In general, it seems that the country is losing even that marginal social cohesion, such as it was, that existed during the "heyday" of the Bush Administration. This "tea bag" stuff, borrowed by right wing zealots from wholly inappropriate sources, such as the Sons of Liberty and Thomas Paine, is an ominous sign. Egged on by the modern-day Father Coughlins, Rush Limbaugh and Glenn Beck, a kind of free-form and omni-directional rage is being stirred up. I imagine (based on some close-in anecdotal evidence) that the members of this "movement" are the disaffected Evangelicals and unemployed millions who used to align themselves with the Republican Party, but the GOP is falling completely apart.
So, nature -- and the political world -- abhor a vacuum. One might think, as a rational person, that those hundreds of thousands of American workers added to the unemployment rolls every month might naturally see that if they have a common enemy, it's the "financial sector" of the economy. That's where the collapse started - AIG, Goldman Sachs, Bank of America, Bear Stearns, et alia. Those are the companies who played all the games with America's mortgage market and set the world's economy, integrated so tightly through "globalization" of finance, on the path toward destruction. But, of course, that's not what happens here in America. That would be logical, natural, even appropriate, so we can be sure nothing like that is going on. Instead, the "tea bag" movement and Right Wing agitation in general, centers around the "Socialism" of Barack Obama. One might search high and low for evidence that Obama is a Socialist and never find a thing. He wants to raise the top income tax rate from about 36% to 39.6%, or where it was during the Clinton Administration (and much lower than during the Reagan Administration). This will be accomplished simply by allowing Bush's tax cuts to expire on schedule; it would be far too sophisticated an argument to point out to the pitchfork wavers that Bush built a sundown into the tax reductions so he could dishonestly argue that his future budgets would be "balanced." Bush intended, however, to avoid sundowning (and balancing) by extending the same tax cuts, counting on the short attention span of his subjects to get away with his complete inconsistency.
That doesn't help Obama, because for the Tea Bag Brigades, 39.6% is Socialist and 36% is right where God intended the top marginal rate to be. Or something like that.
I would think that Prez O is not having that much fun. The subject matter of his Presidency - a disintegrating economy - manages to be both painfully boring and scary as hell all at the same time. The central question on which everything will depend remains unanswered. America's financial situation, as Gore Vidal said recently on Real Time, places it "somewhere between Argentina and Brazil" in terms of First World/Third World status. Congress has "appropriated" trillions and the Treasury and Fed, using a variety of tricks to avoid Congressional involvement (describing many of its purchases of worthless crap as "investments" instead of hand-outs), have promised trillions more to bail out the banks and financial institutions deemed too big to fail. As Nouriel Roubini has pointed out, however, the market for raising all this money is in bad shape; the Chinese are not increasing their holdings of the dollar, nor are the Russians. They can't lend us the money because the same "globalized integration" has caused their own economies to tank along with ours. So where do we get the dough?
One route is to melt down the domestic securities market - the Dow, the S&P, what's left of the NASDAQ. Free up all that equity so Treasuries can be purchased. To entice the purchases, maybe the payout on Treasuries will get raised, which, of course, will cause a general interest rate increase. But can Wall Street survive another meltdown, say to Dow 4000? The other is to simply print the money and "buy" Treasuries from ourselves. (I wonder why we even bother to print it, in such a case. Why not simply declare it exists? A friend of mine, speaking from the next bar stool, came up with a plan to allow Americans simply to print their own money at home, which might be a better idea.)
The hyperinflation implied in the untethered creation of money may also lie down the road. It's the reason that at the G-20, ominous noises were made from China, Russia and other affiliates of BRIC (Brazil, Russia, India, China) about creating a new reserve currency. If that happens, all bets are off for the American economy, because running the printing press for the world's fiat currency is what gives us our remaining viability. It's what makes our Treasuries internationally marketable; it's what allows us to conjure wealth. Without it, we're screwed.
Our new currency might devolve to commodities, like trading in tea bags.
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