Dubai: When the Going Gets Tough, The Tough Find Scapegoats

As is typical in a crisis, there is an urgent need to find those responsible.

If we can identify those guilty of creating this crisis, we can not only mete out suitable punishment for this sin but also in so doing prevent future transgressions.  And sins these are if one looks at the scathing rhetoric in the press about integrity, responsibility, maturity, and so on. 

It appears to be a general law of nature, at least of human nature, that  such inquiries are best conducted far from home.  There is nothing more comforting in the midst of tribulations than finding out that one's misfortunes are someone else's fault.  Discovering one's own role in the debacle would be to needlessly pile sadness upon disaster.  

So far the culprits have been identified as:

1. Misinformed journalists distorting and exaggerating a non-story.  It's really not a problem at all.  This elegant solution neatly simplifies the whole exercise. 
   
2. Panic prone investors. The over reaction theory.
   
3. Imprudent, incompetent, and perhaps even shifty borrowers.
   
4. Alleged sober bankers and investors who thought they had a guarantee from Dubai.  Titans of finance unable to distinguish between legal entities.  Who thought an imagined guarantee (implicit guarantee) was the same as a real one.
   
5. Abu Dhabi who these self-same sober bankers and investors were sure was the guarantor of last resort.  Well, the Sheikh there is rich and he's next door and never said he wasn't a guarantor, so he must be.
   

In this noble endeavor, one's ideology is often a  highly useful forensic tool in expediting identification of the culprit and his accomplices - both the witting and the unwitting.  The fellow travelers and the dupes.

Today I saw that a new suspect - Islamic banking - had been picked out of the line-up.   Here's one example from the less conventional press (Counterpunch).

The confusion as Sh. Mohammed might say is between the instrument and the person wielding the instrument.

A chap in a Saville row suit making a bone-headed loan or investment according to Western principles is no different than a chap in a thaub and ghutra doing the same thing according to "Shari'ah" principles.  A suit against the government in Dubai (and many other places) has probably the same probability of a decision against the government - whether the suit concerns "Shari'ah-based" or conventional financing. 

In any case, I guess we can take some small comfort that Acorn has yet to be blamed, though there is still time.