With the US immersed in one of its weekly presidential elections – they seem to be that frequent – nothing substantial can be done about our malaise. No one wants to do anything for fear of inciting a tsunami of attack ads, venomous deformations of the truth, and contorted definitions of what is actually going on. Too much is at stake for anyone to make a move. So we drift instead. This is more a function of the extraordinary divide in our politics than it is of the electoral system itself, but it is, nonetheless, the primary cause of our problems. While we clearly have an ideological battle being waged within economics, it pales by comparison to that in our politics. Until one side or the other emerges victorious, or at least sufficiently dominant to do what it proposes, we will be stalled. That, I think, could take a decade or more.

The only person in Washington to talk much about our problems this week was John Boehner, the indefatigable leader of the Tea Party House Republicans, who gloomily predicted that there is little or no chance of reaching a compromise over the onrushing ‘fiscal cliff’ at year end. This may be because his definition of a compromise appears to require total capitulation on the part of the White House with respect to all it holds dear, or it may be because he realizes that he has lost control over his own party and that the zealots now run the show. The fiscal cliff, you may recall, is the combination of radical spending cuts and tax increases put in place after the last compromise effort as a nuclear armageddon like warning to force more compromise. It is a testimony to the hatred and bitterness that pervades our politics that the only way to engender discussion is a threat so dire that the economy, and tens of millions of people, would be thrown under the bus if those discussions are not fruitful.

Meanwhile the deep sleep continues.

Our malaise appears never ending. When the crisis broke upon us I among many predicted it might take a decade or more for us to recover. That grim prognosis was based on the economics, not the politics. The problem is that the rotten economics that brought us the crisis has not been purged and the consequent malaise has proven a fertile breeding ground for the extreme right’s extraordinarily radical vision. While comparison with Weimar Germany is not accurate in entirety – despite the vitriol we do not have Hitler on the rise – the thematic comparison is quite appropriate.

Our deep sleep continues because our elite is stuck in a broken world view. It is educated in and committed to a set of ideas that are long decisively disproven, and cannot re-educate itself fast enough to keep up with events. Our media is obsessed with a mindless and dangerous search for relativist equality. It lost its ability to distinguish between a good argument and a bad one. Rather it gives credence to all arguments on an equal footing no matter how radical they are. And no matter how little substance there is in support. This is because our media is either lazy, ignorant, or incompetent. My guess is all three. It, too, suffers from an over education in bad ideas. It too is stuffed to the gunnels with too-clever-by-half people whose goal is self aggrandizement not reportage. And it too is easily bought.

So when Mitt Romney and Paul Ryan give us an economic plan that exists in mid-air devoid of detail and full of vaporous platitudes no one treats it with the derision it so clearly calls for. Instead they solemnly repeat its outline and offer it to the voters without comment, critique, or analytical thought. They have shrunk their self-defintion to one of being a mere conduit. They no longer add value. But they do add cost: their lack of thought allows disinformstion to flood unfiltered to cloud discussion.

This is not to argue that Obama’s plan is terrific, but at least its clear in what it does. Whether it works is something we can debate based upon its content not upon the series of winks, nods, and hand waving that form the most structured part of the Romney/Ryan alternative.

Within this fog it is no wonder that the economy wanders around aimlessly.

Our small business owners are a dogged lot. They persist despite being perpetually dyspeptic. Take, for instance, this week’s report from the Federation of Independent Business Owners. It tells us that small business owner optimism rose slightly last month to reach a reading of 92.9. That compares with a pre-crisis level of 94.4 and a high of 94.5 in February this year. It only fell to a low of 86.5 in the depths of the crisis, so clearly small business owners are an upbeat crowd even in the grimmest of moments. This happy outlook doesn’t accord with the way in which they are constantly being positioned by our politicians. To listen to an average politician is to listen to a dirge of end-of-the-world proportions. In those speeches our small businesses are all about to close up shop because of the oppression of high taxes, high regulation, rotten banks, and goodness knows what other plagues that afflict them. Yes, small business is a significant part of the economy, and it needs to be kept healthy, but small business owners get into business with their eyes wide open, and they appear to be happy to do so. Their attitude contradicts the grim picture painted by our leadership. Perhaps said leaders ought to read the news.

Then there’s the job market. Oh dear.

The recent string of mildly better news was broken last week with the report that the economy only added 92,00 jobs in August. That’s less than the growth in the population and is abysmal. But not surprising. In an economy starving for demand it can be no shock to learn employers don’t want to hire. The number of job openings being currently advertised stood at 3.66 million in July. That’s down from June’s 3.72 million, but is up about 9% over the last year. That means there are about 3.5 job seekers per job, also down from last year when the ratio hovered above 4 . The monthly number of new hires also fell a little in July, down to 4.23 million, from 4.28 million, but so too did the combination of layoffs and other quits by workers, from 4.25 million in June to 4.06 million in July. So the underlying job market is slightly better after another long year of effort. It just isn’t recovering quickly enough to lift the nation’s mood.

Trade too is firmly stuck. The report that the trade gap grew very slightly, but was still close to its 18 month low, induced a hearty yawn all round. The real news is that exports stalled because of worldwide economic problems, and that imports weakened on the back of slightly less domestic US activity as well. The problem is that, though tis news is largely neutral for GDP, it also suggests that an emphasis on trade as an engine for recovery is a fool’s game. It would be far better to deal with our domestic issues. But they are more intractable because of the politics, and politicians always sound good and patriotic when they urge on our exporters.

Finally there’s monetary policy. Are we going to get another round of easing? Will the great ship QE3 be launched? Who knows? Never has the Fed been more politicized. Never has it been more transparent. And rarely, if ever, has it been more indecisive. The Republicans are lashing out at the Fed for its efforts to help the economy. So committed are they to doing nothing that might assist growth they disparage poor old Ben Bernanke at every turn. Worse still: we are being treated to a steady diet of gold standard, Fed abolition, and other radical ideas from the libertarians who infest the modern GOP. Only the briefest review of history is needed to see how rotten such ideas are, but apparently going all out to repeat the errors of the past is now the driving force behind the extreme right’s economic vision. It’s no wonder the Fed dithers.

No wonder, but a disappointment all the same.

So the deep sleep continues and the other news offers little insight into its end.

Meanwhile it’s all eyes on November. Right now it looks as if Obama will squeeze out the win. Whether that means a break in the political impasse I highly doubt. My thought is that this election will be the high water mark of the Tea Party’s power. Demographics will cause the steady erosion of the extreme right’s attraction from here on out. Which is why it is so raucous now. This is the last chance it has to trash re-cast America in its libertarian image. If Obama wins his health care reform will become entrenched and will gain in popularity. As for economic policy: I see only modest hope and endless fights over the budget.

The deep sleep will take, in other words, the full decade to be cured.

Remember the doggie paddle? That’s what the economy’s doing. Lots of effort. Lots of splashing about. Even more huffing and puffing. All to little or no avail. We’re going nowhere. And we’re not going there very quickly.

On Tuesday we learned from the Institute for Supply Management that the manufacturing sector has lost momentum. Less than half of our factories are reporting growing business. The ISM index slipped very slightly to 49.6% in August from july’s 46.8%. That decline is meaningless, but that fact that both months saw readings below 50% is not. Obviously manufacturing is not as robust as it was earlier in the year. The combination of Europe’s continuing woes, and our own tepid growth more than explains why factories are not expecting more business. Still there is no sign of a collapse, so we can add this news to the steady trickle of mediocrity that is now all too familiar.

A little more surprising was Tuesday’s news of a 0.9% drop in construction spending in July. The biggest decline was in private residential construction, which fell at an annual rate of 1.6%. The unusually warm weather appears to have distorted the year’s activity and allowed more construction earlier. This phenomenon, when combined with a seasonal adjustment unable to compensate for it, is the most likely cause of the drop. As ever, we need to wait for a few months to determine whether there is a real downward shift taking place or whether this is simply an oddity of statistics.

So the week started off on a weaker note.

Then, however, things perked up somewhat.

The monthly report from ADP, the private payroll processor, gave better news for employment. According to ADP private payrolls rose 201,000 last month, up from 173,000 in July. This gave brief hope that today’s government employment report would beat expectations and would break the recent trend of utter mediocrity.

It didn’t.

If anything it merely confirmed what we all know: we are mired deeply in a terrible mess with no momentum at all.

This, of course, surprises no one. Well not us at least. In an economy struggling to shed debt, slowed by miserly pay increases – if any, burdened by ongoing retrenchment by state governments, and with a gridlocked and viciously partisan political environment, of course we aren’t going anywhere.

There are some who blame the uncertainty supposedly propagated by a supposedly anti-business Obama administration. That is preposterous. Businesses are not investing not because of red tape or excessive regulation. Nor because of the prospect of higher taxes. They are not investing because they see, correctly, that there is no demand. Without people buying stuff only the insane invest to make more of it.

Now, as you all know, I happen to think the lack of demand is the logical result of policy error combined with the long term corporate self-defeating obsession on shareholder value. These two tragic mistakes have created a perfect storm to swamp the middle class and put and end to most of what we all thought was endless: namely the steady march towards greater prosperity for the vast majority of Americans. Indeed those two mistakes have started a dangerous and potentially devastating reversal. By gutting the current and prospective purchasing power of that vast majority, and by redistributing our gain in wealth upwards to an ever more exclusive minority, those policies and corporate obsessions have undermined the very engine they hoped to build.

If you don’t pay your workers enough to buy the stuff you make eventually you sell less. The downward spiral is your doing. It is unreasonable, indeed it is stupid, to expect households to continue to consume by taking on more and more debt. At some point the reliance on ponzi finance topples the entire system into the abyss. This is eminently predictable. It is simple to understand. It is clearly our misfortune – or our own error – to have fallen for the snake oil embodied in those policies and obsessions.

Deregulation, the unbridled pursuit of shareholder value, and the consequent redistribution of wealth upwards starves the economy, eventually, of its lifeblood. Especially when those who benefit, the upper echelon of our society, have no allegiance to the society they are exploiting. When they can shovel their gains abroad they starve the economy of investment. When they skew the tax code in their own favor, they starve the government of revenues. When they cut costs to beef up profits they reduce the purchasing power of their own communities. When they shift jobs abroad to lower costs they increase profit but undermine their homeland. And when they start to feel the rot of their actions, they spend to influence the government that enables and encourages those actions.

Continuous and excessive deregulation coupled with a corporate culture dominated by the pursuit of profit at all costs is the basic cause of our malaise. And we cannot break out until we reverse course.

In that context the upcoming election could not present a more stark contrast.

The Republicans want to deepen and extend the trends that caused the problem. The Democrats want, at least in part, to undo them. The outcome remains in doubt because of economic news like today’s. The stupor and continuous tepid response are alarming. They allow extreme notions and ideas to fester. And they encourage a cynical disregard for balanced thought.

Given our political climate I doubt this election will resolve much. This will hearten the extremists and those who harbor utopian visions. The rest will suffer as the extremes batter each other with competing and utterly unreal solutions.

As for economics: it will continue its slide into irrelevance as it either offers up its own utopias or it recycles old ideas that no longer fit well with economic reality. The paucity of new, truly new, ideas will ensure it withers. Perhaps it deserves to. After all the doggie paddle economy is built on the sands of orthodox economics with its call for deregulation, more open markets, and its underpinning of the paraphernalia of modern finance. Utopias don’t exist anywhere, least of all in our real world. Too bad that’s all orthodox economics talks about.

Paddle away folks. It’s a long way to shore.