Real wages over the last year are flat to down (depending on whether one looks at hourly or weekly numbers). Together with continuing high unemployment, high home foreclosures, reduced job benefits, increased job insecurities, and a continuing trend of replacing relatively higher wage jobs with lower wage jobs, prospects for a return to prosperity and growth are dim indeed. The spikes in auto loans and student loans will not likely last long. Household deleveraging is the dominant trend (based on surveys and declining credit card debt).  Once aged cars are replaced and students discover the futility of borrowing to increase job-related credentials, there will likely be cutbacks in spending to cope with (offset) the unsustainable debt spikes for cars and tuitions. Problems in Europe and elsewhere likewise suggest real limits to the growth of US exports. Corporate profit deceleration suggests real limits on investment expenditures.

    Thus, no part of aggregate spending looks to be in a position to fuel a sustained or broad recovery. If this becomes clear before November, it will hurt Obama’s chances. If he can stall mass clarity on this problem until after the elections, there will then be a serious aggravation of existing social tensions around the economy’s passage, in December, to the 6th year of this prolonged capitalist crisis.

    If, as the French polls suggest, Sarkozy loses and Hollande goes through with raising income tax rates on the rich, etc., the consensus around austerity policies to cope with Europe’s deep crisis may dissolve. Internal conflicts in at least Greece, Spain and Italy will accelerate into unpredictable forms and consequences globally. China’s export markets will become more complicated and threaten China’s economy and those of all the countries that have come to depend on it. Extreme uncertainty and uncertain extremes.