Harold Meyerson

In the short term, the recovery looks shaky. In the long term, the economy looks shaky — so shaky that it may be many years before a president of either party or any ideology can count on winning a second term.

Polls show that President Obama’s lead over Mitt Romney is narrowing, but should Obama lose in November the decisive factor won’t be Romney (who is as inept a presidential candidate as this country has produced in decades). The real culprit will be the economy.

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In February 2011, one month after he’d been sworn in as New York state’s attorney general, Eric Schneiderman sat down with the staff attorney who’d been delegated to track the negotiations that the 50 state attorneys general and the Obama administration were conducting with five of the country’s biggest banks. A few months earlier, the story had broken that the banks had been “robo-signing” thousands of notices foreclosing on homes. Instead of assessing how far behind in their payments the homeowners had fallen or seeking to modify the terms of their mortgages, the banks had employed junior staffers, some hired right off the street, to sign hundreds of foreclosure documents daily, though the banks’ title to many of the properties was uncertain. Even when the banks’ claims to ownership were clear, robo-signing violated numerous state laws requiring due diligence before a bank can foreclose on a home.

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So how do we re-create the American middle class?

Making our loopy tax code more equitable appears to be off the agenda, what with Senate Republicans’ refusal Monday to allow a vote on a tax hike for millionaires. And even if the “Buffett Rule” were enacted, it would do nothing to alter the rocketing inequality in Americans’ pre-tax income. With the Southern wage for manufacturing — roughly $14 an hour — becoming the national norm, and with hiring more prevalent for low-wage restaurant and retail jobs than for positions in higher-paid industries, the incomes of most Americans will continue to stagnate, if not decline.

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Why is this recovery different from all other recoveries?

Many of the reasons are widely known: Rebounding from a financial crisis takes an excruciatingly long time; the huge decline in housing values has reduced Americans’ purchasing power; large corporations are making do with fewer employees — at least, in this country.

But what really sets the current recovery apart from all its predecessors is this: Almost three years after economic growth resumed, the real value of Americans’ paychecks is stubbornly still shrinking. According to Friday’s Bloomberg Economics Brief, “the pace of income gains is well below that of the past two jobless recoveries and real average hourly earnings continue to decline.”

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With Rick Santorum’s withdrawal from the Republican presidential race Tuesday, Mitt Romney has now effectively won his party’s nod to go up against President Obama in November. But winning the Republican nomination in 2012 has required Romney to move well to the right of any GOP presidential nominee since Barry Goldwater. The Arizona senator, of course, relished what he acknowledged was the extremism of his positions. Romney, by contrast, has been compelled to become an extremist by the Republican primary electorate.

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In 2008, Wall Street backed Barack Obama. Hedge fund operators, private equity investors and mega-bank executives gave his campaign twice the amount they contributed to John McCain. Many of the financial masters of the universe saw in Obama a guy much like themselves — self-made, very bright, assertive and validated by all the right academic credentials.

Today, Alec MacGillis reports in the New Republic, Wall Street has turned against Obama with a vengeance. Hedge fund operators have given Mitt Romney four times what they’ve given Obama, MacGillis writes — and that doesn’t count their contributions to “super PACs” backing Romney and other Republican candidates. Just as notable are their assessments of Obama, which rival those of Glenn Beck at his most paranoid.

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