Double Dip

I'm tryin' hard to figure out how the Debt Deal doesn't make things worse.  An awful lot of people are stuck in this kind of economic limbo, where treading water is about all they can hope for in the near and mid term; and when the average age of the American worker is close to 52, "middle term" can easily mean the remainder of your working life when the economy is stuck in the doldrums.  So while there's a fair stack of good news for households in the $200K+ category, that leaves a huge number of "middle classers" at risk of losing buoyancy and slipping under.

Here's the thing:  There's no substitute for demand.  The law is the law, and no combination of ideology and happy talk is going to change the simple fact that demand drives inflation and inflation is what makes capitalism work in the first place.  You can argue all you want about regulating the thing appropriately, but that's a different conversation.  If your premise is false, your conclusion CANNOT be true.  Demand is everything.  Every time we've tried to move away from that bedrock principle, we've seen some extremely bad shit pile up on us.

So if we take this debt deal at face value (not particularly valid, but ya gotta start somewhere), then what I see is an attempt to remove about $200 Billion worth of demand from the system every year for 10 years.

Here's my clever representation of this dynamic as a DOS batch file:
10: demand goes down, prices go down
20: prices go down, wages go down
30: wages go down, demand goes down
40: GO TO 10

No matter what, Obama owns this thing now.  What exactly he owns is up for debate.  And of course, the main point is to look at what affect this acton and the politics of this action will have on campaign contributions for 2012.

Contributors get people elected.  Big Contributors (eg: Target) that have aligned themselves  too closely with political issues that proved to be unpopular have taken occasionally severe beatings.

I think the strategy is for the White House to continue sending very strong signals to the business community to the effect that "this next part of the shift is on; this is for real and the smart money is backing policy that is fact-based, pragmatic and market-driven - not the Looney Toons bullshit coming from the wingnuts who think everything'll be fine if we just close our eyes and pretend it's 1954."

What if Obama really is playing way over all of our heads?  Maybe he's giving us the impression of the rope-a-dope, or the 3D chess master (remember that the Press Poodles aren't really all that bright - their job is to smash-fit whatever is going on into a prepackaged narrative).  What if Obama is actually working towards a position that forces the Tea Party GOP to isolate itself to the point where it consists of nothing but Michelle Bachmann, Rand Paul, Pat Robertson and The Koch Bros?  But if that's true on the Repub side, then it can just as easily mean he's in the process of stripping away the the hardcore leftie base of the Dems.  All of which translates to the emergence of a "new political entity" - which probably isn't really new at all.

As always, we'll see.  Or at least we'll see something that may or may not be what actually happened.  Maybe we should call this Quantum Politics.  We see only the evidence that something MIGHT have happened, and we're left to theorize as to whether or not it was "real".