Tell the truth, tell me who's been foolin' you...

Let’s see if we can figure out which of these things is the good news to take away from the ransoming of the economy to the tri-corner hat-wearing demagogues and self-satisfied dismantlers of the abiding social compact in place since the New Deal, shall we? 

·         The republicans are declared the winner in the prolonged and highly questionable debt ceiling fight by the media in general and the entire staff of Faux News, who are literally red-faced with enthusiasm and bursting with hyper-active fervor.   I think I could actually see that Sean Hannity had an erection when he talked about how Obama’s spending has “gotten out of control” over and over again.

·         A clear majority of economic observers – governmental, academic, and, oh by the way, Wall Street - predict that the “solution” included in the settlement - to cut spending to reduce the budget deficit - will make the economy worse in the absence of any additional revenue generation.   As government spending is currently 40% of GDP – and has been over 30% since 1960 – this unfettered and unfocused slashing of spending at a time when consumers are dazed and disheartened is bound to reduce overall GDP growth to levels even worse that the barely-breathing 1.3% in the first quarter.

·   On August 4, the Dow Jones industrial average falls over 500 points, the largest one day decline in nearly three years and the 9^th largest on record.  It seems pretty clear that the flinty-eyed investment community – with not a bleeding heart among them – doesn’t think this is a good thing.

·  In a profoundly unsettling report the same day, it was reported that sales at thrift and second hand stores have gone sky high, with Goodwill Industries opening a 19^th store in the Bay Area to handle the increased demand for everyday goods. 

· Meantime it was also reported that sales of luxury goods by retailers such as Nordstrom, Neiman Marcus, Tiffany’s and Mercedes grew 12% in the last reporting period.  Mercedes reported sales of its SUV model increased by over 22%.

· Perhaps not coincidentally, 46 million Americans are now on food stamps.

· 37,000 public positions were reported lost in the jobs report today as a result of a drastic reduction in government spending with more to come and no end in sight.   577,000 public sector jobs have been lost since 2008, 224,000 of them teachers.   

· Other economists noted that corporations remain highly profitable, stocked with cash, and can hire when needed. They're waiting for customer demand to come back in force.

· The economy is still too weak to produce the 250,000 new jobs a month that it takes to bring down the unemployment rate quickly. 

So let’s break it down; consumers who have lost jobs, all the equity in their houses, most of the value of their 401k’s and college savings plans, and have had no real increase in wages since the 80’s, are supposed to continue to spend what money they do have left to support the economy .  If they don’t, the political reaction might well be additional calls to cut the budget deficit more by limiting spending even more until they are caught in a vicious and remorseless death spiral that can only end in a Hindenburg-like crash and burn.  Oh, the humanity…

The most inexplicable part of this is how it is being sold politically to the very people who are most likely to be strapped into the seats, screaming in terror as it goes down.   It’s some kind of strange brew of religion, patriotism, fear, racism and contempt for authority tossed in the blender of the almost frantic and incessant media and information barrage that hammers at the psyche until all that’s left to do is let out a primal scream, curl into a ball and pull the covers over your head hoping it goes away. 

 Yet it seems to me that organizations like Moveon.com and other progressives have made about as much progress winning the hearts and minds of these people as we’ve made doing the same in Afghanistan.  The word “Liberal” has become a powerful pejorative – like nigger.  To most of the “Reagan” generation that word has come to characterize powerless, ineffectual, anti-American immigrant sympathizers who want to take their money and give it to shiftless, welfare mothers who don’t speak English, yet sit around all day watching TV.   

They'd rather embrace some mythic version of America sold incessantly by the popular culture - a version increasingly out of their reach.  And of course the intelligencia of the right are all too happy to exploit these feelings, particularly in light of a black president – a democrat - trying to deal with a profound and historic economic crisis by using the power of government.   This is anathema to everything the republican party has been fighting against since LBJ.  And somehow they’re winning the philosophical battle in spite of their clear culpability in creating the very situation that they have tried relentlessly to pin on Obama. 

 It just doesn't make sense.  It's akin to that helpless feeling you get in a dream of falling; you know what needs to happen but are powerless to do anything but fall, tensed up and waiting to hit the ground.