FOR the second day of Eid, Oct 2 was shockingly dreary and listless. Most Eid greeting text messages received lukewarm, and in some cases outright cold, replies replete with remarks that bordered on unremitting cynicism.

With bombs and bullets doing the talking and knives slitting throats, friends and acquaintances ridiculed even a semblance of celebration and insisted on maintaining a resolute calm.

As the day advanced towards the afternoon, the forced stupor was pierced by the news of a suicide bomb attack on the guesthouse of ANP leader Asfandyar Wali. The terrorists had finally succeeded in their designs. They were aiming to hit where they knew it would hurt the most and that place would be no other than Pushkaravati, the modern Charsadda and capital of the ancient Gandhara civilisation. Charsadda had another distinction; it was the birthplace in this part of pre-partition India of the non-violence movement led by Khan Abdul Ghaffar Khan, Asfandyar’s grandfather.

With its vast and beautiful countryside resplendent under the spell of millennia of meditation and a fast-ripening sugarcane crop, Charsadda need not have posted sentinels in the presence of towering poplars. But there was no stopping the modern-day terrorists who consider history, tradition and culture anathema to their brand of religion and are battling them all at one time. They had done it before on an Eid day last year, killing and maiming dozens of those found guilty of praying alongside Aftab Sherpao at his village in Charsadda. Both Sherpao and Asfandyar Wali survived but it would seem only just.

The patriarch of the present provincial government, Asfandyar Wali seems to have been unnerved by the attack. His initial reaction was one of a wounded lion but his subsequent conduct left much to find fault with. This couldn’t have happened at a more inopportune time. The militants had trampled on too many toes and deprived many of their bread and butter. ‘Uprising’ is the call of the day and more and more people are rallying to the call in earnest. Even strong protagonists of a dialogue with the militants have been observed appreciating the willingness of the masses to take the enemy head-on. The ANP leader would be the ultimate choice of the tormented masses to lead from the front. The ANP could be billed for many sins but this party of the great Khans has not yet been faulted for timidity. Unfortunately, however, the events unfolding in the aftermath of the latest Charsadda attack suggest a departure from the path of the past.

The voracious appetite of the enemy could be one reason. But even long before the attack on Asfandyar Wali’s household, the powers that be were doing little that could inspire confidence in the public. By building roadblocks, walling thoroughfares and barring the public from public offices, the state apparatus seems to be surrendering one territory after another to the terrorists. Terrorism thrives on fear and fear is what we are trying to spread by denying access to the public. The closure of roads and avenues around the seats and symbols of governance is akin to tightening the noose around those seized with the task of governance. In the process the government seems to be insulating itself from the public with an irreparable loss to its image in the popular perception.

“The ways of bureaucracy are wonderful,” wrote Dervla Murphy in her riveting travelogue, Where the Indus is Young. In a dozen countries that she visited, the intrepid travel writer solemnly inscribed fictitious passport numbers in the appropriate columns without ever suffering any ill effects. Ms Murphy’s witty impressions suitably reflect the scene in Pakistan. Entrances to the corridors of power are under close surveillance but who knows how many Ms Murphys and her male equivalents might be penetrating the apparently unbreakable walls of security day in and day out and then making fun of this entire hullabaloo that we make about our conceited efforts.

The ultimate sufferers nevertheless are ordinary folks. More than 160 million people inhabit this country. They have to move from one place to another. How could we limit or curtail their movement from home to work and back, to hospitals, bazaars and schools, and to a lesser extent to parks and public places of amusement, if there are any left.

The situation in Peshawar is particularly fragile. Peshawar has grown in every direction in such a manner that nearly all roads to various parts of the city, the university area and onward to Hayatabad township lead through the cantonment. The military cantonment itself houses the civil secretariat, the accountant general’s office, the telephone, gas and Public Service Commission offices, as well as the old Edwards College. Thousands of people frequent these places on essential errands.

Unsavoury incidents are a routine sight on the roads leading to these institutions, with dozens of motorists arguing with the sentries every minute of the day. The sentries’ dilemma is that they cannot deny access to any motorist since that would necessitate pushing back all the vehicles taking up the rear. Any mishap during such interruptions could be catastrophic and to the liking of the terrorists. There is no way this situation can be wished away unless all city residents disappear from the scene.

Fortunately, however, both the military and the civilians have realised how badly they need each other to outwit the joint enemy. All these roads, presently leading to nowhere, must therefore be reopened to set the direction of the war on terror right. Asfandyar Wali can lead the way in his red cap.

ONE hundred years ago today (Oct 15), one of the intellectual titans of the 20th century was born. Had the warnings issued by JK Galbraith up until his death two years ago been better heeded by the policymakers of today, it seems unlikely we would find ourselves so deep in the economic mire.

A lifelong liberal who advised successive Democratic presidents and presidential candidates, Galbraith ceaselessly warned of the dangers of financial excess. In his extensive writings — most famously The Great Crash 1929 — Galbraith described the common events that precede and accompany particular financial crises, events that are conveniently forgotten by politicians, regulators and their advisers in the good times, when financial deregulation takes grip.

Galbraith, like Keynes before him, identified the instability of modern capitalism in terms of the drive to accumulate excessive wealth and the fragile nature of the financial system. As Galbraith remarked, all stock market bubbles exhibit “seemingly imaginative, currently lucrative, and eventually disastrous innovation in financial structures”. Galbraith argued that an unfettered, competitive capitalist system, operating on pure free-market principles, was inherently cyclical and unstable, requiring robust regulation and active government.

Starting with the tulip bulb mania in the 1630s, bubble after speculative bubble has been erased from the popular memory: the South Sea bubble in the early 1700s; the Mississippi bubble, which caused a stock market crash in 18th-century France; the Florida real estate bubble in the 1920s; the stock market crash of 1929; the stock market crash of 1987; the Nikkei bubble, which began in 1991, and the Nasdaq bubble of 2000. These episodes share a theme: a perceived fundamental change in the economy arouses euphoria and heightened expectations of return, leading to excess, fraud and collapse.

This pattern underpinned the folly of sub-prime lending. The expansion in business activity feeds entrepreneurial and speculative behaviour in the financial sectors. It drives monetary innovation and the new forms of financing structures that are contrived to allow firms to participate in the boom.

Heightened expectations stimulate a credit boom, with the banking system keen to cash in on the new situation. As Galbraith remarked in his book, Money: “The banks, needless to say, provided the money that financed the speculation that in each case preceded the crash.”

As Galbraith and Keynes before him warned, such speculation inevitably leads to euphoria or overtrading in which rising asset prices encourage speculative excess. As debt accumulates, soon it can only be serviced by the issue of new liabilities. As long as the financial markets are booming, it is possible to sustain low levels of cash inflow by issuing new stocks and securities to finance current liabilities. But when the hangover comes it hits hard.

When the financial markets slow their expansion, organisations that have covered their future liabilities through issuing more debt are forced to sell assets to meet their liabilities.

The flurry of action by governments and central banks around the world in recent days suggests that Galbraith’s works have finally been pored over by politicians. The experience of the 1930s must be avoided. On the 100th anniversary of Galbraith’s birth, his words matter more than ever.

— The Guardian, London