Don't blame Standard & Poor's for last week's brutal stock market; S&P may have downgraded America's credit, but all it did was say the emperor has no clothes -- no news if you watched the GOP's shenanigans over the debt ceiling.
Anyone who bothered to actually read S&P's report, in fact, would be hard-pressed to deny its logic -- mainly, that the nation's leaders are simply not leading, hoping instead that magic beans will save us.
And since the deal to raise the debt ceiling just put a band-aid over what amounts to a fiscal shotgun wound, and kicked the can to a committee more or less guaranteed to fail, we can expect S&P to honor its word and downgrade our credit further. Having staked out a position, after all, S&P will have little choice, since Washington will continue to play to the gallery instead of dealing with what's in front of it.
And that of course is what we have to look forward to. Anyone glancing at the so-called supercommittee knows it has to fail, since the parties, which have yet to meet, are already locked in a stalemate over how to deal with the nation's finances. Democrats, for instance, insist on some tax increases, while Republican reject new taxes out of hand.
Meanwhile, if what Republicans want is no new taxes, the structure of the debt deal gives them every incentive to obstruct the committee, since no solution means mandatory program cuts across the board, beginning next year.
Meanwhile, anybody hoping they might be spared more superheated budget hoo-hah might as well leave the country now: September means another showdown, because Congress then needs pass a 2012 budget, or a continuing resolution.
Combine this with a perception overseas that we're simply not governing ourselves and being pushed around by a suicide cult, and it's no wonder the financial markets are cranky.
It didn't help matters, of course, when the Fed's Open Market Committee basically admitted last Tuesday that what people are calling "The New Normal" -- a prolonged bout of little or no economic growth -- is in fact America's new normal.
The Fed may have just been acknowledging the fact of the matter, but admitting we're in for years of financial problems, with few tools to deal with them, is unlikely to warm any observer's heart.
And in fact, the statistics are alarming. According to the Richmond Fed, the Federal Funds rate, the Fed's main tool to manage the economy, is already below minus 1.5 percent in real terms, while most all economic indicators are anemic to alarming.
Add to that the fact that the projected spending cuts will further depress the economy, and you've got gloom as far as the eye can see -- Goldman Sachs, for instance, predicted in February that $50 billion in government spending cuts will mean a cut in GDP growth of as much as 2 percent. The Fed's Open Market committee, meanwhile, said 2 percent growth as much as could be expected for the foreseeable future.
One result: Last week saw the greatest volatility, as a matter of daily point moves, in stock market history.
You could think that meant we're in uncharted territory, but in fact, it was the fourth time in the past 77 years that the market's seen such swings, measured in percentages. The bad news: Each time, the volatility preceded a serious slump. As it is, we never really emerged from the 2008-2009 recession -- the GDP shrank 5.1 percent in those years, while it only grew a revised 5.0 percent since.
Looked at this way, with Republicans insisting on cutting government spending, and Democrats apparently powerless to stop them, it's hard to avoid observing that we have a government that plans to maximize the economic downturn that's coming, at the very time it's insisting on also shrinking the economic safety net. You can guess what that means.
But there are little-remarked forces at work that could make such unpleasantness look like a best-case scenario. For instance, the markets are beginning to bet a major financial institution may soon default -- the biggest bets being on Bank of America or Morgan Stanley. A market event like that could easily trigger the sort of panic we saw in 2008.
All in, then, it's hard to find much optimism in the financial markets -- already as or more powerful than many nation states -- at a time that informed observers are beginning to wonder if the tools even exist to manage another major crisis and if, in fact, the whole world is going bankrupt.
Which brings us back to politics.
About the only light shed on this mess was shed last week by MSNBC's Dylan Ratigan in his famous and admirable rant that, very fairly, pointed out that "the Republicans want to burn the place to the ground, and the Democrats...want to offer a plan that gets them through the second term of their Presidency, and then screws me and my kids when it's over."
And he was right when he said that what we need now is leadership. Leadership, to give us a sense of direction and purpose. American leadership, less interested in ideology than results. A Lincoln, that is, instead of James Buchanan, who, in 1860, wasn't even sure he had the legal power to preserve the Union.
And Ratigan was certainly right when he said that the problem is that we have a bought government, uninterested in our problems, and that what we need to do is get money out of politics -- probably, though he didn't say so, by passing a Constitutional amendment eliminating so-called "corporate personhood".
It's that legal doctrine, after all, that allows legal monstrosities like Buckley v. Valeo to hold that money is speech -- not to mention Citizens United v. FEC, which allows corporate citizens to make unlimited political contributions, even though flesh-and-blood citizens can only contribute $2,500 per candidate.
In my opinion, that's the single most important thing we can do if we want to save the American republic. But we'll never get there, if the Republicans win next November.
Anyone who's been reading me here over the past 2-plus years knows I think that while the right wing is certainly a danger to the Republic, it's past its high-water mark and self-destructing. And they know I think that nothing could have ever destroyed it, root and branch, as thoroughly as it's destroying itself by showing everybody what it's made of.
I even think they know the jig is up and that we've been watching their desperate attempt to cement in place what they can, while they can. All the recent polling, for instance, indicates that Republicans get the lion's share of blame for the debt crisis, and that the Tea Party, in particular, is waning.
But that could come to naught if buyer's remorse about President Obama -- another James Buchanan, if you ask me -- keeps Democrats away from the polls next November or, even worse, turns into a third-party run.
It was Democratic apathy, after all, that handed control of the House to the Republicans in 2010 -- Democratic versus Republican voters turned out 53 percent versus 46 percent in 2008, but 45 percent versus 51 percent in 2010.
And how about a third-party candidate from the left, just on principle? That last time we saw that was in 2000, when Ralph Nader's 97,000 votes in Florida, and 22,000 votes in New Hampshire, cost Al Gore both states and the election. In New Hampshire, Bush beat Gore by only 7,000 votes.
You found those election results appealing, did you?
I suppose the Democratic powers-that-be could possibly prevail on President Obama, very privately, to let someone else run for President in 2012. And if it were the right person -- Hillary Clinton, maybe -- I'm guessing a lot of Democrats wouldn't be too annoyed.
On the off chance that's just a wistful fantasy, though, I can't imagine the country should allow pique, or anything else, keep the Republicans from burning the country to the ground after 2012.