Jeff Faux characteristically bearish on domestic economic forecast

Jeff Faux, the economist and journalist who founded the Economic Policy Institute, doesn't seem to write so much any more - although his last book "The Global Class War" was really excellent. His latest article for The Nation is one of the most depressing things I've read recently in terms of the stability and dynamics of the US economy. Lots of different factors are implicated in the mess here, including the fact that America is borrowing lots of money from China, the housing market will stay weak for awhile and the fact that Bush doesn't understand any economic policy, in Faux's words, other than "tax cuts."

Faux hedges by admitting that his doomsday scenario is at this point still unlikely, just not unthinkable. But with the macroeconomic conditions he runs through in his article, it doesn't seem to be an overly-bearish prediction that this could lead to the most severe economic downturn in thirty years.

The X-factor, it seems to me, is what happens to the job market, and how much unemployment results from the worlds largest financial firm retrenching and "cleaning up their balance sheet.