Long-term Treasury rates, the bellwether for everything — recovery, inflation, recession, fear, joy — have stopped rising in the last two weeks, and even improved a bit and helped mortgages.

Interpreting markets is hard these days. The deafening financial-market chant — "recovery, inflation, recovery, commodities, recovery, sustained recovery" — makes it hard to concentrate. Maybe we could set the whole thing to music and hire the Super Bowl babe to sing the wrong words.

Many think that Middle East unrest has held rates down, but thus far it’s small-potatoes unrest. A more likely cause: Inbound data do not support acceleration of the U.S. economy. Retail sales numbers came in at half of forecast, industrial production is flat, and mortgage applications have fallen to near-record lows.

Global food and commodity prices are rising, igniting inflation fear among those who have worried about inflation ever since it broke in 1981, never to return. These price rises are cost increases that are likely to slow the U.S. economy, as there is no wage growth with which to pay them, or to pull into broad-gauge inflation.

Long-term Treasury rates, the bellwether for everything — recovery, inflation, recession, fear, joy — have stopped rising in the last two weeks, and even improved a bit and helped mortgages.

Interpreting markets is hard these days. The deafening financial-market chant — "recovery, inflation, recovery, commodities, recovery, sustained recovery" — makes it hard to concentrate. Maybe we could set the whole thing to music and hire the Super Bowl babe to sing the wrong words.

Many think that Middle East unrest has held rates down, but thus far it’s small-potatoes unrest. A more likely cause: Inbound data do not support acceleration of the U.S. economy. Retail sales numbers came in at half of forecast, industrial production is flat, and mortgage applications have fallen to near-record lows.

Global food and commodity prices are rising, igniting inflation fear among those who have worried about inflation ever since it broke in 1981, never to return. These price rises are cost increases that are likely to slow the U.S. economy, as there is no wage growth with which to pay them, or to pull into broad-gauge inflation.

Public policy is the deal, now — not markets, and not even the economy. In gathering force, ordinary civilians have decided: Given a flat-broke Treasury, and a choice to borrow, to raise taxes or to cut spending, we’re going to cut spending. Oh, we’ll have higher taxes, but by three or four to one, spending cuts will dominate.

Crystallizing public will is most evident in the states.

President Obama looked in December as though he understood, but was a no-show at his own State of the Union, and the most charitable thing said about his new budget this week was the Washington Post’s "Punt." The budget reflects the Mind-in-Chief: empty of urgency, and despite all the centrist noise, a desperate-Left determination to maintain social spending that we cannot afford.

Congress moves without the president only when the people lead, and it is moving now. A bipartisan "Gang of Six" in the Senate is working to codify the Simpson-Bowles commission findings.

Tough, fair and popular Republican Jim Christie, spending-cutting governor of New Jersey, visited Washington to lecture Congress: "If people who I campaigned for don’t stand up and do the right thing, the next time they will see me in their district is with my arm around the shoulder of their primary opponent."

If the president made that threat, no one would care. When the people are moving, either catch up or face irrelevance.

Here in Colorado, new Democratic Gov. John Hickenlooper (prior effective and popular mayor of Denver) delivered his budget, which closes the next in a series of immense fiscal gaps entirely by spending cuts. A half-billion bucks, two-thirds falling on education (state budgets are education and Medicare — take your pick). Support for increased taxes was too weak even to conduct a debate.

Protesting Wisconsin public employees, widely unionized, jammed the statehouse after new Republican Gov. Scott Walker proposed to close its deficit by cutting the cost of state employees instead of laying them off (they will contribute more for their benefits). Forty percent of teachers reportedly called in sick. Obama decried an "assault on unions" — of all things to say, the most helpful possible to the governor.

Public employees are free of private-sector job instability, yet the bulk of U.S. union membership is now public. Many studies find public-sector workers better paid than the poor sods who cough up the taxes to pay them. Those people, America’s ordinary best, have decided. If we don’t have enough income to pay our bills, we’re not going to borrow, or pretend, or make Dad pick up the tab; we’re going to stop spending.

If, two years ago, a fine author wrote a novel in which a formless-fruitcake right-wing uprising lucked into public fears of national bankruptcy, and forced the Republican Party closer to the American center than Barack Obama, no publisher would have accepted a plot so outrageous. Change, and hope, indeed.

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