Obama has become the beleaguered messiah

On any rational assessment the popular new president is skating on thin ice. Pollyanna bulletins about the economy puff up from the White House and Federal Reserve, like auguries of a new Pope through the Vatican chimney. 'Habemus spem.' We have hope. We've just heard it from President Obama:

"We are starting to see glimmers of hope across the economy." From Fed Chairman Ben Bernanke, who's so far unleashed $12 trillion in booster money, we get the always sinister reassurance, like Death giving the Appointee in Samarra a friendly tap on the shoulder, "the foundations of our economy are strong".

The economic news in the near and medium term is ghastly. Retail sales crashed again in March, nowhere worse than in the car market, though electronics and building materials were way off too. They now reckon there'll be just over 2m housing foreclosures in 2009, up 400,000 from 2008. Industrial output is going through the floor at an annual rate of 20 per cent, the biggest quarterly drop since the end of the Second World War. US industry is now running at only 70 per cent of capacity, the worst number since they started tracking this stat in 1967. Job losses are currently  running at 650,000 a month.

Wall Street is trying to pretend that the worst is over - no-one believes itRound the next corner is credit card delinquency and  the long-heralded slump in commercial real estate, where vacancy rates are already running at 15 per cent. Capital One, a huge issuer of Visa and Mastercard, just  said the annualised net charge-off rate for US credit cards - debts the company reckons will never be paid - rose to 9.33 percent in March from 8.06 percent in February. In other words, Capital One – whose credit card promotions take up  hefty space in the mailbag of every US postman – is in big trouble, and  under one in 10 of these credit card holders will have a messed up credit rating for several years to come.

Wall Street and its boosters are trying to pretend that indeed the worst is over. The Dow and S&P Index have been rallying for five weeks. Wells Fargo, the huge San Francisco-based bank, second biggest home lender, announced that first quarter net income rose 50 per cent to $3 billion.

No one seriously believes the bank is in anything other continuing huge trouble, and will soon need – so Bloomberg News surmises - $50 billion to settle near-term commitments. The profit figure stems from newly relaxed rules about the valuation of Wells Fargo's assets.

In other words it's thin economic ice from here to the horizon. Robert Reich, now teaching economics at Berkeley and formerly labour secretary in the Clinton administration, wrote a piece recently, titled 'Why We're Not at the Beginning of the End, and Probably Not Even At the End of the Beginning'. There are huge problems with the whole orientation of the US economy. The "free market"outsourcing model has failed. Even at the best of times the US consumers who account for over 70 per cent of all economic activity in the country, don't have purchasing power to keep the whole show on the road, unless they put it  on the credit cards which are now maxed out and going into default, or borrow on houses they can't afford.

Drone strikes in Pakistan kill civilians - strengthening the hand of the TalibanAmid a hail of well founded criticism from liberal and conservative economists alike, Obama, with Geithner, Summers and Bernanke at his elbow, remains absolutely committed to giving the bankers everything they ask for, trillion upon trillion.  As William Black, deputy director at the former Federal Savings and Loan Insurance Corp. during the thrift crisis of the 1980s, recently remarked in an acrid interview in Barron's: "Unless the current administration changes course pretty drastically, the scandal will destroy Obama's administration, both economically and in terms of integrity. We have failed bankers giving advice to failed regulators on how to deal with failed assets. How can it result in anything but failure?"

In foreign policy the ice is just as treacherous. As the nation emerges from its disastrous adventure in Iraq, Obama redeploys to the Afghan-Pakistan theater. The administration delightedly touts claims that its remote-controlled missiles are decimating al-Qaeda. The Washington-based journalist Gareth Porter last week cited data leaked by the Pakistani government showing that only ten out of 60 drone attack in February and March hit al-Qaeda leaders and the rest did what bombs and missiles usually do, namely kill civilians, 537 of them – thus immeasurably strengthening the hand of the Taliban  in the battle for hearts and minds.

Obama is no doubt unworried by this since the hearts and minds he's mostly interested in belong to the American people and opinion-forming elites, who remain unflustered when high explosive falls on a wedding party in Waziristan.

Failure in Iraq was re-labelled "victory" and in terms of domestic politics the chickens only come home to roost when there's film of people climbing off the roof of the US embassy into a helicopter, or when the casualty rates among US soldiers start soaring. Soaring Pentagon budgets are popular with Congress, whose members nix any effort to cut back.

Where the ice is giving way for Obama is among those who thought he might strike out in a new direction in foreign policy. There's not much sign of that. Whether it's a sell-out of Haiti's poor or acquiescence in Israel's grim plans for the Palestinians, Obama's game is strictly business as usual, up to and including the Cuban blockade whose damage, as Fidel Castro said last week, "cannot be calculated only on the basis of its economic effects, for it constantly takes human lives and brings painful suffering to our people. Numerous diagnostic equipment and crucial medicines - made in  Europe, Japan or any other country -are not available to our patients  if they carry U.S. components or software."

Obama has welshed on promises that America will stop kidnapping its enemies and "rendering" them to secret prisons overseas. As under Bush, enemy combatants languish without rights or recourse in prisons like Bagram. The torturers who flourished in the Bush years will not be prosecuted. Electronic eavesdropping continues unabated.

Will the liberal-left mutiny? Never. Remember, Bill Clinton bombed Yugoslavia and kicked away life supports of America's poorest and most of the liberal-left stayed loyal to the end and cherish his memory. The labour movement has already seen defeat for its cherished "card check" bill, designed to win a level playing field for union organizers. They're not really blaming this on Obama, even though it is his chief aide, Rahm Emmanuel, who in his years on the Hill, picked Democratic candidates who feel no loyalty to labour and though Obama recently stressed he is a "new" Democrat – transparent code for someone distancing himself from the labour movement.

The Republicans are in appalling shape, lumbering from one stunt to the next

Obama's polling numbers remaining good. He has only to say there are "glimmers of hope" and the pollsters duly find increasing sentiment among Americans that they feel the economy is moving in a "positive" direction.

He gets good assessments from Democrats and Independents. Many Republicans don't like him but here again Obama is lucky, just as he was lucky – at least in the near term -  to have three Navy SEALS off the horn of Africa who were good shots. The Republican opposition is in appalling shape, lumbering from one ill-considered stunt to the next.

Obama's lucky to have succeeded a terrible president. He gets out a lot and talks a great game. His problem is the same as the country's. The economic ice is cracking all the time under his feet, and the "stimulus" is going to be about as efficacious as those cushions under the seats the flight attendants assure us are going to come in handy when the plane goes down in the North Atlantic. ·