At the Next Tea Party, Will They Read the Tea Leaves?

Sometimes it's hard to wrap your head around this economics thing. All those numbers and statistics and theories - supply side this, yield curve that - and don't get me started on how to factor in present value - it's enough to put a major hurt on the average person's head.

So I suppose we should cut Fox commentator Sarah Palin some measure of slack for misrepresenting the workings of the United States tax system. Speaking at a Boston rally sponsored by the "Tea Party Express," Palin railed against the ultimate cost of the administration's various programs.

"There's no way to pay for any of this except to see your taxes rising and the states or the Fed will have to raise taxes, taking us further into debt," she said. For the record: When it comes to taxes, Ben Bernanke can't do "diddly" (to borrow the colorful description popularized recently by Mississippi Gov. Haley Barbour. It's possible that she meant to say "Feds," though given how the Fed and its chairman have assumed bugbear proportions in the conspiracy narrative popular with the tea party crowd, I doubt it.

It was only happenstance but Palin was trotting out her end-of-the-world scenario just as the Dow Jones was about to pierce the 11,100 mark - and this, just days after the index inched past 11K. Truth be told, the market rally appears long in the tooth, though I've been waiting for the pullback which never comes. Regardless, the stock market often - though not always - sniffs out economic recoveries and recessions months before the rest of the world catches on. Stock prices follow earnings and earnings are improving. Another encouraging harbinger: The latest beige book report of economic conditions showed a moderate pickup in economic activity. Separately, Bernanke told Congress on Wednesday that the nascent economic recovery has staying power.

The other question is the pace of job creation. Since December 2007, when the recession began, the economy has lost 8.4 million jobs - many of which never will return. Now that job growth is also picking up, how will that affect the national conversation on spending and government intervention?

Economics and politics don't always march in sync. Case in point: Palin and the various tea party factions continue to cling to the 2009 narrative and ignore the new data. Pounding away at the same theme may work if the economy again falters. Then again, what if the economy shakes off its hangover and returns to a finer fettle?

To be continued.