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