A truly brilliant essay by Steve Fraser. He gets it. To paraphrase, we have broken models for our economy, foreign policy and governance.
No matter the stimulus or lack of it, our economic model is broken. Even with a stimulus the economy will, by design, return to wasteful consumer spending, the accumulation of ever more unpayable debt and rapid economic decline.
The last four years of growth were a mirage that the real estate, stock and bond markets are now discounting. It was all a bubble bet with borrowed money and now it is gone. The real trouble is, for over twenty-five years now we have based our economy on borrowing to spend, not invest. The bill for this twenty-five-year debt binge is now due, but the economy is still configured for more of the same.
Our foreign policy has been belligerent and bellicose and even in the best of times underhanded and manipulative. The loss of our moral authority and will bode ill for years to come, years in which we will need them most to move forward with foreign policy initiatives. Obama's foreign policy team is made up of the champions of these failed policies. Our hubris abroad has and will come back to haunt us.
The country is now being run by special interests, with Paulson and Bernanke backstopping with trillions the very people and institutions that created the financial crisis of our regulatory system that is in shreds while greed and fear rip through our investments and savings evaporate. Congress gets no say, not that it wouldn't be manipulated by the very same special interests.
The United States is coming apart at the seams. The old remedies will not suffice--worse, they will lead into more intractability and, bigger by magnitudes, the same problems and crises later.