One thing that cracks me up about Drudge is his endless sunny optimism about the economy - so long as Republicans are in power, of course.

So today we get links to these stories:

GLOOM LIFTING? Employers cut fewer jobs in April, jobless rate falls…
Sense of Optimism Begins to Ease Onto Wall St…

Well that’s it then! I’m taking out a balloon mortgage today!

During a downturn there’s always going to be brief upswings as people see opportunity for profit. But the malaise on Main Street runs pretty deep. If you’re up to your eyeballs in credit card debt or worried that your health care costs are going to outpace your salary increase yet again next year - which is more or less guaranteed - then no, regardless of how much “optimism” they’re showing on Wall Street, you’re not about to run out and buy yet another iPod.

But there’s long been a disconnect between what those with the money say about the economy and how that economy affects those without that money. We’ve heard it for years, the Republican insistence that the economy has been strong, but there’s always been a gulf between those who can shrug off the higher cost of energy, the skyrocketing cost of health care and those who can’t. That gulf has been bridged in recent years because of the mortgage bubble; even as many people’s paychecks didn’t keep pace with inflation elsewhere, the rising, theoretical value of their homes made them winners in the bubble economy. And winners could afford to keep spending, because the good times would go on forever.

Things have changed.

And so this Drudgian Yay, optimism! business is particularly galling. The idea is to tell people that everything’s starting to come up roses, because if they believe that then they’ll act accordingly, and we’ll move more iPods, and all will be well. Except that we won’t have done anything to address the structural problems have contributed to the state of affairs:

But there is a deeper problem that has been overlooked: the US economy relies upon asset price inflation and rising indebtedness to fuel growth.

Therein lies a profound contradiction. On one hand, policy must fuel asset bubbles to keep the economy growing. On the other hand, such bubbles inevitably create financial crises when they eventually implode.

This is a contradiction with global implications. Many countries have relied for growth on US consumer spending and investments in outsourcing to supply those consumers. If America’s bubble economy is now tapped out, global growth will slow sharply. It is not clear that other countries have the will or capacity to develop alternative engines of growth.

The real estate bubble, at least, is over. Back in February, in Harper’s Magazine, Eric Janszen predicted there will be another one - because there has to be. We are in a bubble economy; having dispensed with our manufacturing base, bubbles (and the “wealth” they generate, leading people to spend) is all we’ve got left.

And if this is the case, whatever the causes of the momentary euphoria Drudge keeps promoting, there is no case whatsoever for long-term euphoria, or optimism. If the only way to keep American consumers spending is irrational exuberance over this sector, then that - then the broad-based prosperity of the past really is gone. Some will do extraordinarily well, as they have; others, a vast, swarming, growing crowd of very angry others, will not. That’s a very dangerous state of affairs to perpetuate. And I can’t shake the notion that perpetuating it is exactly the thing Drudge is trying to do.