As I write this, the world is playing witness to extraordinary reports from Washington, USA, about the political wrangling and theatrics which surround the great bail-out plan offered as a solution to the credit crisis by American economists.
Last night, Congress seemed to have come to an agreement about the proposed injection of $700 billion into US financial markets, but by this morning that agreement had fallen apart, with Republicans apparently divided over the terms of the plan and other members of the House desperate that action had to be taken imminently warning that there was no time to beat around the proverbial bush.
There have even been reports that US Treasury Secretary Hank Paulson got down on one knee in a moment of desperation to beg Nancy Pelosi, Speaker of the House, to hurry acceptance of the plan he had drawn up.
Pelosi later appeared on ABC’s ‘Good Morning America’ programme and was pointedly critical about the behaviour and policies of Republican politicians during the current debate. She also blamed their term in the White House as contributing to the Credit Crisis, pointing out the Democrats’ contrasting commitment to free markets.
And to top things off, the presence of presidential hopefuls McCain and Obama seems only to have complicated things further with some commentators questioning if they should even be involved and others wondering how well the successful candidate will deal with the crisis once they are elected next month.
And the rest of the world…
The public, though, seem to be unnerved by the signals which all of this drama sends out. There is an atmosphere of cautious panic, though few politicians would dare admit it. The footage we’re getting from America of senators openly criticising the tactics of others, of crisis talks, Bush’s address to the nation (and implicitly, the world) and our own Prime Minister, fresh out of a Labour Party Conference, struggling to get attention from the American press and politicians – all of this amounts to startling and historic scenes which puts the importance of America’s dominance of the global markets into perspective.
At home, in the City, thousands of jobs have already been cut with the collapse of Lehman Brothers and re-structuring in other firms like Bradford and Bingley (yesterday) and HSBC (today).
Do Oxford students have anything to worry about?
In short, the answer to that question is ‘yes’. Maybe you hadn’t thought about it before, but the unsettling truth is that all of the above affects each and every one of us. The current climate is one which undoubtedly threatens our sense of security as energetic pre-graduates planning ambitious careers. And even if we’re not planning to start a job in the financial sector, the repercussions of an economic meltdown are already taking their toll on loans, investment, housing and employment in other sectors.
And the credit crisis is even reaching the comfort zone of student life itself. Readers of Cherwell.org will know that our Varsity sports teams are being hit by a loss of sponsorship.
In the coming weeks, Cherwell will be bringing you a great deal of analysis of the current situation and asking what it all means for us. There’ll be coverage in the newspaper as well as online as the world moves to try and bring credit under control. And if you’re still confused about the terminology and basic economic principles in all this, don’t worry, you’re certainly not alone and we’ll be supplementing our coverage with plenty of explanation as to what everything means in plain English.
World events are likely to continue affecting student society sponsorship, external investement in the University and our own personal financial prospects. Cherwell will keep you as up to date on these things as physically possible. Stay tuned.
