficult for television….. Continue reading ‘Fireworks displays and the future of television’

Who will the Economist endorse?

And the result is in

And the result is in

It’s endorsement season in America. Perhaps unsurprisingly, given his commanding poll lead, Obama has to date matched his favour with wavering voters with a knack for tempting skeptical editors. The running tally shows the Democrat ahead 179 - 60 in major editorial endorsements. This is interesting, for a number of reasons. Such liberal bias is relatively recent. A reliable source told me a while back that until Bill Clinton, LBJ in 1964 (in the aftermath of an assassination) was the only postwar Democrat to gain more endorsements than his Republican opponent. This changed with Kerry. Now Obama has a handy lead. Such a situation makes the decision of right-leaning publications more intriguing. Some are predictable. Few can have been surprised by last week’s lengthy Obama hagiography in the New Yorker; it also would be a stretch to describe the Guardian’s endorsement as coveted. Others are more interesting. The Financial Times for instance, sometimes a swing endorsement, came out for Obama.

Were Prospect to endorse candidates, ours would clearly be hotly anticipated. Our studious neutrality in such matters, however, means the The Economist is perhaps the most interesting decision. The magazine—socially and economically liberal—would like to endorse a socially-liberal republican. It would probably have liked the 2000-era McCain, but instead gave a hearty endorsement to Governor Bush. It has recently run a fairly tough editorial line on Obama, criticising his positions on trade and the economy in particular. And its editor, John Micklethwaite, wrote a (very good) book in which he predicted the long-term ascendency of American conservatives, a notion which has perhaps been slightly undercut by the recent implosion of that movement. The decision is one which I have a small insight into, as a former Economist intern. Under the previous editor, Bill Emmott, a poll was taken of the Economist’s hundred or so editorial staff. (In 2004 this was said to overwhelmingly favour Kerry.) This informed the decision, but ultimately the choice was for the editor alone. In 2004, in a rather woosterish editorial, Emmott sided with his staff and went grumpily for Kerry. What of this year? Obama’s lead, his self-evidently superior candidacy, and the need for newspapers to side with a winner, give three strong reasons to suspects an Obama nod. I’d be surprised if they don’t. Nonetheless, the Economist’s political staff tends to be more right-wing than its ordinary writers, its editor is a thoughtful, principled centrist conservative, and the magazine has traditionally taken a hawkish, McCain-ish foreign policy line on Iraq and Iran. Perhaps there is room for a very minor October surprise after all.

UPDATE: reliable sources tells me that the decision is made; in news unlikely to much bother the swing voters of rural ohio, the editor announced to his staff meeting this morning that Obama will, this Thursday, be able to count The Economist among his official backers. With back to back endorsements for Kerry and Obama, perhaps we should see it as a Democrat-leaning newspaper after all?.