Sunday, November 07, 2010

Reading the Tea Leaves

Some musings on the next two years and where I think we're headed.

Unless they come through on the economy the republicans will lose the tea baggers and the independents.

Lack of jobs is more or less is what they got elected to fix.

Given that the problems with the economy are structural and also the product of 40 years of what is inartfully called 'free trade', there's not much they can do to change the course of this mighty river-this recession's been coming for a long time-and the republicans are ideologically incapable of doing anything that looks like a solution that has a chance in hell of working.

In fact all they've got to sell is tax cuts, and how they can cut taxes when the government's bankrupt is anyone's guess-it really is straight from Cloud-cuckoo land. If you don't have an income, how in the hell can tax cuts do you any good?

Real estate will not come back any time soon. It's on life support, and there's nothing that anyone can do about that until phantom equity and excess inventory is purged out of the system and people start being able to afford a mortgage again. Manufacturing will not come back until we revisit our trade policies that unfairly and persistently favor the Walmartization of America.

The other big debt overhang, which nobody dares speak about, is the revolving credit nightmare. The average default rate on credit card accounts runs around 5 per cent, according to Forbes, and the amount of unsecured debt out there is massive.

All of which give me cause for optimism, so here's my prediction. The republicans will fail, miserably.

It's the economy, stupid. The republican vendetta against the Democratic party will not put one more cheeseburger on a paper plate anywhere, and people will figure that out sooner or later no matter how obtuse they are.

Likewise, people will realize sooner or later that the entire social policy agenda of the republicans will also not put one cheeseburger on a paper plate for anyone. What two gay women do in San Francisco and whether they have a piece of paper that allegedly unites them legally will not give anyone in Pittsburgh or Detroit a job or put one can of soup on the shelf at the local food pantry, for that matter.

In short, the things that they ran on are not going to fix the problems we've got, and sooner or later the stupidest of us will realize this.


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