FORECAST - GLOOMY. FUTURE - UNCERTAIN

I have been absent for some time, partly because I can’t go on and on griping about the same stuff – American foolishness from a country that knows better. Partly because for the last two weeks I have immersed myself in glorious music at the Festival of The Sound. (More on that later)

There has been a kind of “schadenefreude” over the America gloom that has settled on world markets. I think that quietly much of the rest of the world is enjoying the American distress.Tomorrow’s big U.S. papers should carry it all: the accusations by the right wing of the Republican party, the insistence by the Democrats that they did the best they could, and a fading President trying to shore up his image and pretend that November 2012 is not the issue.

It was most interesting to me that Standard and Poors (the same people who once thought that mortgage-backed securities were triple A) has made a judgment that is at least partly political. It may only be an excuse to conjure up the image of two parties fiddling while Washington burns; of factional quibbling that became more important that economic survival; that seeing who would blink first was part of the game; and a continuing belief in their basic values.

I would keep watching with amazement and amusement at how the Republicans could continue to mouth political and economic platitudes, like buzzword realities and truisms: big government is the cause of unemployment. Or – higher taxes for the rich are job-killers. In all the debates (although I may have missed it) I have not heard any say “Mr. Boemer, exactly how does increasing taxes on the rich cause unemployment?” Just keep saying it often enough... – and the rest you know.

Even though poll after polls shows that Americans are much more concerned about unemployment than about the deficit, the pounding about deficit reduction goes on and on.

Some economists have railed against the “compromise” especially since it reduces government spending which reduces employment even further. Wall Street may be the home of an interest vested in capital success, but it is also possessed of enough wisdom to see (and perhaps Standard and Poors sees it too) that in America the public service is a huge employer. It does not make a profit at what it does, but it is essential to the survival of the country. To hear the Tea Party talkers, it is just another symptom of the evil of Big Government. (These Constitution worshipers aren’t even slightly aware that Founding Fathers were in favour of strong central government.)

Most of all, I am sorry that Obama did not use the power he has under the 14th Amendment to unilaterally raise the debt ceiling by executive order. I guess he didn’t want to carry that burden into November 2012 – especially if unemployment stays high – and it will.

The situation may have gone from desperate to hopeless. But when you are the world’s biggest economy with a population of the world’s biggest consumers – I guess you can go on hoping.

We all can.