A Very Angry Public

David Ignatius has a scary dream, where he sees the economic downturn continuing for years, wrecking havoc in our political life. Speaking of the Feds latest meeting and the report from it, he writes:

It's a genuinely troubling document, as much for its political implications as for its number-crunching. It draws a picture of a nation of unfair and unequal sacrifices, where Wall Street is recovering even as Main Street continues to pay the bills.

If the Fed's projections are right, the public is going to be very angry next year -- at big business and at the elected officials who have spent trillions of dollars without putting the country fully back to work. Lou Dobbs, the voice of populist anger, may become the nation's hottest politician. President Obama, who has struggled to find a centrist consensus for economic policies, may be tossed like a cork on a stormy sea.

The Fed struggled to answer the basic question that is haunting administration policymakers: Why has unemployment remained so high, even as the economy has started to grow again and the stock market has been on a tear? The Fed's answer is that businesses, having been burned by the recession, are wary about adding more workers or making new investments. Like consumers who have just discovered the virtues of saving, their prudence -- however sensible on an individual basis -- is a collective drag on the economy.

Putting the numbers together, the Fed predicts that despite a growing economy, unemployment will be 8.2 to 8.6 percent during 2011, down only about a percentage point from 2010. And here's the scariest line of all in the Fed minutes: "Most participants anticipated that about five or six years would be needed for the economy to converge fully to a longer-run path" and a normal job market.

The politics of rage aren't pretty. But in this case, it's hard to argue that the anger isn't justified. The Fed's analysis shows what we see in the daily stock market summaries. People on the top are recovering their losses; people on the bottom are out of work and out of luck.

Why in the world this could work to the Republican's advantage, who in general support the rich and wealthy against the little guy, is a mystery? But that's probably what's going to happen, since Obama has been seemingly more solicitous of the needs of the bankers than the workers.

What's so sad is the Republicans will not do a thing to truly help the little guy. But the choices in our political system are so narrow, that the GOP will still benefit from the protest and anti-incumbant vote.

We're in for a rough ride, I'm afraid.