I would say that there is a kind of dual mood to the country right now.  Certainly, the historic election of Obama has spawned a fair amount of optimism.  Whatever else you might think about him, he is clearly more competent and intelligent than our outgoing dauphin.  Much to the chagrin of lefties, Obama has populated his cabinet with a number of ideological conservatives.  All indications are that he is insulating himself from accusations of hyper-liberality by giving people of various political stripes a real stake in the success or failure of his administration.  It will be hard to blame Democrats for everything if there are tenured conservatives helping to run the show.  It's a pretty smart political move, despite squawking from progressive quarters.

However, it is also obvious that people are terrified at the continued unraveling of the American economy.  Over two million jobs were lost in the first 11 months of 2008.  Home foreclosures are continuing their frightening momentum.  The stock market had the worst year since the Great Depression.  Etc, etc. -- not a pretty picture.

So the country is essentially in a hand-wringing, face-wincing, semi-sheepish grin, hoping that the incoming President can pull our asses out the fire.  But deep down, I think we all know that Obama can only do so much, and that our systemic problems run much deeper than some bad mortgages and some bad apples at the SEC.  That is why so many pundits are predicting a longer grace period for Obama than usual.  People will give him an extended opportunity to turn things around, and not jump on him too fast if tough times persist (which everyone expects).

But what can we reasonably expect to happen this year?  What can really "turn things around" in a meaningful fashion?  As other posts on this blog site make clear, I believe that what we are seeing right now is NOT just a temporary recession, or a normal part of the business cycle, or a more extreme example of the "creative destruction" of capitalism.  I don't think that all of our troubles can be traced to the sub-prime mortgage mess, or to a lack of government oversight in the financial sector, or to overly-cozy relationships between politicians and lobbyists (although all of these are certainly part of the problem).  No, as I have stressed in earlier pieces, I believe that what we are experiencing right now is the collapse of the American Algorithm: specifically, changes in financial technologies, economic structures, and ecological systems have rendered the One Person-One Job/One Family-One Dwelling social form dysfunctional if not outright obsolete.  Forces like globalization, technological unemployment, ecosystem collapse, and Peak Oil will make it all but impossible to resurrect a future of easy full-employment and mass consumption, no matter the level of greenness involved.  It seems clear that the individual, the couple, and the nuclear family are simply too small to serve as platforms from which to approach the wider economic and political landscapes.  We have to create or rediscover some form of "we," some kind of collective home base that provides more economic breathing room for people in their everyday lives.  

Before looking at the candidates for collective action in the near future, let's quickly consider what will happen in the early Obama period, and why the likely actions will prove inadequate in addressing our most fundamental problems.  Yesterday (1/3), Obama unveiled more details of his proposed economic stimulus plan.  The major planks are: doubling renewable energy production, making public buildings more energy efficient, rebuilding crumbling infrastructure (roads, bridges, and schools), computerizing the health care system, providing a middle class tax cut, and modernizing classrooms, labs and libraries.  While he did not put a specific price tag on this package, Obama's advisers have indicated that it will be around $675 to $775 billion, with other economists hinting at a more realistic figure of $1 trillion.  

There seems to be a general consensus across the ideological spectrum that the federal government has to do some kind of large stimulus package to avoid total economic meltdown.  The general analogy being pushed is FDR, WW2, and the Great Depression.  There is a lot of bickering about FDR's legacy, with conservatives saying that his programs were actually failing, and that it was only the necessities of war and the dynamo of industry that rescued America.  Others, especially Paul Krugman, have argued that New Deal spending was working wonders for the general economy, and that FDR actually damaged the recovery by backing away from further federal stimulus and pushing tax cuts.  Whatever the details of these disputes, the general parallel between our situation and the Great Depression era seems appropriate, and most feel that Obama and the federal government have to come up with some kind of massive, top-down plan to spark some life back into the American economy.

Leaving aside the economic nuances of the federal government wishing almost a trillion dollars into existence, especially after the bailout slopfest that has enraged so many Americans already, we have to ask what the long-term goals of such a stimulus package would be.  What are Obama and other pro-stimulus folks hoping to accomplish?  Well, the main goals are obvious.  Stimulus is intended to prime the pump, so to speak.  The idea here is that in sluggish economic conditions, any kind of activity that gets money in people's hands for doing work of some kind is good.  This money will slosh around the rest of the economy (the multiplier effect) and get bills paid and products bought.  And what makes economic stimulus of this kind better than onerous bailouts is that the money is going to regular folks on the ground, paying them to create, fix, or improve some actual facet of the physical environment (as opposed to just handing cash to bank execs).

On the surface, then, this kind of stimulus looks very attractive.  Who could argue with fixing bridges, putting computers in schools, and building wind turbines?  Worthy goals, all.  But underneath a stimulus package like this, the implicit message is that there is nothing really structurally wrong with how we have organized our economy and society.  We have just failed to keep the infrastructural quality up to date.  We simply need to catch up with the times, and work smarter and greener -- then we'll be all set.  

But once the stimulus money seeps away into the sands, will anything really have been done to correct the major structural imbalances that got us into our troubles in the first place?  We'll have better roads and bridges, but they will still lead to the dysfunctional, wasteful, and unsustainable landscapes of suburban sprawl.  We may have computers and wind turbines all over the place, but we will still be using all of that energy and knowledge to reproduce a profoundly unequal society, where a few at the top capture the spoils and the unlucky millions in the middle or at the bottom struggle from paycheck to paycheck.  And it will all be at the service of an economic model that champions maximum consumption and endless growth.  Say we do manage to create a couple million jobs, roughly replacing the ones lost in 2008.  Will anything have been done for the permanent underclass that languishes in our swollen prison population, or for the wide swaths of "underemployed" who get swept under the rug by "official" statistics designed to hide the ugly facts about the condition of work in America?

In short, no stimulus package can "get the economy turned around."  Pumping money into the same pathological, unsustainable systems will not change the underlying logic of those systems.  We're facing the endgame of the slow collapse of structures, a process that has unwound itself over several decades.  The socioeconomic features of the near future will be very different, and some fundamental changes need to happen at the root level of our social form.  No amount of fiscal stimulus can paper over the fact that the One Person-One Job/One Family-One Dwelling social form has no future.  A different economic "home base" must be crafted, one that acknowledges the realities of Peak Oil, ecological collapse, and the exhaustion of consumer capitalism.  A different form of "we" has to emerge, a place from which people can exercise actual power and autonomy in their approaches to the marketplace, to work, to their communities, and to the health of their planet and their own psyches.