LONDON, England - It's not that far from the U.S. Treasury, next door to the White House, to the great white dome of the U.S. Capitol. But as Treasury Secretary Henry Paulson shuttles daily along Pennsylvania Avenue to plead with America's legislators and secure their swift approval for his plans to bail out struggling U.S. banks, it must feel as if he's crossing a huge cultural divide.
Paulson must use all his skills in dealing with politicians.
Let me explain. Paulson is from Wall Street, where he used to run Goldman Sachs, and in financial markets, there's a particular discipline to describing problems and suggesting solutions. There's no room for distortion, exaggeration, sentimentality or wishful thinking; you have to call things the way you see them. If what you see happens not to fit in with your ideological viewpoint, tough.
The political world is different. I'm not calling politicians liars here, but what I think they would acknowledge is that, in politics, to call things exactly the way you see them can be painfully naïve and damaging. Call it restraint, call it spin, call it smoke and mirrors; if you're in politics you need to look principled and you have to toe the line. That's why you were elected, and if you really have to abandon your principles, make sure you're as graceful and as persuasive as you possibly can be.
There's no grace to the jagged shape of the ideological U-turn Henry Paulson has described in embracing the $700 billion bailout plan he and the Fed Chairman Ben Bernanke are touting to Congress. Not only have recent events forced him to set aside his own personal beliefs in free markets and minimal regulation, but he has had to drag the rest of the Bush administration with him, including a president steeped in the idea that business must be free and taxes must be low.
It speaks volumes for Paulson's advocacy that he has succeeded here. Now he has to do the same on Capitol Hill, and I suspect that his appearances there will have been among the most stressful moments of his life. He has not minced words when describing what he sees as the consequences of failure to rescue the banks and the financial system, and whether or not you think he is doing the right thing, he is clearly totally convinced in his own mind that this bumpy road is the only way forward, and he has no qualms about letting his conviction shine through - even if he surely thought something quite different a couple of weeks ago.
Equally striking, though, is the way that Paulson's elected questioners seem publicly to be going through the motions of hostility and resistance to the bailout plan, even as we learn that behind the scenes there is strong bipartisan support for it. The betting is that the legislation will pass in some shape or form, yet there's an unwritten understanding that as part of the price of approving it, Paulson, Bernanke and administration officials have to be given a ritual hard time.
The politicians know that the fallen titans of Wall Street are an easy target, and by saying that the bailout plan gets them off the hook, they will score points among the voters. I won't call it bad faith, just part of an essential political process in a mature democracy. Perhaps, though, this feeling explains why I prefer to cover business rather than politics.
Henry Paulson also used to be an American Football star. It's a game in which sheer weight counts - look at the size of the players - but skill trumps weight. He knows it's not enough for the Treasury Secretary, the Fed Chairman and other financial luminaries to demand something. They also have to deploy their utmost skills - and, crucially, be seen by the voters to do so - if they are to win this game against opponents who love to play to the grandstand.
When my crew and I arrived on the scene at the Singapore office of AIG, we were not only struck by the number of people lining up to cancel their policies and withdraw their money but also by the remarks of the cab driver who pulled us up to the side of the building.
"Haven't you heard?" he asked us incredulously when we tried to confirm exactly what the people were waiting for. "AIG is going bankrupt!"
Now, that might not sound surprising to someone living in the United States. But we were thousands of miles away from the home turf of the American insurance giant. Granted Singaporeans have a strong interest in the financial world, but the driver got me wondering ...
How many Asian financial institutions can you name?
In the past few days, Japanese companies such as Mitsubishi UFJ and Nomura have been throwing their money into Wall Street firms - either to buy a strategic stake (Mitsubishi UFJ into Morgan Stanley) or to pick up assets (Nomura into Lehman). The belief here is that these Japanese players are building their brands and positioning themselves for greater influence in the global financial markets.
And the Japanese aren't the only ones.
Before Lehman went bust, shares of the investment bank were supported by news Korea Development Bank was gearing up to buy a massive chunk of the venerable U.S. firm.
Cash-rich governments are getting in on the action, too.
State investment arms, known as sovereign wealth funds, are buying up shares of Wall Street titans such as Merrill. Many of the governments out here have coffers filled with cash from goods sold to American consumers.
So are Asian financial firms poised to become household names?
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