Daylight

All of a sudden, it's rough going for a Chief Frustration Officer.  Things haven't looked this good in ages.

The coming-out party for No Labels got some brutal spitballing on twitter (and dismissals running 3:2 against excitement on WaPo).  But there's a serious group behind it; despite Bloomberg's visible participation, it's too decentralized to function as a star vehicle for a single candidate.  They're organized, staffed, and focused as much on the soft goal of civil discourse as on the hard concrete of political action.

This is real-world confirmation of the fake-news blowout that Stewart and Colbert staged on the Mall Halloween weekend.  Give them time.

There is also evidence that said civil discourse may yet produce beneficial political action.  Already, the tone is changing.  We are likely to have stability in the tax code for two years, reflecting the short-term stimulus that is desirable to shore up the recovery.  And while the most extreme candidates failed at the polls, and earmarks are enjoying a predictable last gasp, the best impulse of the Tea Party -- to rein in long-term obligations -- is joining with the deficit commissions to create new pressure to adjust entitlements.

The ugly process of adjusting political reality to financial reality has begun, but it will take time.  Let's give it all it needs.

Meanwhile, the President is reaching out to American business for the first time.  Within the beltway, a redux of the 1986 tax reforms is even plausible, for the first time since...1986.  As with entitlements, to which its fate is bound, let's give tax overhaul time.

Critically, the economy is now a support, not a distraction, to political efforts.  Inflation is muted, industrial production is picking up, and the consumer -- shell-shocked for the past two years into pure deleveraging mode -- has more recently struck a striking posture between reasonable saving and growth-sustaining spending.  In a macro sense, this is a far more balanced -- and thus better and more sustainable -- a recovery than we had reason to expect.

That is the daylight.  Here is the darkness.

Economic security is ebbing back unevenly.  The coasts are better off than the middle, as are the college-educated.  In the U.S. as (even more so) in the U.K., overdue state retrenchment means public sector employees are losing out -- and they're finding it hard to adapt to the private sector.  Along with the building trades, this entire column of our society has been essentially excluded from the workforce.

A narrow band of workers now bears the brunt of the economic risks that remain.  How we address their condition, a question thoughtfully posed by our friend from San Diego, will say a great deal about where a politically realigned nation addresses questions not only of fundamental equity but of market economics, secondary education, and global competitive posture.  Watch this space.

Finally: with housing still bottoming, even those with in-demand skills find it difficult to pick up and move to where the puck will be.  And so we find that the first of our economic constraints remains the last to erode.

Hey, there's a reason why renting is the new flipping.  And why multifamily is the first of the commercial real estate sectors to recover.  But that's a blog of a different color.