Interesting, how one can get caught by events, which was apparently always old MacMillan’s greatest daily concern.

The first inclination for many of us earlier this week was to assume a political crisis of major proportions. Local is lekker, as we all know, but what was shaping was pushing the outer boundaries of lekker.

But all the fuss turned out to be merely a change in government, perhaps messily announced, but quite normal in just about any other democracy.

With us, though, drama and trauma are never far from the surface. Yet by the end of the week, we had a better cabinet than the one we started out with.

Seven years of 7de Laan

So much for trauma, even if seven years of Sevende Laan soapies had to take a backseat when it came to the alleged drama. Apparently, there were even some tears (turning the whole thing nearly into a tearjerker).

Meanwhile, over in the US our real fate is being decided. This is something we need to pay more attention.

First, there was conceptualization, as Bernanke prodded Paulson, who finally plucked up the courage to confront the Congressional legislators.

Give me $700bn, I will go and mop up toxic assets at banks, in the process making a price and hopefully easing the distress, making banks functional again. We will then sell off what we bought, possibly at a better price, even showing a profit for taxpayers.

Brilliant. Global markets loved such clarity. What the situation needed was leadership and none better than Yankees breaking out of a tight fix. Just like football.

Congressional leaders were completely overwhelmed by the opening Paulson salvo, backed by covering fire from Bernanke, both promising the end of the world being very close. As it was, indeed.

Having overrun the Congressional trenches, they went into the weekend to sort out the detail, with all of three guiding pages from Paulson.

Nice try.

Banks will bleed

As the days went by, the Democrat leadership injected a few wishes of its own. Oversight was non-negotiable. But also the idea that banks would bleed, including shareholders and senior managements in failing institutions requesting help.

By yesterday morning the outline of a major political deal had been agreed, and final closure was imminent.

This fine piece of brinkmanship finally got sunk late on Thursday night by the Republican caucus balking at the whole philosophy of the deal.

It was un-American. Socialism through the backdoor. Totally unacceptable. Instead, offer the banks mortgage insurance (and no doubt a few aspirins). And all would be well.

Apparently late on Thursday night (25 September) Secretary Paulson ended up on bended knee in front of Nancy Pelosi, Democrat-leader of the House, in so many words begging closure.

Imagine Trevor Manuel going on bended knee before Helen Zille in pursuit of something he drastically needs.

“It isn’t us, Democrats, who are the problem. Republicans are sinking this”, said Nancy.

“I know, I know”, said Hank.

I am reminded most forcefully of a Sunday back in October 1987, when then US Treasury Secretary James Baker 111 tackled his German counterpart on national television.

Some things you don’t do in front of the children, as every parent knows.

The next day global markets tanked, and tanked, until there was little left to tank.

Moral of the story?

Politics as usual

Ignore local politics for a while. The ANC will quietly prepare for the election next year, while politics as usual will be the order of the day, except at the health department, where a revolution may now well be in progress, and beetroot won’t be part of it.

But over in the US our fate will be decided by people who on an average day are totally forgettable, except they have the power to pull down the pillars of the temple, especially in a tempestuous election.

Unless, that is, common sense prevails, Nancy rallies her troops (though not all of them) and gets a quarter of the House Republicans (at most) to vote for this urgently needed financial rescue. And there is still the Senate.

Rabbits from strange hats

White rabbits have been pulled from stranger hats before. It is all a matter of calculation. Market participants and key policymakers are all quietly muttering that failing to take action would have consequences far worse than anything legislators are now being asked.

But politics is the art of the fine compromise and knowing when to take advantage.

It may well become a Democrat bailout of a Republican mess, as a new Democrat President looms to take power.

Also ahead looms yet another weekend, with no doubt more negotiations to navigate. Then there looms next week, with global markets weighing in. And Congress will be impatient to recess by weeks’ end so that the real politicking for November can begin.

Surely they don’t want to start that empty-handed as the financial system implodes?

What potentially awaits us this coming week is the finest rescue in history. Either that or there looms the financial equivalence of nuclear extermination.

Interesting times we live in, in which the other bruiser’s politics are a lot more important than our own kindergarten variety.

Cees Bruggemans is chief economist of First National Bank.