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Not Quite A Tour De Force But Obamas Overseas Trip Will Worry Mccain

Introduction

WALL STREET delivered its verdict on the Obama victory by dropping nearly 500 points on Wednesday. It wasn't personal: investors aren't afraid that Barack Obama will nationalise the commanding heights of the economy or tax the rich till the pips squeak. The markets were more concerned about the collapse of corporate profits, the continued difficulties in inter-bank lending and, well, shit just happening everywhere. We're back into the spiral of decline. In America right now, everything is going wrong that can go wrong. The banking bail-out hasn't worked yet and doubts are growing as to whether it ever will. Huge companies such as Ford and General Motors are in their death throes as American manufacturing gives up the ghost. Unemployment is mounting fast, small businesses are going bust by the thousand, the public sector debt is now $10 trillion and rising as economic output falls and tax bases shrink. The only good news is that America's arms industry remains in rude health, thanks to the two ruinous wars being fought abroad, and that isn't good. The problems are colossal, and Barack Obama hasn't got a lot of time.

The Need for Economic Truth and Accountability

Commentators who babble about the first 100 days forget that George W Bush remains president for most of them. Last August, people were saying that the "worst is over" and the worst hadn't even begun yet. By the time Obama's daughters get their new puppy in the White House, America could be facing not just recession, but economic depression. The collapse of international trade, as registered on the Baltic Dry shipping index, and long-term bond movements all suggest a very deep and long-lasting recession. The volatility of the stock markets is a sure sign of a very serious economic dislocation. The Great Crash of 1929 wasn't a one-off event, but a series of stock market shocks that culminated in the panic of 1932. In the meantime, the Bush administration will be emulating the Germans in Berlin in 1944 as the Allies approached - shredding incriminating documents and paying off as many of its friends as possible. A lot of the $700bn bank bail-out money will have disappeared into obscure corporate accounts by the time Obama's people get to open the books. Most of those responsible for the greatest economic crisis in modern history will have parachuted safely to their retirement havens and will spend the Obama years blaming the new president for the mistakes they made. This must not be allowed to happen. The first thing Barack Obama should do is hold an economic truth and reconciliation process. American needs to know exactly what has gone wrong and who is responsible so that nothing like this can happen again - at least until the next time. Bankers, treasury officials, bond traders, hedge funds managers, financial "rocket scientists" and mortgage brokers need to be brought out from their lairs and into the blinking light of public accountability. This isn't just a blame game - though it is that. The whole occult process of financial manipulation needs to be demystified. Most politicians still don't know what an SIV is, or a "put option", or how naked short-selling works. As Roosevelt said when he took over in 1932, we must put an end to speculation in other peoples' money. But, first of all, we have to understand exactly how they went about doing it, using all those algorithms and stochastic financial models which it turns out nobody really understood anyway. Once this process is underway, it will be a lot easier for America to withstand the coming economic shocks and to accept the really hard measures necessary for economic reconstruction.

The Environment and Economic Reconstruction

Obama's hands are going to be tied, of course, by the colossal public debt - 80% of GDP - that he'll inherit from George W Bush. Despite the recent extraordinary rise of the dollar - largely a result of hedge funds liquidating foreign assets - there is a very real possibility of a loss of confidence in the currency if debt continues to spiral out of control. Before we lapse completely into negativity and doom, let's look at one of the areas in which Barack Obama will almost certainly succeed: the environment. Why? Because the severe economic recession will inevitably cause a rapid reduction in greenhouse gas emissions as manufacturing and transport seizes up across the country. You can see this already in the collapse in the price of crude oil, down nearly 60% from its summer high. There should, therefore, be no difficulty in meeting medium-term emissions targets, making it a lot easier for Obama to endorse the Kyoto process and even assume leadership of the battle against climate change. Obama needs to use this "warming window" to re-engineer America's, and the world's, economy to evolve away from fossil fuels, which, anyway, have only a decade or so left in them before peak oil starts to kick in. Never has there been a better moment to introduce a new electric "peoples' car" for example, now that Americans have finally turned their back on gas-guzzling trucks. But while the greening of America may be a new frontier for Obama, back home the ranch is still burning down. The economic catastrophe will have to be addressed somehow. Some 10 million Americans are in negative equity and millions will shortly lose their homes. Property was the root cause of the economic catastrophe. There's nothing that Obama can really do about falling real estate, except try to put a floor down to the slump by helping as many people stay in their homes as long as possible.

The Impact on Hotels

As the economic crisis continues and more people face financial difficulties, the hospitality industry, including hotels, may also be affected. With unemployment rising and small businesses going under, fewer people may have the ability to travel and spend money on hotel accommodations. This could lead to a decline in hotel occupancy rates and revenue.

Hotels that heavily rely on corporate bookings may also face challenges as companies cut back on travel and expenses. Without a booming economy, corporate travel budgets are likely to be reduced, impacting the hotel industry. Additionally, conferences and events may be canceled or scaled back, further affecting hotel occupancy rates.

However, it's not all doom and gloom for hotels. As the article mentioned, the greening of America and the emphasis on the environment may provide new opportunities for the industry. Hotels that prioritize sustainability and offer eco-friendly amenities may attract socially-conscious travelers who are interested in supporting businesses that align with their values.

Furthermore, as the economy begins to recover and people start to regain their financial stability, the demand for leisure travel may increase. Hotels that focus on providing unique experiences and cater to the changing preferences of travelers may be able to thrive in the post-economic crisis era.

In conclusion, while the economic crisis may present challenges for the hotel industry, there are also potential opportunities to adapt and attract customers in a changing landscape. As the economy recovers, hotels that prioritize sustainability and offer personalized experiences may have a competitive edge in the market.

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