Financial Wizards and Economic Prophecy - 24 August 2001

There were several events, happenings, in America this past week that could echo - or, to use the chic word, resonate - around the world, none more audibly than the announcement after a study conducted by the New York Times that the economic slump the United States has been suffering from during the past eight or nine months is not an American epidemic but is the most striking example of what is now a pandemic - a worldwide decline.

Put simply and drastically, the lead sentence of this report goes: The thirty-three-trillion-dollar world economy, which grew at a raging pace last year, has slowed to a crawl in the United States, Europe, Japan and some developing countries. Many regional economic powers - Italy, Germany, Mexico, Brazil, Japan, Singapore - have become economically stagnant, more so than at any time since the oil shock of 1973.

There are competing ways of interpreting this bad news, and I cannot recall a time when the economists, financial wizards and plain (they are usually pretty!) stock-market commentators on the telly were so busy trying to unravel the knots they are tying themselves into in order to tell us why it's happening and why it's not necessarily bad news.

Since 1870, there have been in this country seven big booms and subsequent busts. There were thousands of economists and historians the world over, several schools, who told us confidently after the event why they happened. This is known as Monday-morning - or 20:20 - hindsight.

There is no economist, from Adam Smith to John Kenneth Galbraith, Milton Friedman or Robert Mundell, who can tell you with any credibility whatsoever what is going to happen and why. Surely this is a topic that deserves most serious discussion - and without doubt it's going to get it, from many wise men and a few wise women. (There are fewer women economists than men because most women have the sense to go into money-management and stay clear of the dubious profession of economic prophecy.)

But you'll gather that no light on the subject is coming from this quarter. Apart from a sense of incompetence, I leapt in relief this week to a topic which didn't exist until Wednesday evening, when a famous and most influential senator appeared before a microphone in his native State of North Carolina and announced that he will not seek re-election next week - in a word, he's going to retire - an announcement greeted with a vast sigh of regret from devout conservatives everywhere in the United States and a shout of jubilation from liberals all around the globe.

I'm talking about the incorrigible, the incomparable - some say the insufferable - Senator Jesse Helms. He was - until the defecting Republican from Vermont threw control of the Senate to the Democrats, Senator Helms was, and for many years, the Chairman of the Senate Foreign Relations Committee, the most influential of all chairmanships since the Constitution puts on the Congress both the war-making power - the money for its conduct - and the power to withhold the Senate's consent to any foreign treaty or documentary foreign agreement the President wishes to seal. Senator Helms was brother-in-arms to the past three Republican Presidents and a thorn in the side to every Democrat in the White House, or any other house.

He achieved world fame - or infamy - as the pioneer rebel against the United Nations, putting up the outrageous proposal to suspend United States payments of its annual dues. Now, for many years it was the Soviet Union that fell behind, as a way of publicly showing offence at one or other - usually most - United Nations resolutions, especially every one of the Security Council's calls to arms against any act of aggression. For years and years, the most dependable sound in the councils of the United Nations was the Soviet delegate saying, "Nyet!" - "No!"

Well, Senator Helms was not alone in his frustration over the UN's continuing inability to perform the main task it was created for; and a year or two ago he looked into its financial records. First, he discovered what few people on the outside knew and no reporters ever reported about - that the United Nations, like many bureaucracies, was grossly overstaffed; secondly, that its finances were not only complicated but in several ways chaotic. He convinced enough members of the Congress that not least of the outrageous features of the UN was the American proportion of the total dues. There are now over a hundred-and-eighty member nations. Since the birth of the UN, the United States has been required to pay twenty-five per cent of all the dues - at least so it did until Senator Helms managed to get them reduced.

Eventually - an incredible end to his auditing experience - he was recently invited to be the guest of honour at a dinner given by the Secretary-General.

I think the United Nations imbroglio or brouhaha is over. Anyway, at Senator Helms' prodding, the whole financial structure of the United Nations has been rebuilt, the staff decently slimmed and American support guaranteed, especially for its attempts to keep the peace, to aid refugees and to maintain its twenty-four-hour watch at Geneva on the global threats to health that have come in the wake of jet travel.

Few Americans discuss the United Nations when they talk or think of Senator Helms. Domestically, they watch the bonfire he's made of several of the burning issues of the past thirty years - as long, that is, as he's been in the Senate. He was for many years a journalist, then a radio journalist, then a city councillor and then a busy hospital trustee and campaigner for treatment of cerebral palsy. He went to the Senate when he was over fifty; he's now seventy-nine and heir to many ills of the flesh. A deacon of the Baptist Church, he has always been firmly against abortion. He has never wavered from the fundamental faith and, without any reservation, considers homosexuality, in the words of Leviticus, "an abomination before the Lord". He interprets the second amendment of the Bill of Rights as permitting every citizen to own a gun. He was - he has been over a lifetime - at ease and fairminded with blacks, both as friends and employees, but suspicious of most of the devices, like busing and affirmative action, in achieving integration. He was once and is for all time against Communism anywhere, and he was so late as 1996 the author of a Bill, successfully passed, which deprived the President of his power to lift the trade embargo against Cuba.

There is one power constitutionally possessed by the chairman of the Senate Foreign Affairs Committee which even his Republican colleagues agree Senator Helms has used ruthlessly. It's the power - implied in the Senate's right to approve or reject foreign treaties - to block a President's nomination of ambassadors and other diplomatic appointees. In the American memory, no chairman has exercised this power so unflaggingly. He thought of himself as the gate-keeper at the entry of those who would represent the United States abroad. He was always on the look-out for an appointee who was perhaps too liberal, had dealt too kindly with the Soviet Union, whose private life was perhaps not as God-fearing as Senator Helms could wish. There were times when a hundred or more diplomatic offices throughout the world, including ambassadorships, went unfilled for months - even years.

Of course, to most members of Congress, including moderate Republicans, this was intolerable - but the Constitution tolerates it; and there was a movement, never acted on, to strip the Senate's power to do this. It would require a constitutional amendment, and that takes years and years, with the odds against.

In the end - indeed, throughout his entire thirty-year career in the Senate - there were two views of Senator Jesse Helms. One: that he was a deeply-convinced Christian conservative, never a hypocrite, totally sincere, forthright, never devious, brave against general mockery, firm in his beliefs about right and wrong. The opponents' view was that he was a born bigot, a homophobe, a woefully old-fashioned, riproaring, parochial Southern isolationist who, as the New York Times puts it, "has done more in the modern era to buck the tide of progress and enlightenment".

However, he had one quality which the general public was unaware of and which always amazed freshmen senators, who expected to confront a fuming ogre but every morning, at the opening of the Senate, were greeted by a smiling, gentle man who might have been everybody's favourite uncle. He was courtly, impeccably courteous to friend and foe. His chief opponent and successor as Foreign Affairs Chairman, the Democrat - of course - Senator Biden said of him: "He is the most thoughtful, most considerate, most gracious senator I have ever known."

I covered, reported, watched Senator Helms for many years and long ago came to see, if you saw him close and often, that whether you thought his policies brave or woeful, that he did have this quality - a quality that our old friend H L Mencken demanded of anyone with whom he was going to have a political argument - quote: "What I admire most in any man is a serene spirit, a steady freedom from moral indignation, what is commonly called good sportsmanship. When he fights, he fights in the manner of a gentleman fighting a duel, not in that of a longshoreman cleaning out a waterfront saloon. He assumes that his opponent is as decent a man as he is, and just as honest - and perhaps, after all, right."

At the end of his life, Mencken added an afterthought. This virtue, he claimed, seemed to exist only in the best kind of conservative. "The trouble with liberals," he muttered, "is that they get mad when you don't agree with them."

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