24 January 2008

The Panic Button


The Feds hit the panic button before trading opened on Wall Street on Tuesday, dropping the Prime lending rate by three-quarters of a percent.

The bold move was out-of-cycle with the regular meetings of the Reserve Board, and was intended to signal the intense concern of the US Government over the melt down of markets overseas. The market wobbled a bit as I headed grimly across the District under gunmetal skies.

The Weather-guessers had promised a “Wintry Mix” whatever that was supposed to be. I thought of something you might prepare with Wheat Chex cereal, pretzels and a stick of butter in a cozy 350-dgree oven, but thought it might be something a little icier.

I think I hoped to have all the bridges safely behind me after I dropped a proposal wrapped in a FedEx box with the Bureaucrat on the second floor of the new addition of the intelligence agency at Bolling Air Force Base. I always feel a sense of wonder about the building when I walk in there. A medium-range Soviet nuclear rocket stands in the corner of the soaring glass lobby, a relic of the brief cease-fire in the struggle with the Russians, and a couple gold-plated AK-47s are in a case near the stairs.

I took the elevator.

The construction of these public edifices is a complete team effort, of course, though I am entitled to claim a small part of the responsibility for its existence. We put it in the Program ten years ago, when I was indoctrinated into the mysteries of the Federal budget, and a wily programmer explained the ways things worked. He had a scheme to harvest the profiles of existing programs scheduled to be completed at the very end of the budget cycle. You would think that the money would end at that point, and the program adjusted downward but that is not the case.

Instead, the money is flat-lined out into infinity in the no-person's world beyond the five-year Program of Record. In that gray space   all the parallel lines come together and anything is possible with boldness and patience.

His scheme was a thing of wonder. The Building entered the Program as a two-year chunk of military construction (“MilCon”) money that was breathtaking. We constructed elaborate story lines to go along with it in justification, and the five long years it remained in the future years program the sleek building was a target for all sorts of mischief: raids, diversions and endless Congressional Questions for the Record. It took the implacable determination of several Directors and dozens of stalwart staff to protect it and keep the project on the books.

The issue was still in doubt all the way to 9/11, at which time it became a done-deal, just before the time the bulldozers arrived to start site preparation. So when I walk down the long glass tunnel, and swipe my badge at the turnstile and troop past the rocket and the glass case with Saddam's golden guns, I get a quiet sense of satisfaction that Government can actually get something done, as unlikely as it seems.

MapQuest told me that the fastest way to my next objective was south on I-295 to the Wilson Bridge, and with the package in the hands of the Government hours before the deadline, I turned on the radio, able to think about the next item on the itinerary. The market had dropped a few hundred points, but the bland voice from NPR said there was a rally in progress.

The next item was the Job Fair was in Fairfax, an attempt to attract qualified Spooks to work on the new project I am attempting to manage. It was the worst possible thing to have scheduled on a day with Wintry Mix coming out of the sky. It was more than possible that I would not make it on time, and vaguely possible that I would not arrive anywhere at all.

The sky was the same color as the gray of my hood as I left the Base, and hurtled south toward the new Wilson Bridge. Between the sky and the hood and the flat gray Potomac the world had assumed a unity of color. One of the six-lanes spans is operational, and the second is nearing completion. The Bridge project was an issue of sharp controversy almost since the day I got my driver's license, and that fades into gray memory.

The people who live nearby, and who optimistically constructed their McMansions near the old disintegrating bridge fought to the last breath to keep the project at bay. They dragged up Civil War dead in the path of the on-ramps as martyrs against it in the last fight, but they lost in the end. The period of demolition and construction of the mighty span has been in progress for years, a decade-long nightmare of concrete pouring and lane closures. The Bridge is the lifeline of the major north-south interstate of the East Coast, and for a nightmarish twenty-mile section, shares the southern arc of the Capital Beltway.

Impressive as it is, the project will be at capacity the instant it opens, and someone, somewhere, should be planning for its replacement. The first droplets of moisture were hitting the windshield as I cleared the construction zone, and had to swerve wildly across the white warning markers to stay on the through-lanes west into Fairfax County; it had been long enough since I had traveled this way that the traffic pattern had been changed, and the far left lanes now swept up into the Wintry Mix and south to Richmond.

By the time I had plunged into Fairfax and left the Beltway behind, the market had risen and was about even. The Fed's bold move had apparently prevented a Wall Street panic, or maybe the Street woke up already knowing all the bad news that caused the Europeans and Asians to freak out. All the talk about new world orders and the irrelevance of the American engine of commerce was premature.

It is not that a major readjustment is not happening; that has been apparent for a long time to anyone paying attention. It is a pity that what passes for our leadership has not acted with courage to confront the future. There is no earthly reason we have continued to write bad checks against the future, and lie to the rabble that everything is fine. You can't blame people for not wanting to hear bad news, but I am not sure anyone with any brains listens to the Government anyway, except for the Fed.

But the reason that fifty people were waiting at Fairfax to try to hook themselves to jobs that are guaranteed across the five-year program is an indication that no one is panicking. They are just getting ready to hunker down and assure themselves of something steady, just in case. I wondered about re-financing.

It is just prudent.

The market was just about even when I turned off the car, and prepared to walk to the building where the people were waiting in the Wintry Mix.

Copyright 2008 Vic Socotra
www.vicsocotra.com

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