As long as economics is treated as chiefly a positive science studying how things are, rather than as a normative science, dealing with how things ought to be as well, the Right is going to win the argument, because the sole objective becomes "growth" without concern for distributive justice, the environment or anything else but "prosperity" (read "wealth").

The Left has to loudly proclaim and continually emphasize that economics includes a normative (ethical, moral) dimension as well as a positive one, and that in politics, the normative dimension is at least as important as the positive. Yes, prosperity is one of the goods at which a society aims. But the question should also be, what relation do subordinate goods like security, prosperity and so forth have to the common good?

The Department of Labor employment figures that economists were waiting for came out this AM. The economy added only a puny 18,000 jobs in December. Government hiring accounted for 31,000, while private industry CUT 13,000! The odds have increased beyond the previous 50/50 that the US is now headed for a recession.

Given the level of consumer indebtedness, this will have repercussions resounding through the global financial system and the world economy, because these debts have been securitized and spread widely. In addition to mortgages, auto loans, home equity loans, and credit card debt are in jeopardy as unemployment increases, consumer confidence decreases, and the ability to service existing debts declines, leading to increasing defaults.

The US is now at a turning point in its history and it will have enormous implications on US society as well as politics. To my mind, the most important factor in what is unfolding is the shift in Zeitgeist that is occurring as the Neoconservative era winds down and exhausts its energy.

While a number of subordinate factors are involved, it looks like it will be the economy that will provide the shock that changes the direction rather than the ME war. The economic situation is not only a cause but also a reflection of this shift. Because I think economics will manifest the shock that awakens America to the dawning of a new era, I will examine the trends I see unfolding that are leading in this direction.

The US has passed through several constitutional periods in its history.

Defining the crisis period

We are now in a period of constitutional crisis as an overwhelming majority of the country believes that the country is going in the wrong direction, as the executive branch is redefining the interpretation of the Constitution and arguing for an imperial presidency, while the opposition party which controls the legislative branch is challenging that view.

What follows is at attempt to delineate the progression of this cycle and how it might end.

In economics, the cost of a good or service that is not reflected in the market price is called an externality. For example, one of the "external" costs of oil, in addition to the huge effects of pollution, is security. The entire Pentagon budget can be looked at, in a sense, as a free protection service for the petroleum industry. Similarly, there are US businesses are now attempting to externalize social responsibilities in the form of benefits, like healthcare and pensions. They do this by reducing the pricing power of labor by undermining collective bargaining (unions) with "right to work" laws, labor arbitrage (offshoring) and low-wage no-benefit workers (migrant workers by day and illegal immigrants by night).

Immigration is being turned into a wedge issue by the Right, and "immigrants" is a xenophobic code word with racist undertones. The Left needs to reframe the debate in terms of real issues.

In an article on Asia Times Online, Syed Saleem Shahzad updates the situation in Pakistan regarding the truce between the Pakistani military and the Taliban of North Waziristan. This confirms earlier reports indicating that the Waziristan is now an atuonomous region under control of the Taliban and "foreign elements" are also free to participate. Additionally, many "terrorist" taken into custody will be freed and allowed to return to work.

Pakistan: Hello al-Qaeda, goodbye America

According to Bill Roggio's blog, the deal that Pakistan made with the Taliban of Norh Waziristan is much worse that is being reported in the media. Roggio is former Army and an embedded journalist, and his blog, the fourth rail, is devoted to non-partisan news and analysis of the GWOT. Bill Roggio