An outer space laugh riot

Grapes of Wrath Redux?
Sacramento, California's jobless tent city

David Seaton's News Links

What is happening? Where are we headed?

Regular News Links readers may recall that I have always maintained that Bush was merely a symptom of a systemic problem, not really a cause.

Barack Obama, it is obvious to me, is a treatment of the symptoms and not any cure for the underlying causes. Simply the re-branding of a defective product.

Obama's apparent strategy in Afghanistan confirms my impression that he is the lampedusian, "change everything, so that nothing changes" figure I have always suspected.

Pakistan, not Afghanistan is the real problem. A stable, un-threatened and prosperous Pakistan would act like a Valium on the whole region.

Stabilizing Pakistan should be the first priority and this does not seem to be the case... far from it.

If the globalized, world economy were doing well, perhaps stabilizing Pakistan would be "doable", but with emerging nations taking the worst hit in this crisis, such an "unlikely lad" as Pakistan is probably not going to make it... in most part due to American meddling... With absolutely catastrophic consequences.

I am afraid that the Obama policy in Afghanistan/Pakistan is not only incorrect, it is frivolous. Not because Obama himself is particularly frivolous, but because the system itself within which he operates is.

I think that because it is so painful, we are taking all of this much more seriously then it deserves to be.

I imagine that if I were a Martian observing this situation from the comfort of my flying saucer I would be peeing my space suit with laughter.

Lucky Martians!

Because it is painful, because so many are suffering we imagine that those in charge are motivated by great or noble passions.

Perhaps all of this is much simpler that it might appear at first glance.

The Geithner plan only confirms that analysis/intuition for me.

Most independent observers both in the USA and abroad are of the opinion that the problem with US banks is not liquidity, but rather solvency. That is why Paul Krugman, for example, "despairs" of Geithner's plan.

The normal game plan for bringing insolvent banks back to health is well known and goes as follows:

• Government takes over insolvent bank
• Fires old management
• Hires new managers
• Shareholders are wiped out
• Bank is restored to health and reprivatized often at a profit for taxpayers.

I think it is obvious that the shareholders of American banks are taking priority over the taxpayers. I seem to remember that one percent of the US population holds some forty percent of the shares traded on Wall Street.

Therefore it might be worthwhile to begin to investigate the relationship that Obama and his team have with said shareholders.

What if they were all in on the gag?

Think about three of the points of a bank restructuring that I made above:

• Fires old management
  
• Hires new managers
  
• Shareholders are wiped out

What is the relation of Larry Summers, Robert Rubin and Tim Geitner to the "old management"? Would they or any of their family be "wiped out" in a normal nationalization/re-privatization process?

I think that these are serious questions that all nasty "populists" should be asking.

Finally:

What little comfort can we derive from this crisis?

Well, for one thing it puts paid to the idea of some sort of diabolically clever "capitalist-international" elite that guides mankind's destiny pulling strings from the shadows: the "Davos cum Bilderberg" thing.

Obviously any such group would have prevented this Wall Street, Madoff-make-off, which is threatening the whole system.

Nobody is minding the store, the American economy is simply a thieves' banquet.

We take our comfort where we can. DS

The American Black Hole of Value

David Seaton's News Links
Martin Wolf, chief economist of the Financial Times is worried about the Geithner plan, he writes:

The crisis has broken the American social contract: people were free to succeed and to fail, unassisted. Now, in the name of systemic risk, bail-outs have poured staggering sums into the failed institutions that brought the economy down. (...) If this scheme works, a number of the fund managers are going to make vast returns. I fear this is going to convince ordinary Americans that their government is a racket run for the benefit of Wall Street. Now imagine what happens if, after “stress tests” of the country’s biggest banks are completed, the government concludes – surprise, surprise! – that it needs to provide more capital. How will it persuade Congress to pay up? The danger is that this scheme will, at best, achieve something not particularly important – making past loans more liquid – at the cost of making harder something that is essential – recapitalising banks.

Nobel Prize winner, Joseph Stiglitz, was blunt:

"Quite frankly, this amounts to robbery of the American people. I don't think it's going to work because I think there'll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer."

And of course that other Nobel, Krugman, blogged:

"What an awful mess."

In my opinion there was something much more important than Geithner's plan floated this week:

Are the Chinese just worried about the sagging value of the $1.4 trillion in U.S. Treasuries they hold or are they really on to something? That's the big question now that China's central banker, Zhou Xiaochuan, has called for the greenback to be jettisoned as the world's dominant currency and replaced by a new type of benchmark controlled by the International Monetary Fund. Zhou made his call in an essay that appeared on the website of People's Bank of China, China's central bank, on Monday. It was clearly timed to make a splash in the run-up to the G20 meeting that starts in London on April 2. Calling the use of the dollar as the world's benchmark currency "a rare special case in history," Zhou urged the "creative reform of the existing international monetary system towards an international reserve currency." Zhou said the reserve currency, managed by the IMF, should be "disconnected from individual nations and is able to remain stable in the long run." Talk about a vote of no confidence on the future of the U.S. economy! Washington Post

Of course the moment the US dollar ceases to be the world's reserve currency, the American economy will no longer be able to pay its debts with money it prints in its basement... The jig will up. Meatloaf will take the place of Camembert on many a formerly festive board from that day out.

Pushing aside all the epidemically anecdotal sound and fury, what has happened?

One of the world's most interesting and influential, even seminal, economists, the Peruvian, Hernando de Soto wrote the following article in the Wall Street Journal that gets right to the heart of the present situation:

Today's global crisis -- a loss on paper of more than $50 trillion in stocks, real estate, commodities and operational earnings within 15 months -- cannot be explained only by the default on a meager 7% of subprime mortgages (worth probably no more than $1 trillion) that triggered it. The real villain is the lack of trust in the paper on which they -- and all other assets -- are printed. If we don't restore trust in paper, the next default -- on credit cards or student loans -- will trigger another collapse in paper and bring the world economy to its knees.

If you think about it, everything of value we own travels on property paper. At the beginning of the decade there was about $100 trillion worth of property paper representing tangible goods such as land, buildings, and patents world-wide, and some $170 trillion representing ownership over such semiliquid assets as mortgages, stocks and bonds. Since then, however, aggressive financiers have manufactured what the Bank for International Settlements estimates to be $1 quadrillion worth of new derivatives (mortgage-backed securities, collateralized debt obligations, and credit default swaps) that have flooded the market.

These derivatives are the root of the credit crunch. Why? Unlike all other property paper, derivatives are not required by law to be recorded, continually tracked and tied to the assets they represent. Nobody knows precisely how many there are, where they are, and who is finally accountable for them. Thus, there is widespread fear that potential borrowers and recipients of capital with too many nonperforming derivatives will be unable to repay their loans. As trust in property paper breaks down it sets off a chain reaction, paralyzing credit and investment, which shrinks transactions and leads to a catastrophic drop in employment and in the value of everyone's property.

Something truly stupefying has occurred, something which has not yet been fully taken in. The United States of America, precisely at its moment of triumph and mastery, its moment of unique preeminence, has chosen to destroy the concept of value itself.

At the risk of offending Catholic readers everywhere, imagine this "parallel universe", a metaphorical, Saramago-like scenario by which I have chosen to describe through analogy the American financial sector's crisis and by extension the social crisis it brings with it:

One Sunday, all over the world, every Catholic, man woman and child, who takes Holy Communion develops a persistent diarrhea and an unsightly rash.... Health authorities discover that the pathogen causing these ailments is only found in consecrated communion wafers... unconsecrated wafers are found to be harmless, scientific tests determine that the transformation occurs precisely upon the Host's elevation and is not due to faulty storage procedures.

Priests all over the world try consecrating other forms of bread, but with the same result: anything any of them consecrates brings on the diarrhea and the rash. The diarrhea and rash are not fatal, but this universal outbreak brings into question all the sacraments of the Church, especially other vital ones of "deferred payment", such as baptism and the forgiveness of sins.

On one hand this rationally inexplicable crisis is taken as the definitive proof of a supreme being, one who actually and unmistakeably intervenes in human affairs, but on the other it also undoubtedly damages the Church's franchise as a credible representative of that being on earth.

Without a viable sacramental role, what would be the status then of the Pope? He would still have the trappings of the office, the "pope-mobile" and the stunning wardrobe, but what of his apostolic authority?

Having proven God's existence, while simultaneously demonstrating his disfavor, would this then lead to mass conversions to Islam or to Pentecostal sects?

What would be its effect on the Italian tourist industry?

The blow-back and knock-on effects of the proven or potential toxicity of the Church's most important assets, its sacraments, might be endless.

Business and the sanctity of property are and have always been America's religion.

In America's case read commercial paper and the dollar for "communion wafers" and POTUS for "Pope" and you get my drift.

America has in a sense committed suicide. Can its stomach be pumped out in time? DS

Up against the wall mother... of invention

John Rich singing "Shutting Detroit Down", (hat to Forensic Economist)

David Seaton's News Links
The American Dream is based on the extraordinary idea/fantasy/vision of an endless horizon, of unlimited possibility, of infinite social mobility, of ceaseless, all solving invention, a place where everyone has/had a chance at "the Diamond as Big as the Ritz".

This vision explains the unique phenomenon of a country where simultaneously the word "elitist" is an insult and the wealthy and the famous are worshiped.

However the dream has its cut-in-stone rules, its iron logic. Those rules, that logic are being violated.

My daddy taught me
In this county everyone's the same
You work hard for your dollar
And you never pass the blame
When it don't go your way

Now I see all these big shots
Whining on my evening news
About how their losing billions
And it's up to me and you
To come running to the rescue
"Shutting Detroit Down" - John Rich

There is hell to pay.

Running out of road, discovering limits, this is the nightmare of the right, that is why, for example, that they react so virulently, so insistently against the clear danger of climate change. Global warming means finding limits.

Ideally, America's vision of capitalism is like a version of musical chairs where new chairs are being added constantly. Everybody imagines that they'll finally get a seat.

However in a Global warming scenario the music stops and instead of a chair being added or one chair being taken away as in the classic game, most of the chairs are removed and unless the remaining chairs are shared fairly, most human beings will be left standing for eternity or rebel and take the chairs for themselves from the few who posses them.

For a long time, despite stagnant salaries and purchasing power, easy credit - mostly loaned to Americans by foreign savers - has allowed this peculiar game of musical chairs to continue. Now even the piano is being repossessed.

In a real sense the American Dream itself may be turning out to be a Madoff style Ponzi scheme.

One of my favorite practices is to put quotes next to each other and see how they resonate, the same way that musical notes form a chord: the resulting sound is more than the sum of the parts.

Here are two, that juxtaposed, drip with zeitgeist, brim with the writing on the wall.

It has been odd, over the past six months, not to have the gospel of success as part of the normal background music of life. You go about your day, taking in the news and the new movies, books and songs, and only gradually do you become aware that there is an absence. There are no aspirational stories of rags-to-riches success floating around. There are no new how-to-get-rich enthusiasms. There are few magazine covers breathlessly telling readers that some new possibility — biotechnology, nanotechnology — is about to change everything. That part of American culture that stokes ambition and encourages risk has gone silent. We are now in an astonishingly noncommercial moment. Risk is out of favor. The financial world is abashed. Enterprise is suspended. The public culture is dominated by one downbeat story after another as members of the educated class explore and enjoy the humiliation of the capitalist vulgarians. David Brooks - New York Times

Socialism is an ideology founded on optimism - the hope that the world could be a better place if its relations are rooted in co-operation rather than competition, and solidarity rather than insularity. But for much of my adult life the opportunity to apply those principles has been rare. Gary Younge - Guardian

I suppose David Brooks would count John Rich, the author of "Shutting Detroit Down" among members of the educated class that "explore and enjoy the humiliation of the of the capitalist vulgarians".

What I don't see yet is how we get from Brooks to Younge.

What I don't see yet is a charismatic, working class politician in the line of a Huckabee or a Palin saying, like Gary Younge, that "the world could be a better place if its relations are rooted in co-operation rather than competition, and solidarity rather than insularity". I don't hear a down home voice like a Huckabee or a Palin talking, with the angry, Woody Guthrie-like passion of a John Rich, about nationalizing General Motors to save those jobs and pensions.

I opened with John Rich, so I'll close with Cole Porter,

"Use your mentality, wake up to reality"

The day that happens, the entire world will change overnight.

I am enough of an American exceptionalist to believe that, as America is the cutting edge, the vanguard of capitalism, it is "only in America" where capitalism will be finally tamed, if it ever is. DS

Mission improbable

Your mission, if you should choose to accept it is to save capitalism. This economy will self-destruct in 5 seconds

David Seaton's News Links

Universal health care, free university education for all, a more realistic foreign policy, freeing science from superstition... All of these Obama initiatives not only sound good, they sound wonderful, thrilling.

But somehow, at this moment, the new president and his government's lovely initiatives mostly remind me of the pediatricians and the nurses at a children's cancer ward organizing a big Christmas party... for the summer.

Aside from Santa Claus, the doctors don't know who else will still be around to decorate the tree, but at least thinking about the future goodies takes our minds off of our poor little, pale, bald heads.

For, truly, at this point it is not just "it's the economy, stupid", it is more like "it's the economy, dear Jesus".

Most Americans (53%) now think the United States is at least somewhat likely to enter a 1930’s-like depression within the next few years.(...) The most recent survey also found that half of all adults (49%) say today’s children will not be better off than their parents. Only 26% hold the more optimistic view, while another 25% are not sure. Rasmussen Reports

Even Obama-friendly commentators of impeccable professional qualifications like Paul Krugman are beginning to have serious doubts whether Obama and Geithner have the political will to do what it takes to save the economy from a depression.

Last month, in his big speech to Congress, President Obama argued for bold steps to fix America’s dysfunctional banks. “While the cost of action will be great,” he declared, “I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade.” Many analysts agree. But among people I talk to there’s a growing sense of frustration, even panic, over Mr. Obama’s failure to match his words with deeds. The reality is that when it comes to dealing with the banks, the Obama administration is dithering. Paul Krugman: The Big Dither - New York Times

Here is how financial strategist David M. Smick put the cost of this "dithering" in the Washington Post:

Our present position is unsustainable. The longer we delay fixing the banks, the faster the economy deleverages, the more credit dries up, the further the stock market falls, the higher the ultimate bank bailout price tag for the American taxpayer, and the more we risk falling into a financial black hole from which escape could take decades.

Even Thomas Friedman chips in his two cents worth in his inimitable, "dwarf in the locker room" style.

Friends, this is not a test. Economically, this is the big one. This is August 1914. This is the morning after Pearl Harbor. This is 9/12. Yet, in too many ways, we seem to be playing politics as usual. Our country has congestive heart failure. Our heart, our banking system that pumps blood to our industrial muscles, is clogged and functioning far below capacity. Nothing else remotely compares in importance to the urgent need to heal our banks. Yet I read that we’re actually holding up dozens of key appointments at the Treasury Department because we are worried whether someone paid Social Security taxes on a nanny hired 20 years ago at $5 an hour. That’s insane. It’s as if our financial house is burning down but we won’t let the Fire Department open the hydrant until it assures us that there isn’t too much chlorine in the water.

It seems unanimous.

Treasury Secretary Timothy Geithner, who may be President Obama's biggest mistake, has not been able to inspire confidence or convince a frantically anxious public that he knows what he is doing. The man, whose TV personality is that of a slightly sneaky, know-it-all-ish technocrat, is overwhelmed and understaffed in what at the moment is the second-most-important job in the American government. Nicholas Von Hoffman - The Nation

None other than the great Roubini,

"also took issue with the $800 billion stimulus package, saying it's not enough. For one thing, there's only $200 billion upfront, and half of that is a tax cut, which Roubini calls "a waste of money" that is not going to make a difference."

The entire world is waiting, hoping and maybe some are still expecting that Barack Obama will wave a magic wand and everything will be alright. However it could very well be that Obama and his "good vibes" will be swept away by events. As Martin Wolf wrote in the Financial Times:

The ability of the west in general and the US in particular to influence the course of events will also be damaged. The collapse of the western financial system, while China’s flourishes, marks a humiliating end to the “uni-polar moment”. As western policymakers struggle, their credibility lies broken. Who still trusts the teachers?

The other night we had dinner with an old friend, an American lady, the widow of a Spanish architect, who works in the Spanish ministry of culture. Needless to say she is a passionate Democrat and an Obamite. She made an interesting observation about the financial crisis.

"Everything is so quiet..." she said, "In the run up to the war in Iraq, literally millions of angry Spanish people took to the streets to protest against the USA... but the war itself had little effect on the daily life of Spaniards. Now, in this economic crisis, which has its origins in America, it's as if the United States of America had personally dropped a bomb on every Spanish family... You'd think they'd be burning down the US embassy, but they aren't... not yet. It's kinda weird, when you think about it, isn't it?" she said. You betcha.

We have entered terra incognita.

Those of us who like to "think outside the box" are having trouble even locating the box these days.

Reality has always been a moving target, but now it appears a moving hologram. The world may be so different in a year of two that its own mother wouldn't recognize it.

The only thing I'm sure of at the moment is that if things are ever going to get better they are going to have to get a helluva lot worse. Idols are falling, more must fall.

This crisis has radically changed the political landscape and the sudden loss of authority of what Martin Wolf calls "the teachers" has opened the door for language and thinking to enter mainstream discourse, that only a few weeks ago would have been unthinkable.

"Populism" is a funny word. In the American media it usually has a pejorative connotation. But here is how Wikipedia defines it:

The word populism is derived from the Latin word populus, which means people in English (in the sense of "nation," as in: "The Roman People" (populus Romanus), not in the sense of "multiple individual persons" as in: "There are people visiting us today"). Therefore, populism espouses government by the people as a whole (that is to say, the masses). This is in contrast to elitism, aristocracy, synarchy or plutocracy, each of which is an ideology that espouse government by a small, privileged group above the masses.

Lula, the president of Brazil put it this way in no less than the Financial Times:

"I am not worried about the name to be given to the economic and social order that will come after the crisis, so long as its central concern is with human beings."

Nobel Prize winner, Amartya Sen went even a bit further in the New York Review of Books

The market economy has depended for its own working not only on maximizing profits but also on many other activities, such as maintaining public security and supplying public services—some of which have taken people well beyond an economy driven only by profit. The creditable performance of the so-called capitalist system, when things moved forward, drew on a combination of institutions—publicly funded education, medical care, and mass transportation are just a few of many—that went much beyond relying only on a profit-maximizing market economy and on personal entitlements confined to private ownership. Underlying this issue is a more basic question: whether capitalism is a term that is of particular use today. The idea of capitalism did in fact have an important role historically, but by now that usefulness may well be fairly exhausted.

A mainstream, Nobel Prize winning economist saying the usefulness of capitalism, "may well be exhausted"! The unspeakable is being spoken.

You, like me, may find this change of language and the new horizons it presents filled with hope, but you better believe there are quite a few people who it is surely making terminally nervous.

As we noted last week, the people who stand to lose money, power and prestige through this sea change in the political mood are certainly not going to take these losses lying down.

I think that this is one of the lines they are going to take:

While the Obama administration seeks to improve America’s position vis-à-vis Iraq, Afghanistan, Israel-Palestine, Europe, and Asia, the most critical foreign-policy front of all – the home front—is looking brittle. This development is new, as for almost seven decades – ever since Pearl Harbor—policymakers have taken for granted that the homefront would cooperate with military missions and expenditures.(...) The fact that the public has docilely accepted this arrangement for so long does not mean that it will continue to do so. Despite the many new billions that President Obama’s budget allocates for jump-starting the economy, he intends to substantially cut the Pentagon’s money-line.(...) What I foresee is a more gradual siphoning of money away from vital programs over the next decade, even as China, India, and other countries enlarge their navies and other forces. This will not necessarily lead to a security dilemma for the U.S., but it will certainly lead to a multipolar world and the end of American dominance. The only development that could change this equation would be a new and sudden threat – and one other than mass-casualty terrorism."The Shrinking Superpower", Robert D. Kaplan, The Atlantic

Or this:

We are on the verge – within 10 years – of a major collapse of evangelical Christianity. This breakdown will follow the deterioration of the mainline Protestant world and it will fundamentally alter the religious and cultural environment in the West.(...) This collapse will herald the arrival of an anti-Christian chapter of the post-Christian West. Intolerance of Christianity will rise to levels many of us have not believed possible in our lifetimes, and public policy will become hostile toward evangelical Christianity, seeing it as the opponent of the common good. Michael Spencer - Christian Science Monitor

It is indeed a great blessing that the Soviet Union has disappeared. This disappearance at least makes true change possible. The presence of a rival superpower with an alternative economic system and ideology at this moment would mean that this crisis could only lead America farther to the right.

Seen this way the crisis couldn't have come at a better time.

As it is someday the United States may just be able to muddle its way through by sheer process of elimination into something more humane. DS

This is just starting...

David Seaton's News Links

The central issue in American politics now is whether the country should reverse a three-decade-long trend of rising inequality in incomes and wealth. E.J. Dionne Jr. - Washington Post

This budget says the Republicans had Mr Obama right all along. The draft contains no trace of compromise. It makes no gesture, however small, however costless to its larger agenda, of a bipartisan approach to the great questions it addresses. It is a liberal’s dream of a new New Deal. Clive Crook - Financial Times

President Obama proposes to raise the taxes of America's richest citizens, whose tax bill has been getting smaller and smaller for the last thirty years. This disagreeable prospect finds the political defenders of this wealthy minority, the Republican party, in a state of ideological collapse, with the prestige of the market economy and Reaganomics in tatters.

Now, in trying to forecast how this situation will play out I base a lot of my analysis on a assumption that many may find quite controversial or even unfair. This assumption, briefly stated, is as follows: that the possessors of huge amounts of money are, with many honorable exceptions, greedier and more ruthless in the acquisition and defense of their wealth than the average person is of his modest possessions and that they also have at their disposal many more tools to express these traits than the average person does.

As I say, many may find this characterization of the rich unfair, however if you take this assumption of mine as a given, it is safe to say that the wealthiest Americans are not going to take the prospect of paying more taxes lying down. They will fight hard and fight to win.

How will they fight?

Before continuing, I would like to make a short aside to remember something an old Spanish communist told me way back in the 1970s. He said, "David, if the right ever called for a mass demonstration behind the slogan, 'Workers arise, defend the property of the wealthy!', nobody would come, maybe ten people might show up. So the wealthy have to call up mass movements to defend their interests behind the screen of, 'God and country' or even racial hatred".

How is that for teaching the ABCs?

For some thirty years, the American political conversation has been dominated by a strain of ideological conservatism that wields market fundamentalism as a sword and cultural populism as a shield. Hendrik Hertzberg - New Yorker

It is difficult to overstate the significance of this breakdown of faith in the market economy, because we are talking about transcendence. To have the economy collapse the way it is doing does not just mean material hardship, it is a "dark night of the soul" for many Americans.

It might sound like a crude joke, but for many Americans the line where capitalism ends and where Jesus begins has been steadily blurred and wrapped in the flag since the beginning of the "Cold War" and the "red scare" of the late 40s and early 50s. If you choose to consider that an accident or a coincidence, well it's a free country, isn't it?

Since the fall of the Berlin Wall this transformation of money making into a universal faith open to all, where everybody wins, has become worldwide. This can take paradoxical forms:

A couple of years ago, John Berger made a salient point apropos of a French publicity poster of the internet investment brokers' company Selftrade: under the image of a hammer and sickle cast in solid gold and embedded with diamonds, the caption reads "And if the stock market profited everybody?" The strategy of this poster is obvious: today, the stock market fulfils the egalitarian Communist criteria, everybody can participate in it. Slavoj Žižek - "The Undead Lenin"

For a long time not only have the wealthy had their money practically untouched, they have been admired and encouraged to flaunt it. That era has crashed and is burning.

I wrote this in June 2007:

Millions of middle-middle class people who have been living in a dream world, thinking that were somehow part of the same universe as Bill Gates, are going to have to make drastic decisions about allocating their resources if they are not to lose their homes. They are going to re-discover why there was ever a universal demand for good, free public schools and universities or (in the countries lucky enough to have gotten that far) first class, free public health care in the first place. They will rediscover the nearness of the abyss of destitution and humiliation that terrified their parents and grandparents who lived through the Great Depression. As much as an economic and political readjustment, it will be a cultural change, for never before in history have so many "normal" people identified with the wealthy and considered them harmless or even benevolent.

The "sword of market fundamentalism" is broken:

President Barack Obama enjoys widespread backing from a frightened American public for his ambitious, front-loaded agenda, a new poll indicates. He is more popular than ever, Americans are hopeful about his leadership, and opposition Republicans are getting drubbed in public opinion, the new Wall Street Journal/NBC News poll suggests. Wall Street Journal

That leaves the "shield of cultural populism" as untrammeled wealth's last line of political defense: Jesus, fear and the flag. The shield can be couched in calm, reasonable language:

Even though Obama’s audacious agenda might provide short-term relief to the economic and social challenges that now beset us, over the long term the Obama revolution is likely to erode first the religious and then the civic and moral fabric of the nation. Undoubtedly, this is not the change religious believers who put their faith in Obama last November are hoping for from this president. But if the European experiment with the welfare state tells us anything, it tells us that this is the change we can expect from a successful Obama revolution. W. Bradford Wilcox - Witherspoon Institute

Or it can be the red meat on display at the recent Conservative Political Action Conference :

In an address at CPAC, former Arkansas Gov. Mike Huckabee compared Obama and the Democrats' agenda to that of the former Soviet Union. "Lenin and Stalin would love this stuff," Huckabee said. Market Watch - Wall Street Journal

The rage is close to the surface:

"What is so strange about being honest and saying I want Barack Obama to fail, if his mission is to restructure and reform this country so that capitalism and individual liberty are not its foundation?" (Rush) Limbaugh said at the Conservative Political Action Conference. Boston Globe

Probably the only card left to play with the economy in meltdown is the fear card and it certainly wasn't expressed subtly at CPAC conference:

Former UN Ambassador John Bolton believes the security of the United States is at dire risk under the Obama administration. And before a gathering of conservatives in Washington on Thursday morning, he suggested, as something of a joke, that President Barack Obama might learn a needed lesson if Chicago were destroyed by a nuclear bomb. Mother Jones

That is crazy talk, but that gives us a clear idea of the present fantasies of the neocons and we have certainly learned though painful experience that they are not people who are readily satisfied with just fantasies: they tend to act out.

By now, after eight years of Bush, I take these people seriously. There are at this moment a group of very well funded, well organized people who would rejoice if the United State suffered a huge terrorist attack or was dragged into a major war.

Armageddon is probably the last, best chance that the "Conservative Revolution" has of surviving and the only chance the super rich of America have of not ending up paying, what for them would seem, Scandinavian scale taxes.

They have plenty of potential disasters to choose from, for today's world is a "target rich" environment.

Finally the success of president Obama's "revolution" may well depend on the goodwill of the Communist Party of China and their endless purchasing of US debt, the cooperation of Vladimir Putin in Afghanistan and beyond, the passivity of the Ayatollahs of the Islamic Republic of Iran, the good faith of the Israeli Likud, which itself depends on the support of neofascist, Avigdor Lieberman... and of course, last of all, but not least of all, the acquiescence and quiescence of Al Qaeda.

Have I left anybody out?

The major challenge of progressives in the months and years to come will be to keep America out of war. DS