Liberty and Virtue! When! oh When will your Ennemies cease to exist and or to persecute!
Our Country will be envied, our Liberty will be envied, our Virtues will be envied. Deep and subtle systems of Corruption hard to prove, impossible to detect, will be practised to sap and undermine Us and the few who penetrate them will be called suspicious, envious, restless turbulent ambitious -- will be hated unpopular and unhappy
But a Succession of these Men must be preserved, for these are the salt of the Earth. Without these the World would be worse than it is. Is not this after all the noblest Ambition. Such Ambition is Virtue. Cato will never be Consull but Catos Ambition was sublimer than Caesars, and his Glory and even his Catastrophy more desirable.
--John Adams


Well, it is Kerry in the one corner, and deep and subtle systems of Corruption hard to prove in the other. Except those systems aren’t really impossible to detect – we know all about Cheney, Bush, Rumsfeld and Wolfowitz. As for Kerry, his vote to give the Prez power to declare war on Iraq shows that he’s given his heart to Corruption before. This is the point the Dean people make, and they are right.

However, oddly enough, this election, we don’t care. We think that Bush has to be pushed out. Kerry’s the man to do it. All his vices – his pomposity, his flip flops, his vanity – have been changed into virtues in this campaign. They have made him seem serious, seem to hew to the radical center, seem presidential. It is easy for a presidential candidate to seem more presidential than a man who utters phrases like “bring it on” when asked about our war dead. Bush habitually speaks like someone’s retarded child trying to hold the picture of Jesus right side up as he reads his Sunday School book report. Contra the asinine spin purveyed by Todd Purdem in today’s NYT(“Mr. Bush has shown himself to be a sharp, disciplined, resourceful political infighter when his back is against the wall. "No more Mr. Nice Guy" may now be the phrase of the day.”), Mr. Bush has had the luck never to really campaign with his back against the wall. As a class clown, it was hard not to like him against Al Gore’s imitation of a smug class valedictorian. As Mr. Mission Accomplished, I think he will amply exploit his opportunities to look ridiculous. It is a matter of the Dems seeing through the media spin to the man. If they do, they will nail this campaign.

Behind the campaign, however, there is the sickly state of the State. The Economist published a pretty harsh article last week entitled “The Phoney Recovery.” In it, they skewered, with their conservative economic sense, the ‘biggest credit bubble in history.” In other words, our economy, circa 2001-2004.

We loved these two grafs – and by the way, the romance with Greenspan seems to be on its last legs:

“Although concerned about budget deficits, Mr Greenspan argued this week that the recent surge in household debt is relatively harmless for the very reason that it has been accompanied by big gains in household assets. According to such an interpretation, the drop in household saving, to only 1.5% of personal income in December, is no cause for alarm: households no longer need to save, because rising wealth in shares and homes will do it for them.

The snag is that the "wealth" being built up is partly phoney. In a recent report, the Bank of England argued that rising house prices do not create genuine wealth in aggregate. Those who have yet to buy a home suffer a loss of purchasing power, so rising prices redistribute wealth, they do not create it. More serious is that the price of homes or shares can fall, while debts are fixed in value. In the long run, the only way to create genuine wealth is to consume less than income, and to invest in real income-creating assets.”

In other words, like everybody’s favorite Oscar movie this year, Americans are opting for the hobbit economy. Build those hobbit houses and mortgage those hobbit houses and sing those Celtic songs, boys, cause the jobs ain’t coming back. Or something equally elvish.

The article also contrasts the most startling evidence, to our mind, for the effect of trying to maintain an economy with the most unequal distribution of wealth since the thirties with a burden of entitlements that were accrued for a very different economy from the forties through the nineties.
“Strikingly, although GDP has grown by a robust 4.3% over the past year, wage income rose by barely 1% in real terms. According to Kurt Richebacher, an independent economist who publishes a monthly newsletter, wages and salaries have, on average, increased by 9% in real terms in the first two years of previous post-war recoveries, but have been almost flat over the past two years, thanks to the sickly jobs market.”
We think the last phrase is a bit misleading. It isn’t only the sickly jobs market, it is that wages in jobs, for the employed, are pretty much at a standstill. In other periods of globablisation, the tremendous wealth amassed by the top 1 percent has been redistributed, by the force of unions and a militant working and middle class, downward. Not this time. So the reserve army of the unemployed can’t be the entire cause of the flatness of wage increases.