A decade later, 9/11 has finally brought the political parties together in this respect: They’ve both mastered the art of politicizing the terrorist attacks.

The painful events of Sept. 11, 2001, are less raw in the nation’s memory. Some of the visceral emotion of that day has faded. The meaning of 9/11 has changed, thanks to events such as the killing of Al Qaeda mastermind Osama bin Laden.

Continue Reading But the presence of 9/11 in politics is as profuse as ever. Most recently — days ahead of the 10th anniversary of the attacks — candidates in a New York congressional election have traded sharp accusations over who’s more committed to protecting the country from terrorism and supporting first responders.

Even as voters grow weary of the nation’s wartime footing, Democrats and Republicans continue to seek out opportunities to wield the memory of 9/11 for electoral gain — whether that means using the Guantanamo Bay detention center as a wedge issue, courting the support of firefighters and police or attacking a proposed Islamic center near ground zero.

In an interview with POLITICO, former New York City Mayor Rudy Giuliani said it’s inevitable that some level of politics would creep into conversations about 9/11.

“It’s hard to talk about Sept. 11 without making a reference to politics,” Giuliani said. “The minute you talk about the causes of it, it immediately becomes a political discussion — the minute you talk about what should be done about” the aftermath.

The man dubbed “America’s mayor” for his much-admired performance on the day of the attacks and in the months afterward should know. In 2007, then-presidential candidate Joe Biden mocked Giuliani’s campaign during a Democratic debate as boiling down to three words: “a noun, a verb and 9/11.”

Giuliani, who gave the weekly GOP radio address Saturday, called Biden’s comment a “cheap shot,” and defended the role the attacks played in a campaign focused on strong leadership and national security.

“I’ve tried very hard not to politicize Sept. 11, particularly around the time of 9/11, but it’s almost impossible not to be criticized for politicizing it because it’s a political event,” Giuliani said. “You’d almost have to not talk about it in any meaningful way not to be subjected to those people with whom you disagree with [about] the causes of it thinking you’re politicizing it.”

Democrats rolled their eyes over Giuliani’s terrorism rhetoric for years, just as Republicans sought him out as a surrogate. But just a few months ago, President Barack Obama embraced him as a 9/11 symbol in his own right, placing a phone call to the former mayor after U.S. forces killed bin Laden in a Pakistani hideout.

Obama also asked Giuliani to squire him around New York City, visiting a firehouse, meeting with Sept. 11 victims’ relatives — many of whom have relationships with the former mayor — and laying a wreath before the 16 acres of devastation at the World Trade Center site.

Giuliani’s far from the only New Yorker to become associated with 9/11-related issues in a political context — Hillary Clinton, George Pataki and Michael Bloomberg have all had their moments related to the attacks.

And some candidates have used the topic in far more blatantly exploitative terms.

As I watched the sun set slowly and majestically over the hills in Simi Valley, California at President Reagan’s presidential library where Republican presidential candidates debated Wednesday, I reflected on a moment from a decade ago that illuminates some of our politics.  Ten years ago, early the morning of September 11, I was sitting at my desk in my Austin, Texas office, looking at a national poll of voters that I had just gotten back that day.

At the time I was consulting for the Republican National Committee, and one of my jobs was to oversee the polling that might help inform the White House along the way.  I was scheduled to fly to Washington, D.C. that day to brief the White House on the latest numbers.  And then the news reports came in about the hijacked planes on the East Coast.  Planes were grounded, my trip was canceled, and life changed permanently for all Americans.

I never got to give the briefing on that poll.  In one moment the entire political environment in the country changed.  In that poll we did not ask a single question on foreign affairs, terrorism, or national security.  President Bush’s job approval rating had drifted down to 51%, and the opposite poles of the electorate were reemerging strongly.  Republicans adored President Bush; Democrats despised him.

Within a few days, national security and terrorism would dominate the conversation and continue to do so at least through the 2004 re-election campaign, and President Bush’s job approval would skyrocket to a historic high in the 90s.  No more polarization;  the country was united, and waited to be called into a common and unified bond of action by the President.  Unfortunately this never happened. Instead, citizens were told to go shopping and get back on airplanes – a huge missed opportunity to address the problems of the day and on the horizon.   Over time President Bush’s numbers would drift down, and the country would return to its polarized place it had started at before 9/11.

Flash forward a few years, and we see an inspirational and history-making leader inaugurated in January 2009.  President Obama, while not at the all time highs of President Bush in approval, had a enormous support from Democrats, Independents, and Republicans.  Again, the country hungered for a call from our leader to come together as a nation and address our problems.   Again, unfortunately, this didn’t happen. In a few months time, we degenerated back to the vitriol of the prior years.  Another big window of opportunity missed by another president.

So here we are today, on the eve of the ten-year anniversary of 9/11, going into an important presidential election, and the bitterness between leaders of the political parties is at an all-time high.

Neither party seems willing to be frank and honest with the American public.  Our leaders seem unable to tell Americans that our economy has fundamentally changed and there is no going back.  That to regain our future, we are going to have to all participate in shared sacrifice.

Republican candidates at the debate castigated President Obama, and offered economic solutions which, while appealing  to the base, are out of step with today’s economic reality.  We also learned that Republicans, while justifiably applauding former President Reagan, can’t seem to let go of the idea that maybe things aren’t the same today as they were in 1981.

In his economic speech to the joint session of Congress, President Obama offered  a bipartisan collection of policy items but did not lay out a vision of what the economic future looks like or inspire any confidence about how we are going to get there.  It felt more like a lecture by a professor to a class on homework assignments, than a leader professing the vision we could all get behind and move forward together.   And the response to the speech has been predictably partisan and divisive – Democrats applauded the president, while Republicans criticized.

We can’t continue on the path we are on.  Another window of opportunity will appear to unite the country, just like the ones that did for Presidents Bush and Obama. I am hoping a leader will be there to grab it and lead.  And maybe the parties will let go of clinging to leaders of the past (for one campaign I would like a Republican to not mention Reagan, and a Democrat to not mention FDR), and follow the American public to the future — through that window to witness the sunrise that awaits all of us.

President Obama is sending this $447 billion jobs bill to Congress today, with a forceful message to Republicans to put politics aside.

“The only thing that’s stopping it is politics,” Mr. Obama said from the White House Rose Garden on Monday. “We can’t afford these same political games… Let’s get something done. Let’s put this country back to work.”

Mr. Obama unveiled his plan to jump start the economy, called the “Americans Jobs Act,” before a rare joint session of Congress last week. The plan is larger than many expected. More than half of the plan is comprised of tax cuts for working Americans and small businesses, and it also includes spending initiatives in areas like infrastructure.

The president Monday morning stood surrounded by the type of workers he said his bill would support — such as teachers, firefighters, construction workers, veterans, policemen and small business owners.

The bill includes various tax cuts for businesses, including a payroll tax cut and tax credits for companies that hire veterans or those who’ve been unemployed for more than six months.

“Instead of just talking about America’s job creators, let’s actually do something for America’s job creators,” he said.

The legislation also includes aid for states and local governments to keep public workers like teachers and firefighters on the payroll.

“This is a bill that will put people back to work all across the country,” Mr. Obama said today. “Let’s pass this bill,” he repeatedly appealed to Congress, asking for “no games, no politics, no delays.”

In the face of the worst recovery from a recession in the nation’s history, a stubborn unemployment rate hovering around 9 percent and zero job growth in the month of August, the pressure is on the president to take action. Mr. Obama’s own 2012 job prospects could also hinge on the success of his legislation, as voters grow skeptical of his handling of the economy.

Yet as the 2012 election season gets under way, it’s unclear whether Republicans — who have already this year taken a combative stance against the president’s economic policies — will be willing to cooperate.

House Republican leaders have expressed willingness to consider the president’s initiatives, but some Republicans have voiced concern that Congress won’t be able to pay for it.

Mr. Obama asserted today that his bill “is fully paid for.” He said that next week, he will lay out a plan for deficit reduction that he says will cover the cost of his jobs bill and bring down the deficit further. Before Congress last week, he said he expects the so-called congressional “super committee” — already tasked with finding at least $1.2 trillion in deficit savings — to adopt some of the measures he’ll propose to pay for the bill.

In a statement today, House Speaker John Boehner said Republicans appreciated the president’s efforts to get the bill to Congress swiftly, and that the House will begin reviewing its various elements once the nonpartisan Congressional Budget Office gives its official cost estimate for the bill. Still, Boehner suggested Republicans will look at the plan with a skeptical eye.

“The record of the economic proposals enacted during the last Congress necessitates careful examination of the president’s latest plan as well as consideration of alternative measures that may more effectively support private-sector job creation,” Boehner said. “It is my hope that we will be able to work together to put in place the best ideas of both parties and help put Americans back to work.”

In the meantime, the House will continue moving forward with the GOP agenda of scaling back regulations they say hinder job growth.

Mr. Obama said today that voters don’t have the “luxury” of waiting until the next elections, 14 months from now, for solutions.

“The notion there are folks who would say we’re not going to [support these economic initiatives] because it’s not convenient for our politics… that’s exactly what folks are tired of,” he said. “It’s not OK in a time of great urgency and need across the country.”

While he called for Republicans to put politics aside, the Democratic party is employing robust political efforts to build support for the bill.

The president has taken his message on the road, starting with a stop in Richmond, Virginia last Friday — the district represented by House Majority Leader Eric Cantor. Tomorrow, he’ll travel to Columbus in Boehner’s home state of Ohio.

Meanwhile, the Democratic National Committee today rolled out a multimedia effort, including television ads, online ads and a website, to sell Mr. Obama’s bill in key states.

The TV ads, which start airing tomorrow and will continue for several weeks, will run in Colorado, Florida, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Virginia and Washington, D.C. At the website AmericanJobsAct.com, people can sign a petition in support of the legislation or find information about how to call their congrsesional representatives to advocate for the bill.

In the City for a stage performance, an elated Govinda spoke about his projects, his rift with his brother-in-law, his children and his new look.? Three of his projects —?Run Bola Run, Banda Yeh Bindas Hai and Chai Garam?— have been in the pipeline for many days now.

?“I am looking forward to the release of Run Bola Run, in which I have worked with Tusshar Kapoor. I have a couple of other projects as well at hand which I will be completing soon. But wherever I go, people ask me about ‘Partner 2’. Even I am not sure when the film will go on the floors as it is still in the scripting stage,” he says.

The actor is on a strict fitness regime and has lost a lot of weight as he wants to essay a variety of roles.

“Filmmakers were not signing me because of my weight issues.?Hence, I had to shed weight. Now I have been working out regularly at my gym and am very serious about my diet. But I don’t have any intention of building six pack abs or taking my shirt off in films,” he quips.

Govinda agrees that there has been a delay in the launch of his daughter, Narmada Ahuja, as they have not come across a good script.? “Narmada was supposed to make her debut opposite Vijender Singh, the Olympic medallist boxer. But due to some problems, the project didn’t materialise. We have been going through scripts for her. I never force my decision on my children. They know better about their career and make their own decision,” informs Govinda.

The actor makes it clear that he is out of politics and will never go back to it in future. He reasons that people like him are not fit for politics. “Entering politics was one of the bad decisions I have taken so far. Many of my well-wishers and seniors told me that politics is not my cup of tea. I am feeling very good after coming back to acting,” he confirms.

When asked about his rift with his brother-in-law, Praveen Khanna, the actor says that people have been taking advantage of his goodness.? “I don’t have any relationship with Praveen Khanna. Even my sister is not living with him. We had some disagreement and the issue was presented before the Producers’ Association. He lost his case there and started abusing me. But he says that I am the one who abused him. I request people not to heed to his baseless allegations,” he pleads and says he has learnt many things from such events over the years.

“Initially, I was not very comfortable with the small screen. I could never understand how the small screen could support the film industry. Now, I am well aware of the reach and vastness of television.?Hence, I have been taking part in many shows and am doing my best to promote myself and my films,” Govinda reveals.

Volunteer firefighter David Hill has frankly “lost count” of the number of Texas wildfires he’s fought this year.

A drought and heat wave that’s broken records set during the Dust Bowl meant that Day 291 of the Texas wildfire season passed Thursday like malevolent clock work: Over 100 active fires, dozens of new ones being reported, and tired volunteer and professional firefighters digging deep to return to the fire fields and keep overworked equipment running.

“It’s something that becomes mentally and physically taxing,” says Mr. Hill of Tomball, Texas, watching the dark plume of the Riley Road complex fire north of Houston.

It’s also something that is testing the independent streak that runs through the Lone Star state and its elected officials, who are confronting the allure of the cost- and risk-sharing benefits of a strong federal government.

Hill is part of a wildland firefighting structure that is usually a fine-tuned collaboration between local firefighters, who have jurisdiction, and a phalanx of local, state and federal authorities, including the US Forest Service, who serve as advisers and procurement agents.

Some 21,000 fires have flared up in Texas since last December. In the last week, 176 more were reported, including one in Bastrop County that has devoured 1,300 homes so far. The fires have stretched the firefighting capabilities of Texas, and the nation, to the limit.

Incident commanders have said some calls for equipment have gone unheeded as planners try to scramble manpower and equipment across this massive state.

“Because so many fires are burning across the state, our resources are spread pretty thin,” Texas Lt. Gov. David Dewhurst said in a statement. “That’s why we need the federal government to step up to the plate immediately.”

Gov. Rick Perry, currently the frontrunner among GOP presidential candidates, has been forced to press President Obama for more than $50 million in federal aid. At the same time, he defends the state’s decision to slash by 74 percent the funding for the volunteer fire departments who do most of the work, and to cut the Texas Forest Service’s budget by 34 percent, down to its 2008 level.

Money from the state’s rainy day fund will be used to fund the current wildfire fighting efforts, Governor Perry says. State legislators will have to reconcile the costs later. The fires are costing the state about $1.5 million a day, 75 percent of which could be recouped from Washington.

Mr. Obama assured Perry in a phone call on Thursday that Washington will expedite consideration of disaster requests.

But what some have called Texas’ “slash and burn” approach to balancing its state budget has left volunteer firefighters, who do about 80 percent of the work, in a lurch. Just last week, the most recent budget cuts meant 90 Texas Forest Service employees were laid off. Some volunteers pay for expenses out of pocket. And the repeated emergency calls are stressing equipment like tankers and pumpers not built for continuous use.

On Thursday, one of the Tomball tankers blew a transmission, leaving Hill on the sidelines as the Magnolia fire flared up, cutting across fire lines and highways, and forcing hundreds to rapidly flee their homes. Nearly 100 homes have been lost as a thick haze floated into Houston.

“It’s very frustrating that they don’t have the proper tools and resources to fight these fires,” Chris Barron, the executive director of the State Firemen’s and Fire Marshals’ Association of Texas, told the Fort Worth Star-Telegram. “If fire departments had enough funding, if the forest service had enough funding, we wouldn’t be in this predicament each and every year.”

Texas’ philosophical approach to governing is exemplified by Perry’s attacks on federal overreach. Perry has joined other Republicans in calling for spending cuts to offset any boosts to federal disaster relief funds, which were basically depleted by hurricane Irene. Democrats say they’ll test Republicans’ mettle by introducing a bill to Congress that boosts funding without offsetting cuts.

It’s an uneasy equation. Taxpayers, says Magnolia Fire Chief Vincent Gray, can’t afford to have massive amounts of unused equipment stored at strategic staging points. But given the historic drought and powerful wildfires – the Bastrop fire quickly became by far the state’s most destructive on record – firefighters have managed to corral necessary resources to manage what he calls “an unprecedented situation.”

“We haven’t lost a single life on this fire, so I consider it a success,” he says. Statewide, four people have died in the current conflagrations.

One saving grace has been Texas volunteerism, says an ash-smeared Ray Ruiz, Sr., the Texas Forest Service incident commander on the Riley Road fire.

In Magnolia, volunteers washed the ash-covered windshields of firefighters’ personal trucks. A “firefighter rehab” station was set up, pulling in a football game via satellite. And when a professional firefighter from Houston, Clayton Harris, drove up to Magnolia on his day off to volunteer, commanders quickly put him on a local truck. He spent the day in close combat with a flaring forest first that threatened to jump Farm Road 1488.

“The guys on the truck seemed in high spirits,” says Mr. Harris. “They were out doing their job.”

By Thursday night, the Riley Road fire was 50 percent contained, down from 60 percent containment earlier in the day.

Steve & Anita Shevett From left: Jeremy McCarter, Richard Nelson, Carl Bernstein, Kurt Andersen and Alec Baldwin.

A new play by Richard Nelson, “Sweet and Sad,” opens today at the Public Theater in New York. The play takes place on Sept. 11, 2011 in Rhinebeck, New York, and explores one family’s struggle to find meaning in the attacks, ten years later.

After a preview of the play this week, actor Alec Baldwin hosted a public forum that included Nelson, Pulitzer Prize-winning journalist Carl Bernstein, and journalist Kurt Andersen. While the play largely focused on grief, mourning and the unanswerable questions in the wake of 9/11, the public forum dealt mostly with political questions such as how foreign policy has changed in the past decade, and predictions for the next presidential election.

When Baldwin was asked what he would do to help society if he woke up tomorrow and found himself in charge, he said, “I have the same unshakable view that there are two issues that are linchpins of the problems in this country: campaign finance reform is the linchpin of all domestic problems in this country. We need public funding of campaigns… In terms of foreign policy, energy independence. If we can have not a Manhattan project, which talked about bombs and destruction, but a power project, a positive rallying cry for this country to have real energy independence.”

Nelson, however, echoing his play, steered clear of mixing art and politics. In the program notes to “Sweet and Sad,” Nelson said that the theater is the artistic form that uses the entire live human being as its form of expression. As such, the human is always at the center of the play, and gives the theater experience a point of view that is more moralistic or humanistic than political.

“Art must be a parallel world to politics,” Nelson said in the forum. “Politics often want to use art and there are some artists that push into politics. But I would be passionate that it is a parallel world that is a necessary world. That is why in times of great humanism, you have had great theater. That is why under Totalitarianism and dictators, the theater is often perceived as the greatest threat.”

The date of the September 12 Labor Party primary was chosen unintentionally, but it could not be more symbolic. The party that towered over the country it ran for nearly three decades before it was felled by poor leadership and unrestrained infighting will begin the process of rebuilding itself under a new leader.

Unless none of the four candidates obtains the 40 percent of the vote necessary to avoid a September 21 run-off race, Monday could mark the beginning of the resurrection of the party whose forerunner reached a peak of 56 mandates in the 1969 election and was left with a nadir of eight following its January 17 split.

The new leader will face the challenging task of uniting a party divided by the election, bankrupted by years of overspending, and burdened by its bad image and the unmeetable expectations of its storied history.

Labor has been leaderless since Ehud Barak and four of his allies left to form the new Independence Party. The divorce has been helpful to Barak, who enabled himself to remain defense minister, and to Labor, which immediately received an influx of young members who were turned off by Barak and his perceived hedonism.

A party that until recently was seen as a veritable nursing home looked young and vibrant at Wednesday night’s convention at Beit Berl Teachers College in Kfar Saba. Young activists in T-shirts bearing the candidates’ slogans stood up throughout the raucous forum in the packed auditorium, which was covered with confetti.

While Barak headed Labor, there were no discussions about the party’s ideology. Its platform hasn’t been written since Binyamin Ben-Eliezer led the party a decade ago, and its positions on key issues have been unclear for many years.

Whoever wins will infuse the party with their spirit and their ideology. All four candidates would put more of an emphasis on socioeconomic issues, seeking to take political advantage of the protests over the high cost of living.

MKs Shelly Yacimovich, Amir Peretz and Isaac Herzog, and former chairman Amram Mitzna all have extensive social affairs experience on their resumés.

One of the keys to their success will be whether they can become the political voice of the protesters or whether they will leave the task to future parties likely to be formed by journalist Yair Lapid and former Shas leader Arye Deri.

BUT BEFORE any of the candidates can start thinking about the next general election, they have to face a primary election that can still go in any one of three directions.

The best-case scenario for the party is that one of the candidates obtains the necessary 40% to win outright on Monday. Labor would save the expenditures of another day of voting and be spared the negative attention a divisive, head-to-head race could bring.

The most likely scenario, however, is that Yacimovich will face off against Peretz, her political-mentor- turned-adversary, in a nine-day race that could be nasty. The bad blood between the two may not result in a second split in the party, but it could leave the victor permanently scarred and make his or her job of uniting the party even harder.

The third possibility is that between now and Sunday night, Mitzna will give in to tremendous pressure to quit the race and follow the lead of venture capitalist Erel Margalit, who exited the contest and endorsed Herzog on Wednesday.

Several current and former Labor officials are expected to warn Mitzna over the weekend that his insistence on remaining in a race that he cannot win could result in him crowning Yacimovich, whom he slammed in a sparsely attended Jerusalem parlor meeting this week.

He blasted her for having nothing to say on key issues like diplomacy, security, education, and the separation of religion and state. He belittled support for her as “trendy” and compared her to the Pensioners Party, which won seven seats as a political fad.

“Her record in the Knesset is impressive, but chairman of the party?” Mitzna asked. “Has she in her life managed more than two people? If you have a business, do you want the person who runs it to be someone who has run something in the past? If you have a fancy car, would you trust it to someone who has never driven before?” Mitzna said that Yacimovich “has a problem working as a team,” and mocked the age of the MK, who at 51 is 15 years his junior.

“Little by little,” he said. “You are a young lady. You still have time.”

Mitzna resisted three weeks of pressure to back Herzog, and his speech to the convention was especially defiant, leading Labor officials to believe he will stay in the race until his bitter end and quit politics as a tragic figure with unmet prime ministerial potential.

On a visit to Yeroham in December, Labor’s elder statesman Ben- Eliezer urged Mitzna to run, and even said that “only Mitzna can save the party.” But since then, Ben- Eliezer has maintained neutrality, and he never gave Mitzna the boost that he needed to win.

One Labor official described Mitzna as suffering from the trauma of his decisions to quit the Labor leadership and then the Knesset. The official said the former general wanted to go down as a fighter and not be remembered as a serial quitter.

Another explanation is that Mitzna believes that endorsing a candidate would harm his chances of latching on with another party ahead of the next election. It is possible that he would rather be Lapid’s No. 2 than Yacimovich’s.

If Mitzna surprises and leaves the race on Sunday, Herzog would receive a boost that could propel him to a second round of voting against either Yacimovich or Peretz.

Since he lacks the political foes that the two of them have, Herzog could unite Labor’s leadership against either of them and win.

No matter which of the three scenarios plays out, eight months of political purgatory for the Labor Party will end this month, and its rebuilding will begin. The test that will determine whether the new leader can succeed will be whether he or she can unify Labor the way America banded together the day after September 11 a decade ago.

 Ten years ago, in the days, weeks, and months after Sept. 11, 2001, the country and government came together. Democrats and Republicans worked together to ease a scared nation, but also out of fear that not doing so would get them labeled unpatriotic. Bipartisan approval for the wars in Iraq and Afghanistan reigned. You rarely heard the word “deficit,” and money was poured into not only those wars, but to build the Department of Homeland Security.

Now, the government is bitterly divided. What happened?

Sen. Charles Schumer, D-NY, took to the Senate floor Thursday to call for a return to the bipartisanship and cooperation after Sept. 11.

“What we were able to achieve then in terms of common purpose and effective collective action provides us with a model for action that we in Washington must strive to emulate and even if just in part, even if just sporadically to re-create,” Schumer said.

On issues like the $20 billion aid package to New York, the controversial Patriot Act, or approval for the wars in Afghanistan and Iraq, both sides of the aisle gave a green light.

“To his credit, President Bush did not for one second think about the electoral map or political implication of supporting New York. He asked what we needed and he came through,” Schumer said. “If, God forbid, another 9/11-like attack were to happen tomorrow, would our national political system respond with the same unity, non-recrimination, common purpose and effective policy action in the way that it did just ten years ago? Or are our politics now so petty, fanatically ideological, polarized and partisan that we would instead descend into blame and brinkmanship, and direct our fire inward, and fail to muster the collective will to act in the interests of the American people?”

From the Age of Terrorism to the Age of Austerity and Division

In what she calls a “backhanded compliment to bipartisanship,” Karlyn Bowman of the American Enterprise Institute says the American public gives high approval to both George W. Bush and Barack Obama on their handling of terrorism.

“What’s absolutely clear is in a time so critical of Washington, the public has given high marks to the presidents of both parties — George W. Bush for making the country safe and they gave Barack Obama high marks for keeping the country safe,” Bowman said, who recently authored a study “The War on Terror: Ten Years of Polls on American Attitudes.”

With the economy being the number one issue on Americans’ minds, Bowman says terrorism has receded significantly as an area of concern.

“I think terrorism wouldn’t recede as an issue if they didn’t feel the government made them safe,” Bowman said.

But what about the dynamic between the president and congress?

James Lindsay, senior vice president of the Council on Foreign Relations, worked at the National Security Council during the Clinton administration. He says the attacks of Sept. 11 “triggered a dynamic as old as the American Republic.”

“When the country is under attack and facing a national crisis, power gravitates away from Congress to the president, partly because Americans believe that during times of crisis strong leadership is needed,” Lindsay told ABC News. “Also, during times of crisis it’s politically safe to rally behind the president. They fear any critique of the White House is taken as an unpatriotic act. That rally around the flag gives enormous power to the president and that power persists as long as the crisis persists.”

UK banks have been told they should ring-fence retail banking from more risky investment operations What is really going on with the Vickers Report?

The Vickers Report has come out on the radical side of what was expected in terms of structural change for the banks and on the conservative side in terms of timescale.

But the real action now is political: George Osborne has praised the report, accepted the timing, but not yet the detail.

What the banking lobby tried to do was to;

a) fight the ring-fence proposal;

b) fight the capital adequacy proposal;

c) divert the whole debate into one about competition ­in which they were encouraged by the inclusion of Clare Spottiswode, serial competition guru;

d) nobble the whole project, last minute, with the inclusion of two further criteria in the Vickers committee’s remit, namely: does it harm the UK economy, and does it harm the UK’s tax take.

Economic impact

The banks will go on fighting the substance. Jamie Dimon of JP Morgan has said today that the USA should pull out of the key international treaty ­Basel III ­that the Vickers proposals are built on.

But on the “nobbling” issues, will the banks flee Britain, harming our global competitiveness and punching a permanent hole in the UK budget?

Sir John Vickers said the report was “fundamental and far reaching”

Vickers has put reasoned arguments against – the effects on the fiscal position would be complex, but should be strongly positive and any economic impact resulting from the effects of its proposals specifically on UK competitiveness, including that of the City, should be broadly neutral ­or positive, especially over the longer term.

Both these positions will be disputed by the banking lobby and will form the terrain of an argument within government now between Vince Cable, who wants the whole thing and legislated fast, and a variety of people who will argue for a further delay while the competitiveness argument is rehashed.

To be clear, Vickers says the UK banks will suffer in competitiveness terms, but that this is not a major problem for the UK economy.

If banks were fishing fleets this would be a done deal: visit Hull to see how much governments have cared about fishermen, when balanced with whole economy issues.

But the banks have, especially under New Labour, become used to dictating policy on banking. The terrain of their rearguard action is clear – reput the argument that this will harm UK competitiveness and enlist the Bank of England’s financial stability chief to argue for maximum delay.

Failed system

However there is one problem – markets. Markets will price in any regulatory reform immediately they think it is going to happen. They are already pricing in Basel III, and financial institutions’ behaviour – as good corporate citizens – is generally to stay ahead of the regulatory curve to become compliant in advance.

Whatever the legislative timetable, once the Conservatives make clear they accept the full rationale of Vickers (and by the way Labour, who have been a bit quiet on the whole issue, possibly remembering the famous Ed Balls speech where he said his whole mission was to enhance the competitiveness of UK banking) ­the markets will force the pace.

This, implicitly, is what Vickers is trying to do, to call the bluff of Barcap ­- does it move to America? Call the bluff of Standard Chartered and HSBC in their various threats to move offshore. Does he, in other words, manage to get the market to reshape itself voluntarily.

Of course there is more to say. Vickers only patches up one part of a failed system. A whole systems approach would look at hedge funds, consumer finance, the role of long-term wage stagnation.

But the politics is where it is at right now.

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