Monday, October 18, 2010

Politics laid bare

The New Yorker has a profile of Harry Reid which provides a vivid illustration of just how dirty the business of politics and government is. Eyebrows are first raised in the article when it is revealed that "most establishment Republicans in Nevada [are] backing Reid over Sharron Angle." Well why would that be? This anecdote probably provides a clue:
CityCenter, a vast new casino and shopping complex on the Strip, is the largest private building project in the history of North America. In 2007, its primary owner, MGM Mirage, took on Dubai World as a partner. With construction well under way and five billion dollars already sunk into CityCenter, the crash of September, 2008, hit. Dubai World sued MGM, and then the banks collectively announced that because Dubai World had sued they no longer had to honor their own obligations.

Harry Reid called Jim Murren, the chief executive of MGM, to offer his help. “I asked him to call Ken Lewis of Bank of America, Jamie Dimon of J. P. Morgan, John Mack of Morgan Stanley, and I’m sure he did,” Murren told me. “Everybody in the Nevada delegation called, but there’s only one Senate Majority Leader. That’s the call that got returned.” When a contractor needed a two-hundred-million-dollar payment in order to continue construction, “Reid called, the banks released the money, and we kept constructing.”

Murren, a Republican, appeared in the first television ad the Reid campaign ran this year, saying that Reid had saved twenty-two thousand jobs in Nevada with his calls to the banks. MGM is not just Nevada’s largest employer and taxpayer; it is proportionally among the largest single taxpayers in any state, supplying eleven per cent of the budget of Nevada’s government. Murren told me that Sharron Angle has never tried to meet him. She has said that she would not have made the calls that Reid made on CityCenter’s behalf.
Now, how do you think that phone call from Harry Reid to the banks went? Did they release the money because Reid asked nicely and used the word "please"? Or was it that -- just maybe -- he used his position as an extremely powerful politician to threaten and cajole the banks, promising swift retribution (and perhaps rewards as well) if they played ball? Which is the more likely scenario?

Meanwhile, did the banks initially withhold the money because they enjoy being mean and wreaking destruction upon the land? Or was it a business decision (i.e. economically logical and sound)? If it was a business decision, then why should we think that Harry Reid has a greater level of business acumen than those who actually operate the business? But of course business sense had nothing to do with it, it was all about making the politically expedient move that will play well with campaign contributors and the voters.

While I have my doubts whether Sharon Angle would have actually refused the make a similar call -- she is still a politician after all and faces a politician's incentive structure -- at least her sentiment is admirable. The more I learn about this woman the more I like her. If a high regard for the Constitution, free market and refusal to cater to the establishment makes her a circus sideshow, hey, bring on the freaks.

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