Clarke tells O'Neill that Clinton won't give the order to get bin Laden in this climate, with Republicans calling for his impeachment. O'Neill says that Clinton wants bin Laden dead - but not if he has to order it. "It's pathetic," he declares.

Back in Afghanistan, the operatives plan for the snatch job anyway, hoping for approval once it's clear they have their man. One night, they call Langley - they are ready to get bin Laden, he is nearby. "Do we have clearance?" they ask. Berger says he doesn't have authority, he would have to check, they're not all on "the same page."

A CIA official tells Berger the president has approved snatches in the past. Berger wonders about the quality of the intelligence. The CIA woman says it's never 100%. With that, Berger punts and asks Tenet if HE wants to offer a recommendation to the president. Tenet asks: Why does the buck always stop with me, like with the Waco disaster?

At that point, Berger simply hangs up - and the operatives abroad pack up and leave. Massoud asks if they are "all cowards in Washington." Again there is an immediate cut to Clinton, parsing sexual terms in his taped testimony on the Lewinsky case - and then a clip of him hugging Monica.

A little later in the film, the U.S. embassy in Nairobi is attacked, with many deaths. A CIA agent in tears yells at Tenet, saying he should have ordered the killing of bin Laden when they had the chance. O'Neill to Clarke: "Clinton has to do SOMETHING."

In particular, some critics - including Richard A. Clarke, the former counterterrorism czar - questioned a scene that depicts several American military officers on the ground in Afghanistan. In it, the officers, working with leaders of the Northern Alliance, the Afghan rebel group, move in to capture Osama bin Laden, only to allow him to escape after the mission is canceled by Clinton officials in Washington.

In a posting on ThinkProgress.org, and in a phone interview, Mr. Clarke said no military personnel or CIA agents were ever in position to capture Mr. bin Laden in Afghanistan, nor did the leader of the Northern Alliance get that near to his camp.

"It didn't happen," Mr. Clarke said. "There were no troops in Afghanistan about to snatch bin Laden. There were no CIA personnel about to snatch bin Laden. It's utterly invented."

Mr. Clarke, an on-air consultant to ABC News, said he was particularly shocked by a scene in which it seemed Clinton officials simply hung up the phone on an agent awaiting orders in the field. "It's 180 degrees from what happened," he said. "So, yeah, I think you would have to describe that as deeply flawed."

ABC then issued a statement saying that the miniseries was "a dramatization, not a documentary, drawn from a variety of sources, including the 9/11 commission report, other published materials and from personal interviews." And they said they plan to run a disclaimer with the broadcast, reminding viewers that the movie was not really a documentary. But then they are planning to send out teaching materials to schools so this can be shown in classrooms, for discussion.

It is a bit confusing, and there's confused Richard Ben-Veniste, a member of the original commission who saw part of the miniseries last week - "As we were watching, we were trying to think how they could have misinterpreted the 9/11 commission's finding the way that they had. They gave the impression that Clinton had not given the green light to an operation that had been cleared by the CIA to kill bin Laden."

The commission concluded Clinton had. Oh well.

But this is cool -

Mr. Ben-Veniste said he did, however, approve of the casting. "I like Harvey Keitel," he said of the actor who plays John O'Neil, the onetime FBI counterterrorism expert who died in the attacks. "I liked him in 'Mean Streets.' I'm a fan."

The reason this matters so much, and why Democrats are so apoplectic at the way ABC has handled this material, is that popular culture has a way of inculcating certain concepts into people's minds, especially young minds, far more effectively than talking head programs or earnest debates among political bloggers and columnists. This is the kind of thing that could taint the debate for generations if it takes hold.

The right howled mercilessly at Oliver Stone's depictions of JFK and Nixon, claiming that he was rewriting history. He was, and he used very clever techniques to do it - particularly the odd, dreamlike optical montages that feel like memories. But the key is that these films were about events that happened long in the past - they were re-writing history, not writing the first draft while the immediate events were still being debated. Certainly, nobody sent out high school study guides saying they were based on fact or claimed they were based on The Warren Commission Report or Nixon's memoirs. Stone never claimed that he was depicting a factual account but rather always said that he was providing an "alternate history."

"Path to 9/11" is using the sophisticated techniques (if not the talent) of Stone's "alternate history" style to create an alternate reality in real time.

… If this nonsense is allowed to stick, we will be battling these inaccurate demagogic, phantoms for another 50 years - and I don't think the country will survive it. These new right-wingers make the red-baiters of the 50's look like Gandhi. In order for the Republicans to maintain power as often and as much as possible, they must find a way to blame the Democrats for terrorism and ensure that neither party can ever stray from the most hard line they can possibly maintain. It's the same formula that killed over 50,000 Americans in Vietnam and it's going to do far worse this time out if we let it happen again.

Disney/ABC cancelled the reality show featuring a gay couple, "Welcome To The Neighborhood," ten days before it was to air when James Dobson and the religious right threatened to withdraw their support for the conservative classic "Narnia."

Disney refused to allow its subsidiary Miramax, which specialized in controversial fare, to distribute "Fahrenheit 9/11" allegedly because they felt it was too political.

They made a deal with Mel Gibson, beloved on the religious right for his film "The Passion," to produce a film about the Holocaust even though they knew at the time he held extremely controversial views about the Holocaust and Judaism. They only cancelled the project when he was caught by the police drunkenly saying "all the wars in the world are caused by the Jews."

Now they have produced a blatantly rightwing work of fiction which they are saying is based on the official 9/11 Commission report and they are giving it away without any advertising. They sent out hundreds of screening copies but failed to send any to the Clinton administration officials who are trashed in the film or to liberal columnists….

There's a pattern here folks and it isn't a pattern that shows ABC knuckling under to liberals. There is a huge amount of money at stake in all these decisions, but for some reason Disney seems to be more than willing to throw it away when it benefits the right wing: already produced films and TV shows are either cancelled or allowed to be distributed by others, while hugely expensive, controversial rightwing mini-series' are broadcast with no advertising and allowed to be downloaded for free by I-tunes.

Isn't that something that Disney shareholders should be just a little bit concerned about? If ABC is protecting its "Narnia" franchise, at some point you have to look at whether the price they are paying is too high. If they have thrown this kind of money away to appease the GOP for business reasons then their shareholders have just been taken to the cleaners. The old K Street Project is dead and when Democrats take congress this fall they aren't going to be happy. They are on to it.

If Disney/ABC is giving away free air time for conservative projects and denying distribution to programs that don't favor the Republican Party, then perhaps somebody needs to look at whether this stuff is legal. There are laws regulating corporate giving to campaigns. By not showing advertising it seems to me that it's not impossible to make a case that this latest is a free gift to the Republican Party just weeks before an important election.

Pessimism claims an impressive following - from Rousseau, Schopenhauer, and Nietzsche, to Freud, Camus, and Foucault. Yet "pessimist" remains a term of abuse - an accusation of a bad attitude - or the diagnosis of an unhappy psychological state. Pessimism is thought of as an exclusively negative stance that inevitably leads to resignation or despair. Even when pessimism looks like utter truth, we are told that it makes the worst of a bad situation. Bad for the individual, worse for the species - who would actually counsel pessimism?

Joshua Foa Dienstag does. In Pessimism, he challenges the received wisdom about pessimism, arguing that there is an unrecognized yet coherent and vibrant pessimistic philosophical tradition. More than that, he argues that pessimistic thought may provide a critically needed alternative to the increasingly untenable progressivist ideas that have dominated thinking about politics throughout the modern period. Laying out powerful grounds for pessimism's claim that progress is not an enduring feature of human history, Dienstag argues that political theory must begin from this predicament. He persuasively shows that pessimism has been - and can again be - an energizing and even liberating philosophy, an ethic of radical possibility and not just a criticism of faith. The goal - of both the pessimistic spirit and of this fascinating account of pessimism - is not to depress us, but to edify us about our condition and to fortify us for life in a disordered and disenchanted universe.

CHAPTER ONE: The Anatomy of Pessimism
CHAPTER TWO: "A Philosophy That Is Grievous but True": Cultural Pessimism in Rousseau and Leopardi
CHAPTER THREE: "The Evils of the World Honestly Admitted": Metaphysical Pessimism in Schopenhauer and Freud
CHAPTER FOUR "Consciousness Is a Disease": Existential Pessimism in Camus, Unamuno, and Cioran
CHAPTER FIVE: Nietzsche's Dionysian Pessimism
CHAPTER SIX: Cervantes as Educator: Don Quixote and the Practice of Pessimism
CHAPTER SEVEN: Aphorisms and Pessimisms
CHAPTER EIGHT: Pessimism and Freedom (The Pessimist Speaks)

Americans of all stripes tend to treat pessimism as if it were a psychological impairment or rare tropical illness that inexplicably befalls others. Jimmy Carter was widely criticized when he dared to suggest that there existed a U.S. "crisis of confidence," a mistake Ronald Reagan exploited when he announced "Morning in America." During the presidential race of 2004, the candidates of both parties competed avidly for the title of most optimistic. But Bush's verbal fumbling on a question about the Iraq war indicates that there are some situations - unfortunately, very common ones - for which the language of optimism is not helpful.

The first modern pessimists were dissenters from the Enlightenment notion that the world would be remade according to reason. Jean-Jacques Rousseau, for example. He is often remembered as a precursor to the French Revolution, but he was in fact deeply suspicious of what became the revolutionaries' alternative faith: inordinate belief in their own rational powers.

What Rousseau sought to emphasize was simply that we lacked the tools to master history and bring it to heel. "Everything is in continual flux on Earth…." he wrote. "All our plans for felicity in this life are idle fancies." Politics, like personal life, was a place where grand strategies could and often did go awry. We should celebrate the good that happened but not delude ourselves that the overall pattern of the universe is pre-made in our favor.

This doesn't mean that reason is useless. Rousseau had a variety of philosophical inheritors and, though they disagreed on many things, one point they generally had in common was the idea that reason served humans best by divesting them of politically dangerous illusions.

The president's claim that he is "rarely surprised" doesn't ring true; it seems like a particularly desperate effort to assert some control over a situation in which every supposed sign of progress in Iraq is undercut by more violence. Optimists, expecting things to go well, are constantly surprised and disappointed when their illusions are punctured. It is the pessimists, expecting little, who are rarely surprised.

It is sometimes claimed that pessimism retards political action, that one must somehow be an optimist in order to get out of bed in the morning. This is not only silly but dangerous. If one looks at the writings of, say, Albert Camus or Vaclav Havel, both philosophers who also were active in resistance against tyranny, it's easy to see that they had no expectations their actions would defeat what seemed like an overwhelming foe. They were as surprised as anyone when the regimes they opposed collapsed. They acted not out of optimism but out of a sense that opposing dictatorship was the only decent thing to do, the only way to live with dignity in dark times.

Camus liked to say that he wasn't interested in the future at all: "He who dedicates himself to … history dedicates himself to nothing and, in his turn, is nothing." Instead, we should engage in "giving all to the present," which meant dealing with the problems that appear on our doorstep rather than trying to vindicate an idealized destiny, the "visible direction" of history. (Perhaps if this administration had paid a little less attention to the tides of history, it might have had more time to deal with the actual floodwaters.)

The White House today is battling to control the journalistic narrative in the days before the fifth anniversary of the Sept. 11, 2001, terrorist attacks.

There are so many ways that journalists could help the public assess the last five years.

We could, for instance, trace the dramatic expansion of executive power in the name of fighting the war on terror.

We could expose the failures that have plagued the administration's initiatives to coordinate homeland security and emergency response.

We could write about Iraq, the most conspicuous, costly, deadly, and arguably counterproductive byproduct of President Bush's post-September 11 mentality.

We could expound on America's dramatic loss of moral authority, prestige and influence on the world stage.

We could reflect upon the administration's continued stoking of Americans' fears for political purposes.

But that's not what the White House wants, of course.

And while the White House can't exactly prevent journalists from writing whatever we want, the president does have a great way of forcing us to take notice of whatever it is that he wants. It's called a "series of major speeches" on the "Global War on Terrorism."

President Bush today renewed his pledge to accept nothing less than "complete victory" in the war on terrorism and delivered a strong warning to Iran, which he described as the leader of a strain of Islamic radicalism just as dangerous as that of al-Qaeda.

In a speech in Washington following the release of an updated strategy document on combating terrorism, Bush repeatedly quoted statements by Osama bin Laden and other al-Qaeda leaders to highlight the radical Sunni Muslim group's "totalitarian" aims, which he said recalled the "evil" ambitions Vladimir Lenin and Adolf Hitler. He said the centerpiece of those aims is the transformation of Iraq into the capital of an Islamic caliphate spanning much of the globe.

"What I hear is the beating tom-toms of another military action taking form against Iran. And I think it's time that the American government stepped forward and talked to people we disagree with, before we start dropping bombs on them."

Clark called the invasion of Iraq "a strategic blunder" that has been "counterproductive in winning the war on terror."

As a result of the Bush administration's policies, "we've lost over 2,600 soldiers and Marines in Iraq," Clark said. "We've spent over $300 billion, with maybe $1 trillion or more on the line. We've seriously damaged our armed forces. … We've reduced our diplomatic leverage around the world. And despite all the trumpeting of patriotism by this administration, this administration and the Republican leadership in the Congress have weakened our country and made Americans less safe at home."

Afghanistan is slipping back into chaos, Pakistan is one coup away from becoming a radical Islamic state with nuclear weapons, Iran is closer to a nuclear arsenal, and Iraq has become a recruitment poster for terror.

Iraq isn't exactly at the center of it. The word "Iraq" comes up just nine times in the 29-page report, and at least a couple of those are attempts to minimize the role the Iraq war plays in the president's "global war on terrorism." "Countries that did not participate in coalition efforts in Iraq have not been spared from terror attacks," the report says. "The ongoing fight for freedom in Iraq has been twisted by terrorist propaganda as a rallying cry," the report says.

What about Iraq as the "central front" in the war on terror? Oh, it's in there, too - as in, "Terrorists see Iraq as the central front of their fight against the United States."

So what's the central front in the GWOT now? Well, you might think it would be the hunt for the man who masterminded the attacks against the United States five years ago. But Osama bin Laden gets just a single mention in the report, and even then only as an example used to make a larger point: Arguing that terrorism isn't "an inevitable by-product of poverty," the report notes that "many terrorist leaders, like bin Laden, are from privileged upbringings."

It would all be so surprising if it were surprising at all. The president said long ago that he doesn't spend much time thinking about bin Laden, and the CIA last year quietly disbanded the unit that had been assigned to hunt for him. As for Iraq, the White House has some delicate detangling to do. If the polls are to be believed, the fight against terrorism remains the Republicans' sole strong point with voters. At the same time, a substantial majority of the public disapproves of the way Bush is handling the war in Iraq. Having spent the better part of the past four years linking 9/11 to Iraq and Iraq to the overall war on terrorism, the GOP now must find a way to cash in on voters' fears about future acts of terrorism without tainting the argument with the reality that has already come to pass in Iraq.

So just like that, Iraq becomes the central front in the war on terror only in the twisted minds of terrorists. The real central front? It's in Iran, in Syria, in North Korea, on the Internet and in small, decentralized terror cells. "Terrorist networks today are more dispersed and less centralized," the report says. "They are more reliant on smaller cells inspired by a common ideology and less directed by a central command structure." Translation: Forget Iraq. Forget bin Laden. The terrorists are everywhere now. And if you want to keep your family safe from them - unless, of course, one of your family members happens to be serving in Iraq - you'd better vote for the Republicans on your ballot in November.

Washington has a long habit of painting its enemies 10 feet tall - and crazy. During the cold war, many hawks argued that the Soviet Union could not be deterred because the Kremlin was evil and irrational. The great debate in the 1970s was between the CIA's wimpy estimate of Soviet military power and the neoconservatives' more nightmarish scenario. The reality turned out to be that even the CIA's lowest estimates of Soviet power were a gross exaggeration. During the 1990s, influential commentators and politicians - most prominently the Cox Commission - doubled the estimates of China's military spending, using largely bogus calculations. And then there was the case of Saddam Hussein's capabilities. Saddam, we were assured in 2003, had nuclear weapons - and because he was a madman, he would use them.

It is not quite right to say that "Washington" has a habit of doing this. Zakaria should instead say that "hysterical Republican hawks" have a habit of doing this.

Accuracy is important in these matters. For the record, then: "Team B" was a creation of George H.W. Bush and included such members as Richard Pipes, Paul Wolfowitz, and Edward Teller. The Cox Commission was the brainchild of Congressman Christopher Cox (R-Calif.). And Saddam's nuclear bombs were the fantasy product of Dick Cheney, Donald Rumsfeld, George Bush, et. al.

This quibble aside, the column is very good. The fever swamp hysteria floating around right-wing circles has become increasingly desperate in recent weeks, and Zakaria does a good job of showing it up for the infantile yowling that it is. Democrats who want to be taken seriously on foreign policy could do worse than have it stapled to their foreheads.

Every now and again I give the president the benefit of the doubt, try to see things from his side, walk a mile or so in his manly brush-clearing workshoes as it were. So, I'm George W. Bush, right? I have launched a war that I have repeatedly said is a critical response to an existential threat to Western civilization that is as serious as were those of Nazi Germany and the Soviet empire. Things have not gone well. And most of the country doesn't trust me when I tell them why I'm doing what I'm doing. (Most of the country doesn't trust me if I tell them the sun rises in the East, but that's a whole 'nother mile in them workshoes.) Nevertheless, the threat is real and it is growing and I can't get the country to see it.

Why, then, do I give all my speeches to captive audiences of people who either already believe what I believe or who get paid to serve under my steady hand as commander-in-chief? Doesn't the seriousness of the threat, and the requirements of my job, mandate that I go out into the most skeptical parts of the country and do my convincing there? After all, when confronting the Depression or the growing threat in Europe, FDR didn't send out the fireside chats by subscription only. When Lyndon Johnson wanted to convince people on the need for civil rights legislation, he didn't bring Hubert Humphrey over from the OEOB for a chat. He brought in George Wallace, and damned near got him, too. Shouldn't I have had Cindy Sheehan in for BBQ? Shouldn't I be making my speeches in those places where the war is the least popular? Shouldn't I be convincing the people who most need convincing? Shouldn't I be speaking in Boston or Berkeley? Shouldn't I be talking to town hall meetings in Vermont and Oregon? Aren't I president of all the United States? These shoes are not comfortable at all.

"We'll lose the House," one of the party's most prominent officials flatly predicted, "and the President will be dead in the water for two years." Even a perennially optimistic senior Bush strategist conceded, "I'm pretty worried about it. The House is not looking good."

The idea here is that absent the US military, we would be handing Iraq over to some nefarious - and, admittedly, it would be quite nefarious - coalition of Baathists, Iranians, and al-Qaedists, presumably joined by Dr. Evil and the Cobra Commander. Back in the real world, though, these groups are fighting each other. What's more, the "armed groups with ties to Iran" include the political parties that comprise the Iraqi government. So what is it our troops are accomplishing amidst this frothy mix of bad actors?

There are many advantages to our political system vis-a-vis the British Parliamentary model, but one advantage of the latter is that you can hold a leader accountable. A Prime Minister who has screwed the pooch as badly as Bush very well could have lost his position as party leader.

In an ideal world, it would be possible to win the war in Iraq, which Bush is right we need to do, and hold Bush accountable for having made it necessary for us to win the war in the first place.

For cash-strapped homeowners, it was a pitch they couldn't refuse: Refinance your mortgage at a bargain rate and cut your payments in half. New home buyers, stretching to afford something in a super-heated market, didn't even need to produce documentation, much less a down payment.

Those who took the bait are in for a nasty surprise. While many Americans have started to worry about falling home prices, borrowers who jumped into so-called option ARM loans have another, more urgent problem: payments that are about to skyrocket.

The option adjustable rate mortgage (ARM) might be the riskiest and most complicated home loan product ever created. With its temptingly low minimum payments, the option ARM brought a whole new group of buyers into the housing market, extending the boom longer than it could have otherwise lasted, especially in the hottest markets. Suddenly, almost anyone could afford a home - or so they thought. The option ARM's low payments are only temporary. And the less a borrower chooses to pay now, the more is tacked onto the balance.

The bill is coming due. Many of the option ARMs taken out in 2004 and 2005 are resetting at much higher payment schedules - often to the astonishment of people who thought the low installments were fixed for at least five years. And because home prices have leveled off, borrowers can't count on rising equity to bail them out. What's more, steep penalties prevent them from refinancing. The most diligent home buyers asked enough questions to know that option ARMs can be fraught with risk. But others, caught up in real estate mania, ignored or failed to appreciate the risk.

There was plenty more going on behind the scenes they didn't know about, either: that their broker was paid more to sell option ARMs than other mortgages; that their lender is allowed to claim the full monthly payment as revenue on its books even when borrowers choose to pay much less; that the loan's interest rates and up-front fees might not have been set by their bank but rather by a hedge fund; and that they'll soon be confronted with the choice of coughing up higher payments or coughing up their home. The option ARM is "like the neutron bomb," says George McCarthy, a housing economist at New York's Ford Foundation. "It's going to kill all the people but leave the houses standing."

Because banks don't have to report how many option ARMs they underwrite, few choose to do so. But the best available estimates show that option ARMs have soared in popularity. They accounted for as little as 0.5% of all mortgages written in 2003, but that shot up to at least 12.3% through the first five months of this year, according to FirstAmerican LoanPerformance, an industry tracker. And while they made up at least 40% of mortgages in Salinas, Calif., and 26% in Naples, Fla., they're not just found in overheated coastal markets: Through Mar. 31 of this year, at least 51% of mortgages in West Virginia and 26% in Wyoming were option ARMs. Stock and bond analysts estimate that as many as 1.3 million borrowers took out as much as $389 billion in option ARMs in 2004 and 2005. And it's not letting up. Despite the housing slump, option ARMs totaling $77.2 billion were written in the second quarter of this year, according to investment bank Keefe, Bruyette & Woods Inc.

Gordon Burger is among the first wave of option ARM casualties. The 42-year-old police officer from a suburb of Sacramento, Calif., is stuck in a new mortgage that's making him poorer by the month. Burger, a solid earner with clean credit, has bought and sold several houses in the past. In February he got a flyer from a broker advertising an interest rate of 2.2%. It was an unbeatable opportunity, he thought. If he refinanced the mortgage on his $500,000 home into an option ARM, he could save $14,000 in interest payments over three years. Burger quickly pulled the trigger, switching out of his 5.1% fixed-rate loan. "The payment schedule looked like what we talked about, so I just started signing away," says Burger. He didn't read the fine print.

After two months Burger noticed that the minimum payment of $1,697 was actually adding $1,000 to his balance every month. "I'm not making any ground on this house; it's a loss every month," he says. He says he was told by his lender, Minneapolis-based Homecoming Financial, a unit of Residential Capital, the nation's fifth-largest mortgage shop, that he'd have to pay more than $10,000 in prepayment penalties to refinance out of the loan. If he's unhappy, he should take it up with his broker, the bank said. "They know they're selling crap, and they're doing it in a way that's very deceiving," he says. "Unfortunately, I got sucked into it." In a written statement, Residential said it couldn't comment on Burger's loan but that "each mortgage is designed to meet the specific financial needs of a consumer."

... Most of the pain will be born by ordinary people. And it's already happening. More than a fifth of option ARM loans in 2004 and 2005 are upside down - meaning borrowers' homes are worth less than their debt. If home prices fall 10%, that number would double. "The number of houses for sale is tripling in some markets, so people are not going to get out of their debt," says the Ford Foundation's McCarthy. "A lot are going to walk."

Jennifer and Eric Hinz of Somerset, Wis., are feeling the squeeze. They refinanced out of a 5.25% fixed-rate, 30-year loan in June, 2005, and into an option ARM with a 1% teaser rate from Indymac Bank. The $1,483 payment for their original mortgage dropped to as low as $747 with the new option ARM. They say they had no idea when they signed up, however, that the low payment adds $600 in deferred interest to their balance every month. Worse, they thought the 1% would last three years, but they're already paying 7.68%. "What reasonable human being would ever knowingly give up a 5.25% fixed-rate for what we're getting now?" says Eric, 36, who works in commercial construction. Refinancing is out because they can't afford the $15,000 or so in fees. "I'm paying more, and the interest is just going up and up and up," says Jennifer, 34, a stay-at-home mom. "I feel like we got totally screwed." They say their mortgage broker has stopped returning their phone calls. Indymac declined to comment on the loan's specifics.

This is a bad business, an essentially unregulated free market. The miraculous "invisible hand" Adam Smith was talking about, unfettered competition, the "hand" that produces the greatest good for the greatest number, is slapping a lot of folks around, and hard.

The political dimension to this, as the election approach, is that the conservatives in control of the government worship this miraculous "invisible hand" Adam Smith was talking about, unfettered competition, the "hand" that produces the greatest good for the greatest number. It is the cornerstone of so much of what we're told is how the world works - deregulate business, help no one with any social programs so they develop personal responsibility, and the nation will thrive.

But what about the angry people?

Duncan Black suggests this -

If, as I cautiously predict, we're about to hit a massive foreclosure wave which is going to hit people at just about every income level there is a certain party whose name starts with the letter 'D' which might find it beneficial to start branding themselves as Friends of Homeowners with some smart policy proposals to back them up.

Off the top of my head this could include cracking down on bad lending practices, providing legal assistance to victims of dishonest lending practices, removing impediments to prepayment and refinancing, and, of course, repealing the bankruptcy bill...

The coming option ARM train wreck combines consumer fraud with (in this case purely legal) corporate book-cooking. Democrats need to start pounding the table now to take full political advantage of the disaster as it unfolds. I especially like the idea of legal assistance for victims of mortgage brokers' flim-flam tactics.

Of course, the Republicans could beat the Democrats to the punch by actually doing something about the problem before it turns into a catastrophe, but it's a safe bet they won't.

Note that the option ARM crunch has the potential to make the housing-price landing a good deal harder.

Usually, when house prices go down, sellers pull back; you could describe this as speculative holding or as loss aversion, but either way transaction volume drops because homeowners don't want to sell their places for less than they think them to be worth.

But people who can't make their suddenly "adjusted" option-ARM payments, and don't have any equity to refinance, may have no alternative to a distress sale except foreclosure, and the banks aren't going to want to sit on piles of houses either. So we might see the sort of "selling climax" that characterizes the end of a stock-market dive.

The difference is that big institutions don't generally buy individual houses as investments, so it's hard for big pools of speculative money to come in if a selling panic leaves houses under-priced compared to some external standard of value such as the capitalized value of the rent. Being ready to step up and buy in the face of that sort of crisis is an excellent way to get either rich or broke in a hurry.

What we have watched unfold for a few decades, I have argued, is a broad reversion to 19th-century political form, with free-market economics understood as the state of nature, plutocracy as the default social condition, and, enthroned as the nation’s necessary vice, an institutionalized corruption surpassing anything we have seen for 80 years. All that is missing is a return to the gold standard and a war to Christianize the Philippines.

There are still some pundits out there lecturing people about how great the economy is. But most analysts seem to finally realize that Americans have good reasons to be unhappy with the state of the economy: although GDP growth has been pretty good for the last few years, most workers have seen their wages lag behind inflation and their benefits deteriorate.

The disconnect between overall economic growth and the growing squeeze on many working Americans will probably play a big role this November, partly because President Bush seems so out of touch: the more he insists that it’s a great economy, the angrier voters seem to get.

The "good" news is that the poverty rate, the proportion of Americans who are poor, didn't change much between 2004 and 2005, falling in a statistically insignificant way from 12.7 percent to 12.6 percent. The bad news is that the poverty rate, having risen steadily in recent years, is still higher than it was in 2001, when it stood at 11.7 percent.

Worse is that the proportion of the poor who are very poor has risen. People are considered in deep poverty if they have half or less of the yearly income of those at the poverty line. In 2005 half the poverty line for a family of three was $7,788; for a family of four it was $9,985. (Try living on that.) According to the new report, 43.1 percent of poor people lived in that sort of deep poverty - a record since 1975, when the government started assembling such statistics.

In the six economic recoveries since the early 1960s, this is the first time the poverty rate was higher in the recovery's fourth year than it was when the recession was at its worst.

The number of Americans without health insurance rose, too, to 46.6 million in 2005, up from 45.3 million in 2004 and 41.2 million in 2001. The proportion without insurance is up from 14.6 percent in 2001 to 15.9 percent in 2005.

What about the middle class? Yes, the median income of American households rose by 1.1 percent last year after five years of decline. But most of the growth was in households headed by Americans 65 and over -- who are helped, rightly, by substantial government benefits. In households headed by people under 65, incomes fell yet again.

… The census had some very good news for the well-to-do. The top fifth of American households received 50.4 percent of all income last year, the highest proportion since 1967, when the Census Bureau started following that trend. The biggest gains were concentrated in the top 5 percent.

"The economy is growing, and someone is getting the growth," said Sharon Parrott, a senior analyst at the liberal Center on Budget and Policy Priorities. "So now we know who it is."

President Bush and the Republican Congress, take a bow: You took power to make the well-off even better off, and you have succeeded brilliantly.

The number of Americans calling themselves Republican has fallen to its lowest level in more than two-and-a-half years. Just 31.9% of American adults now say they’re affiliated with the GOP. That’s down from 37.2% in October 2004 and 34.5% at the beginning of 2006.

… The number of Democrats has grown slightly, from 36.1% at the beginning of the year to 37.3% now. Those who claim to be unaffiliated have increased to 30.8% this month. That’s the highest total recorded since Rasmussen Reports began releasing this data in January 2004.

Add it all together and the Democrats have their biggest net advantage - more than five percentage points - since January 2004. In the first month of 2006, the Democrats’ advantage was just 1.6 percentage points. Last month, 32.8% of adults said they were Republicans and 36.8% identified themselves as Democrats.