... to save some jobs, some votes, some cars.. ...Hi Ho, Hi Ho. With apologies to dwarves everywhere. The US financial system rescue appears to be unraveling as markets slowly awake to the fact that it has yet to create any new liquidity and is compromising the Fed's balance sheet in the process. The dollar is slipping and liquidity is rushing out of emerging markets. At the same time, the US public and president-elect Obama seem to have confused it with a jobs package and now seem determine to earmark part of the $700 billion war chest to bailout the auto industry. So Obama hasn't even taken the oath of office and already he is making disappointing policy decisions. It's hard to see how bailing out GM jibes with his desire to reduce America's carbon footprint. GM, maker of the Hummer. So much for ideology. This recession makes politics all about pragmatism, and in time, protectionism. With US unemployment heading towards 8.5 per cent, according to Goldman Sachs, that might be somewhat understandable, even if wrong-headed. Dubai has now decided to prop up real estate prices by creating a committee that will decide what projects can go forward and which cannot. Funding for any new projects will be tight, so making sure a scrum for new financing doesn't torpedo the market is smart policy. Collusive, but smart under the circumstances and given the fact that the market is dominated by government-controlled players anyway. We'll have to wait and see if the committee takes advantage of the moment to channel scarcer development dirhams into affordable housing for blue-collar workers and the middle-class. Doing so could clinch Dubai's arrival as a world capital and not just a luxurious urban facade. Everybody sing along! Hi Ho, Hi Ho... Price fixing's bad we know... ... but there's too much debt to let them go... Hi Ho, Hi Ho.
warnold@thenational.ae