People who parse statistics in order to see the big picture on the economy have been quite optimistic in recent months about this country’s economic progress — about a so-called “recovery.” People who actually live inside that big picture, who actually experience economic reality rather than juggling numbers, know better. Most Americans continue to believe the economy isn’t improving in the sense of their own standards of living improving. Indeed, a recent poll found that twice as many of those surveyed think the economy is either not improving at all or actually getting worse.
And if you think things in the real economy — the one outside the big bank rigged, economist and analyst feed, stock market bubble machine — are bad now, just wait. If another 9/11 style horror or vast natural disaster or bit of foreign adventurism gone amok doesn’t bring on a climactic economic dip this year, the foolish policies pursued inside the Beltway and state capitals for so very long will almost certainly come to fruition and do the job in 2011.
I got a strong intimation what was to come soon while listening to Public Radio this morning. Some reporters were discussing the Pennsylvania state economy. It’s an economy that has avoided a number of recent setbacks simply by virtue of receiving scads of stimulus money from Washington.
These goodies will stop soon, however. The Washington crowd will then be prevented from doing another stimulus bailout both by politics and the bond market, and the Pennsylvania economy will take a briefly delayed giant hit.
With lots less money coming into the state, already strained public services won’t be able to be maintained even at present lowered levels. Pension fund obligations, woefully underfunded but contractually mandated, will have to be confronted. The list of fiscal woes goes on and on.
The result: Not only lower real life living standards in the wake of drastically reduced services, but huge negative economic spinoffs viscerally related to these services. Multiply Pennsylvania by 50 and you know where things are headed in the real standards of living economy.
How is this likely to play out politically? With a sharp turn to the right. This is because the crowd that pretended to be on the other side has proven otherwise. Proven not to be on Main Street’s side but on the Big Banks’ side. Proven to be operating under a false flag.
Barack Obama learned all the lessons of the Bill Clinton presidency from all the Clinton alumni he took into his own administration. The big lesson he missed, however, was this ain’t the 1990s anymore…
More economic and political commentary (in verse) from this author at http://www.wallstreetpoet.com