Tuesday, April 7, 2009

HISTORICAL ANGEL OF DEBT.....

NOW PLAYING AT A U.S. ECONOMY NEAR YOU.....

This month is French Revolution month at least on my nightstand. A few weeks ago, I finished "Queen of Fashion: What Marie Antoinette Wore to the Revolution" by Caroline Weber and now I am reading "Marie-Therese, Child of Terror: The Fate of Marie Antoinette's Daughter" by Susan Nagel.

In between I am also reading Gems of Wisdom from the Seventh Dalai Lama (Of which my husband says, 'I could have told you all of that and you had to go out and buy a book?"). When I am feeling poor and unloved, I skim through a beautiful book, "Le Grand Frisson: 500 years of Jewels of Sentiment," published to accompany the ongoing stellar Chaumet exhibition at the museum in its Hong Kong boutique.

Piers Morgan's "God Bless America" and "Luxury Brand Management" by Michel Chevalier and Gerlad Mazzalovo will have to wait. In the case of the latter, I think retail is gonna have to wait a LONG TIME for a recovery. If Lane Crawford offered the local media 40% off selected new merchandise last weekend, you know the same offer to the general public will not be far behind....(But sadly, there was really nothing to buy because stuff in the stores are UGLY!!)
However, at the Celine 'friends and family" (read: 70-90% off) I managed to get 2 4-ply cashmere sweaters for 3000 HKD. My friends got shoes for 700 and dresses for 1500. Buy five items and get an extra 10% off---not even Giordano could give you a better deal.




Meanwhile, back in bed with all my books and all the news fit and not fit to print, I noticed similarities between the France of Louis XVI (Mr Marie Antoinette to you and me) and the America of Barack Obama (Mr Michelle Obama to you and me) go beyond their wives' fashion leadership. (But don't you think Mrs Sarkozy is so much chicer especially in that pale grey suede??/silk?? shirtdress she wore in Strasbourg?)

Of course I wanted to bring up the similarities with you-s but because a) I didn't have any solid references except the books and my own news analysis and b) I am neither a graduate of economics or history, I couldn't. I knew you-s peeps would have gone up in arms against my views like in, hold your Selle Francaises (horses)...the French Revolution.

Et voila...deniere fin de semaine there was a column by a visiting professor at Harvard University (great minds think alike!) which I have copied below. For you-s ADD-internet generation caption-only readers, I have highlighted what I think are the main points that will help impress your parents or Tim Geithner, in case you sit next to him at dinner (I heard he's hiring..)


What the French revolution can teach America
By Dominique Moïsi
Published: April 2 2009 18:13 Last updated: April 2 2009 18:13

“Eat the wealthy.” The ferocity of the words used by some demonstrators in London on the eve of the Group of 20 summit evokes the worst excesses of the French revolution. Anti-capitalist anger in the west is not confined to Europe. Alexis de Tocqueville’s The Ancien Régime and the Revolution is as relevant to understanding today’s America as his deep and eye-opening thoughts on the young American republic in his Democracy in America.
Of course, America in 2009 is not France in 1788, the year before the fall of the Bastille (the prison that embodied the oppressive nature of the monarchical regime) and the symbolic beginning of the French revolution. The fall of Lehman Brothers in September 2008 has nothing to do with the fall of the Bastille; symbols of wealth should not be confused with symbols of oppression. There is no guillotine around the corner and it would take a lot of imagination to compare President Barack Obama to Louis XVI, or Michelle Obama to Marie-Antoinette.
Yet as a European living in America – watching news on television every night, talking to friends, colleagues or my students – I sense fear, anger and a deep feeling of injustice reminiscent of the climate on the eve of the French revolution. Just replace bread shortages with foreclosures, aristocrats with bankers, and privileges such as the right not to pay tax with stock options. Add to that support for the king but rejection of many of his ministers, and the comparison looks less far-fetched.
The explosion of populist rage that has accompanied the AIG scandal, amplified by an opportunistic Congress and by media that play to the tune of their audiences when not reinforcing their passions, reflects the depth of suffering in the US. Main Street, like much of France at the end of the 18th century, is outraged. Fear for its own present and future is combined with anger at those it considers responsible, and who are much less affected than they. Are not senior bankers today like the aristocrats of yesterday, their privileges no longer justified by their social functions – to serve the king with their swords or to contribute to the creation and dissemination of wealth?
The problem with the economic team of the new president is that, like the court of the king of France in pre-revolutionary times, it has inherited all the bad reflexes of the ancien régime, mixing excessive sympathy for the outdated logic of the world of finance, which it helped to create, with insensitivity to the emotions of the ordinary people, which it tends to ignore. This sympathy is perceived to contrast with the harsh treatment of carmakers.
Bankers and financiers have to reinvent not only their trade but also their way of life and, above all, their value system. In the Madoff scandal, just as shocking as the crime of an individual was the behaviour of many of his rich customers, who combined greed with a lack of financial common sense.
An interesting incident was reported by CNN last week. A group of protesters – very few, to be honest – rented a bus in Connecticut and stopped in front of the mansions of AIG executives to express support for those who had returned their bonuses and outrage against those who had not and were still living in grand style, in contrast with the many more who had lost nearly everything. (writer's note: I bet the 'bad guys' all happen to not be home because they were on a fact-finding mission in the Bahamas)
The greed of some was tolerated as long as most of society continued to progress. But today’s combination of fear and humiliation with a deep sense of injustice leads to anger that is potentially irrepressible. The strength of the American republic has been bolstered by the popularity of its new president. This capital should not be squandered on reliance on a media-savvy communication culture. As can be seen so often in history, less is more. The president of the US simply speaks too much.
Revolution is not around the corner; at least, not in America. But there are lessons Mr Obama can learn from the French king’s failure to manage dissent. He must not fall prey to populism. His goal is to save the economy, not punish the bankers. At the same time, he must not be seen to have too much sympathy for the world of finance and its excesses or to cut himself off from the suffering of his people. If he fails, the corporate laws of today will face the same fate as the ancien régime rights of yesterday.
World leaders’ agreements, substantive or superficial, will not suffice. It is the trust of their respective citizens, translated into hope and confidence, that will make the difference.

The writer is a visiting professor at Harvard University and author of the forthcoming The Geopolitics of Emotion
Copyright The Financial Times Limited 2009

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