Don't mention it, but the nation's finances depend on the kindness of strangers
CHRISTOPHER FILDES
New York
Back from the hills and the Hamptons comes the workaday population of Manhattan, returning to something like business as usual. Last week the Republicans were in town, and the protesters, and (of course) the police. No fewer than five special trains, I was pleased to learn, were on standby for the President in case he had to leave in a hurry: one in the robber barons' siding at the Waldorf Astoria and four more under Madison Square Garden. Other New Yorkers seemed content to leave them all to it. I had rather hoped for some argument. Once every four years, I expect the world's largest economy and the state of the nation's finances to come into political focus. When George Bush I was levered out of office by Bill Clinton, the crowbar he chose selected itself: 'The economy, stupid.' In fact, it was brightening up, and got brighter for most of the rest of the century. Even the United States Treasury prospered. When George Bush II took on Al Gore, in a race that went to the wire and then to a photo-finish and then to a stewards' inquiry, what divided them, I noted, was the surplus piling up on the Treasury's books, without apparent effort. If things went on like this, I was told, the national debt would be extinguished by the year 2013, and what would the bond market do then, and all those industrious people in Brooks Brothers suits who earned their living by it? Each of the candidates had his own remedy. Mr Bush was for lower taxes, Mr Gore for higher benefits. Experience suggested to me that this kind of problem solved itself, and so indeed it has. By now the nation's finances depend on the kindness of strangers.
Unwelcome omen
It would be too much to expect Mr Bush to draw attention to the two soaring deficits — on the federal budget, and on the current account of the balance of payments. He retires to bed early and they do not keep him awake. His Treasury Secretary, John Snow, has played no visible part in this campaign, which the President has fought by wrapping himself in the star-spangled banner. If his opponent, John Kerry, wants to bring the deficits into debate, he has been in no sort of hurry. This week he has begun to focus on employment — on the jobs in manufacturing industry which have been leaving home and moving south of the Rio Grande or out towards China. The implication is that Washington should be more willing to protect them, and that Mr Kerry would be. That must be an unwelcome omen. If, this time, the candidates are leaving the argument until after the election, it just goes to show that surpluses are easier to deal with than deficits, and more fun, too. The unpleasant choices can wait.
New face at the Fed
Alan Greenspan's contribution to the debate has been suitably gnomic. The rising cost of pension provision, he says, will mean that we shall have to work for longer. Since the living national treasure of the Federal Reserve has now passed his 78th birthday, he has certainly set an example. George Bush I blamed his policies for the loss of the 1992 election. He has given George Bush II a much easier ride, but next year his successor must at last be found. Robert Rubin, who was President Clinton's Treasury Secretary, is tipped as Mr Kerry's choice, and Martin Feldstein, formerly chief economic adviser, as Mr Bush's. The only safe forecast, though, is that the days of the easy ride will soon be over.
Randolph was right
My advice to the candidates' speechwriters would be to crib from Lord Randolph Churchill. 'Do not trouble yourselves about these quarrels,' he advised. 'The truth is — and I speak with the advantage of a lookeron, who, as you know, generally sees both sides of the game — that both parties are extravagant, and that all governments are lavish.' Lord Randolph's own party, now in opposition and armed with unconvincing plans to bring public spending under control in seven years' time, bears out his diagnosis. He himself ceased to be a looker-on, became Chancellor of the Exchequer, fell out with the spending departments and resigned. I see no hope on either side of the Atlantic that his example will be followed.
Alastair's tunnel
The call came through from Sir Alastair Morton's office at the Strategic Rail Authority: 'You know that railway he's going to open on Thursday? The Kent and East Sussex?' Yes, I said, I was looking forward to this come-back for steam traction. 'He's ill. He says you've got to open it.' I opened it. You did not argue with Alastair, or not without donning body-armour, but all those years of effort and combat must have left their mark on his health, and now comes the news of his death. I went to see him in his early days at Eurotunnel: what, I asked, is a nice guy like you doing down a hole like this? He explained that over supper with a friend of his and mine, the chairman of one of Eurotunnel's banks, he had volunteered the view that this project would not get off the ground or under the water. The next morning brought a summons from the Governor of the Bank of England: 'Mr Morton, there's something we want you to do for us... '. You do not argue with Governors, either, but soon enough Alastair warmed to his tunnel. This was, after all, the grandest of grands projets, and he believed in them and thought that we as a country were bad at them. What this one needed, he said, was an owner. The contractors must learn that it had not been planned for their benefit. Over the next eight or nine years he left no one in doubt. Even after the Queen had rolled through the tunnel (her Rolls-Royce secured to a truck) came the long delays of commissioning and re-engineering the trains and leisurely testing for safety, while Eurotunnel's debts mounted up at compound interest and the chairman pinned his hopes on some rewarding litigation. Some successor of his still needs to re-engineer Eurotunnel's finances, and some creditors must, however reluctantly, turn into owners, but the tunnel is Alastair's monument. When he stood down as chairman, I quoted the epitaph found for Brunel by Daniel Gooch of the Great Western Railway: 'Bold in his plans but right. The commercial world thought him extravagant, and he was so, but great things are not done by those who sit down and count the cost of every thought and act.'
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