James Wolcott: The Long Hot Summer, the Long Cold Winter

James Wolcott: The Long Hot Summer, the Long Cold Winter: James Wolcott quotes Lee Mikles, a Wall St. short seller: "Bottom line, the consumer is broke and he doesn't know it yet. But he is about to find out. All the buckets that propelled consumer spending are empty now, whether it is the increase in mortgage debt, the increase in consumer debt or the reduction in the savings rate. No one statistic will tip the scale at the end of the day. But one very obvious and very curious statistic is that we have dipped into a negative savings rate for the first time. That is not only unsustainable, it is sustainable only for a few months. That's important to note because it tells you consumers are borrowing money to make debt payments."



Now, that Katrina's ill-wind has shown a few more people that the Emperor has no clothes, we have only to await imminent economic collapse. Oh, joy.



Bush has pursued economic policies that give profligacy a new meaning. It has been done in the service of making the very wealthy, wealthier still, at the expense of everyone else. Now, we come to the expense part, where the incomes of the American middle class join the poor in actual decline.



Will there be a noticeable crisis, or will the decline be obscured and gradual, more warming the lobster in the pot?