Political Instability?

Nations painted "politically unstable," make investors wary; they hire ex-CIA for expert assessments. 'Developing' countries have faced this difficulty repeatedly.

The talk in Davos, at the World Economic Forum, was of political instability--in the US. The movers and shakers may be onto something, although it might better be termed political stalemate.

The United States faces huge economic problems, and those problems, now worldwide, spread from America. China is stimulating its economy and so are European nations. Governments are acting; their people are not stopping them.

In the US they are. First, Obama's stimulus was too small and poorly targeted, because of the compromises and deals he made to move it through Congress. So, unemployment is over 10%, instead of the 8% he promised. A logical response would be a second, better-targeted stimulus, but conservatives are screaming that even the first should be cancelled. If it were, unemployment would surge, probably past 12%, and we'd plunge into a renewed Depression.

Second, the deficit has surged; Republicans and tea partiers say government spending must be cut--across the board, except (of course) for Defense. If it were, we'd be in for a "double-dip" recession, not a limp recovery.

Third, Obama's legislative initiatives (health care, financial reform, cap and trade), aimed at rectifying problems that led to this crisis, appear to be dead in the water.

Yet, Obama was elected by a respectable landslide a little over a year ago, and was wildly popular at his inauguration. Furthermore, he brought with him a huge majority to both houses of Congress.

Scott Brown's upset win in Massachusetts, "the bluest state," has blocked whatever momentum there was for Obama's reforms. In polls, generic Republicans beat Democrats easily--only one year after that landslide. So, Democratic legislators are afraid to act.

If Democrats do nothing, they will lose. What alternatives do Republicans offer? The extensively tried and failed "free market" and tax cut policies (for the rich) that drove the world into this hole.

And then there is the Tea Party movement. People in it blame both parties, but offer about the same Republican stale beer, except that the beer is laced with anti-bank, anti-government populism.

Meanwhile "progressive" Democrats rebel against Obama's compromises, withhold votes on the Senate healthcare bill and cap and trade, while other Democrats mutter about losing Wall Street campaign funding--if they pass financial reform. Exacerbating this, the Supremes just rewrote the political rules: corporations can now dominate even more.

If the Republican 'No' party gains Congressional control--then what? Will Obama compromise to return to reward-the-rich, laissez-faire policy? Or would he block it?

We'll face either stalemate, or the ruinous return to Selfish Class control. Only assertive reform will undo this downward spiral.