Saturday, 29 November 2008

The Pulse of Transition

Mrs Stodge and I have returned from a ten-day break in Las Vegas, that uniquely American experience. As it was our second visit, we knew what to expect but nonetheless Vegas always offers something new and surprising.

We stayed in the Palazzo and I can thoroughly recommend it.

America is a country in political transition. The Bush Administration is in its dying days and it's pretty clear George W. Bush is ready to leave The White House. At the recent Asia-Pacific Summit in Peru, Bush was doing the round of goodbyes and was a by-stander in the negotiations. Condoleeza Rice has disappeared and the only member of the Bush Administration still seen regularly is the now largely-discredited Henry Paulson.

In contrast, Barack Obama, the President-elect, is growing in significance as January 20th 2009 approaches. It's no surprise that the economy is the top priority and the appointment of Tim Geithner as Treasury Secretary replacing Paulson has been widely welcomed. On Thursday Novemner 20th, the DJIA slumped to 7,550 but had regained nearly 1,000 points in a sustained rally up to close of business yesterday.

The shops were massively discounting even before yesterday's post-Thanksgiving sales (known locally as "Black Friday"). I bought a shirt, advertised at $40 for just $18.60 and similar discounts were widely available.

The conservative media has been in complete disarray and denial since the defeat of John McCain. Led by the odious Sean Hannity who it seems has now forced his co-host Alan Colmes off the programme, the charge has been that the Obama Administration will be the Clinton Presidency Mark 2. Now, to be fair, Hillary Clinton looks set to be the next Secretary of State but the other key point is that you have to go back to the Carter Presidency to find Democrats with Government experience before Clinton so it's hardly surprising that in trying to put together an experienced team Obama has had to look at Clinton-era Democrats.

Although criticism from the conservative side of Geithner's appointment was muted by the strongly positive response of investors, the line now seems to be that Geithner, through his connections to Lawrence Summers and Robert Rubin, himself part of the failed management at Citigroup, isn't the right man to solve the economic mess but then again who would be ?

Vegas was quiet, even at the weekends though a strong Thanksgiving was expected. The evidence to my eyes was that the very expensive restaurants (where you expect to pay $250-$500 for a meal) were struggling and the high rollers were staying away too even though the 1 cent slots were as popular as ever and the weekend football (College on Saturday, Pro on Sunday) drew large crowds to the sports bars and books.

Apart from the aforementioned conservative rearguard, however, there seems a real sense of optimism and confidence in Barack Obama but also high expectations. Although the DJIA may have hit its low-point, a slew of other economic data looks bad and although the $9 billion Citicenter Project in Las Vegas looked busy, so were the food banks and other forms of charity as unemployment rose to 7.3% in Clark County and 7.5% in Nevada.

The sadder aspect of the exhortation from Fox News to "get out to the shops" on Black Friday was the death of a member of staff in a stampede at a WalMart on Long Island and two people killed in a shooting at a store in California. There was almost a febrile desperation about the whole thing as though the entire economy depended on good sales figures on Black Friday.

Final word - don't eat at the Wynn Buffet - poor value at $37.95 - but the Cheesecake Factory continues to deliver as does its cousin, the Grand Lux cafe.

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