Both Paul Krugman in today's New York Times and Clive Crook in this morning's Financial Times note the eerie silence coming out of the presidential campaigns on the current American economic crisis.

Krugman makes a compelling case that a President McCain would exacerbate the growing problems on Wall Street, surrounded as he is by economic snake-oil salesmen.

But, Crook really gives it to the Democratic candidates who continue to campaign on trade, when Americans are being hit not by NAFTA, but by an unregulated financial sector.

The separation of presidential politics from the troubles assailing the US economy is now verging on the surreal. With banks collapsing, the dollar reeling, the Federal Reserve making up new rules as it goes and observers discussing a new Great Depression, the presidential candidates are still on scripts they wrote a year ago. The main problem is either the North American Free Trade Agreement (Barack Obama and Hillary Clinton) or high taxes and excessive regulation (John McCain). If delivery from this ordeal depended on any of the contenders saying something intelligent about it, prudence would require that the entire country be written down to a nominal sum.

What makes this even odder is that the Democrats, at least, continue to hammer away at economic anxiety. The squeeze on "middle-class families" gives them an edge against the Republicans in November, they calculate. But they were saying this last year, and the year before - when unemployment was not rising, the economy looked pretty healthy and most Americans still did not know the difference between an SIV and a CDO. The themes are trade and jobs, shuttered factories, stagnant incomes, unlevel playing fields and labour and environmental standards. As for the complete breakdown of the credit system and the danger of a years-long Japanese-style slump - oh, yes, there's that as well.

Part of this is surely due to the fact that noone's got anything intelligent to say on the matter, Democrat or Republican. After all, with an interest rate just above 2% and the Fed bailing out unregulated investment banks, clearly nobody has a good idea about what's going on or what to do about it.

It also speaks volumes to the stranglehold finance has on American politics. No presidential candidate can call for the type of banking regulation that seems necessary in the current financial climate (and, I might add, seemed obviously necessary to many of us in the lead up the crisis).  

One need only look to the right of Clive Crook's column today to find a ready rejoinder to the argument for updating banking regulation. And one cannot blame Ms. Robinson of that eminent publication, The Banker for defending the rights of her patrons to unregulated financial industry, backed by the safety net of taxpayer bail outs. But for the rest of us, the case is clear.

No presidential campaign will touch the current economic crisis. It's toxic, and there are no obvious solutions. But that silence speaks more about the root of our economic distress than anything else.

The collapse of investment banking giant Bear Stearns sent shockwaves through the financial sector over the weekend, and resulted in the Fed expanding it's safety net to cover investment firms like Bear Stearns. It also hit really close to home for one Virginian, Republican Jim Gilmore, who "was chairman of a Bear Stearns subsidiary that was set up to market some of its highest-risk securities."

The Fed's response to the Bear collapse was completely unprecedented, and is the result of years of utterly irresponsible financial practices that have resulted in Alan Greenspan predicting, "The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war."

But Gilmore's foray into irresponsible investments isn't his only financial experience. He's also widely regarded as a "naive" money-manager who poorly handled state finances when he was Governor of Virginia.

Gilmore demonstrated some of that famous financial ineptitude when asked about his role with Bear Stearns:

Gilmore said Tuesday there was no way to predict the subprime home loan industry crisis and its effect on financial markets when he joined Everquest's board in November 2006.

Yeah, who could predict that handing out high-interest balloon loans for more than the value of a house to people reporting no income, no job, and no assets was a bad idea?

Now Jim Gilmore wants to be in the U.S. Senate? Ridiculous.

By all accounts, the US is in serious financial trouble and correcting years of Republican crony capitalism requires leadership that understands how to run an economy, not flim-flam men who are most experienced at selling financial snake oil. Especially when the flim-flam man is too dense to realize that the snake oil doesn't work.

When I was at university, a professor described the difference in American economic attitudes today and fifty years ago. His claim was that in the 1950s, the "great American dream" consisted of owning a home, a car, and raising a family. Today, in contrast, Americans are successful when they carry six-digit debts and own nothing.

You borrow hundreds of thousands of dollars to buy a home, which you never really own (the bank owns it); you borrow twenty-thousand dollars to buy a car, which you probably sell the moment you've paid off the debt. And you carry probably two or three credit cards with revolving debt. In fact, modern Americans would be be hard pressed to have a home, car, or university education without expansive debt.

Clive Crook writes in today's Financial Times that this culture of cheap debt expectations is the root of the looming economic crisis:

Economic indicators point to an American economy worse than the Whitehouse is admitting.

"This quarter will be our weakest quarter," [Edward Lazear, chairman of the White House Council of Economic Advisers] said. "There are indicators suggesting that growth will pick up and pick up quickly. So the question is how quickly will it pick up."

He highlighted what he said was the good news in Friday's jobs report: that the unemployment rate dipped, wages grew and weekly hours stayed the same. However, the jobless rate fell to 4.8 percent in February from 4.9 percent because so many people left the labor force, perhaps discouraged by the difficulty of finding work. And average hourly earnings for jobholders rose only an anemic 0.3 percent from the previous month.

"Obviously we were disappointed," Lazear said about the job losses.

Bush focused even more on optimism than his adviser. "Our economy will prosper," the president said.

But we're seeing more than "disappointing" job numbers.

In this morning's Financial Times, columnist Philip Stephens looks at how John McCain would handle the 3am call:

To his mind, the only thing wrong with Mr Bush's surge in American forces in Iraq last year was that it did not go far enough. As for Iran's nuclear ambitions, the candidate's refrain could scarcely be clearer: the one outcome more dangerous than war would be a nuclear-armed Iran.

There are some fairly obvious snags here. Even if Iraq has drifted off the front pages, the polls show that the war remains deeply unpopular. As the Obama campaign never fails to point out, the so-called "success" of the surge is strictly relative. Certainly, fewer Americans are being killed than in 2006, but the casualty rate is little changed relative to 2005.

Nor is Iraq closer to a political settlement. The US has secured the present relative calm by arming the Sunni militias it had spent three years fighting in the aftermath of the invasion. If the Sunnis have now turned against their erstwhile al-Qaeda allies, their accommodation with the Americans represents an uneasy truce rather than anything resembling a peace. There is precious little sign either of a Sunni reconciliation with the Shia-led government of Nouri Maliki.

Mr McCain says he would stay in Iraq for 100 years if that is what it takes. I wonder for how long most Americans are willing to go on losing a US soldier every day. The opinion polls may show that many believe the surge has worked; most, though, still want the troops brought home sooner rather than later.

There are flaws too in Mr McCain's assessment of the wider challenge to America's security. His, like that of Mr Bush, is a Manichean view of the world in which everything is swept up into one all-embracing threat. Iraq, Afghanistan, al-Qaeda, Iran, Hamas and Hizbollah are all on the other side of a single struggle between liberty and Islamist extremism. In this, Mr McCain is making the same mistake as Mr Bush by giving a cohesion to America's enemies that otherwise would not exist and thus inviting them to make common cause.

This, again, points to something I wrote yesterday - either Clinton or Obama would be significantly better than a McCain Whitehouse.

I've written about the Roberts court's sympathy for big business, as evidenced by recent examples of the decisions that make it much harder for private individuals to take corporations to court.

Yesterday, Doug Kendall reported in Slate that it's not just that cases are going the way of corporate interests, the course of legal thought is changing as well.

It's not just particular cases that the chamber is winning, but also foundational issues that set the course of the law. Stoneridge is what lawyers call a "cause of action" case; it was about whether the plaintiffs could get into the courthouse to ensure the enforcement of the obligations that the federal Securities Exchange Act of 1934 imposes on corporations. Decades ago, the court ruled that the Exchange Act necessarily implied that victims of corporate misconduct could sue corporations for flouting the clear legal obligations that this law imposes. But starting in 1975, the court began a steady retreat from the idea that judges could "imply" a cause of action, forcing Congress to state clearly that it wants people to be able to sue. In Stoneridge, the court took this a big step further, saying in effect that people cannot sue companies to enforce an obligation under the Exchange Act that the court has not approved in a prior case. This ruling essentially freezes the enforceability of the Exchange Act.

Last night was a big night for Clinton. She won the Texas primary by a hair (51% to 48%), with Obama taking the major metropolitan areas of Austin, Houston, and Dallas. The dust hasn't quite settled, though, as caucus results continue to roll in. With 36% of caucus results reported, Obama is up slightly, with 52%. Of course, it's far too early to tell what the end result of the Texas caucus will be, and I would advise caution in predictions, especially with Clinton's hardball strategy to seize control of the caucus operations.

Ohio was less dramatic, as Clinton was expected to take the state fairly handily, which she did with 54% of the vote. Tellingly, Obama again won the major metropolitan areas of Cincinnati, Columbus, and Cleveland

Republican legislators seem to display a lack of consistency in their economic philosophy as they show outrage over the EADS contract to supply tankers for the U.S. Air Force.

Sen. Brownback (R-Kansas) has been a vocal proponent of NAFTA, CAFTA, the U.S.-Australian Trade Act, and free trade agreements with Oman, Chile, and Singapore. The pro-free trade Club For Growth awarded Brownback a score of 98/100 on their annual scorecard, earning him a "Defender of Economic Freedom award" from the organization.

Yet, Brownback now expresses shock and awe that the U.S. would "outsource the production" of something that could be manufactured in the U.S.

"It's stunning to me that we would outsource the production of these airplanes to Europe instead of building them in America," said Sam Brownback, the Republican senator for Kansas, where Boeing has a site. "I'll be calling upon the secretary of defence for a full debriefing."

But free trade isn't the only area of economics on which conservatives are suddenly (and conveniently) turning an about face.