Everyone has an internal calendar, a place where they think we have been before. For many, the 1970's was the 1930's all over again, with the world order tottering on the edge of a deep and possibly violent abyss. In the present it is not liberals who see this moment as a moment of supreme pressure, but reactionaries. In the minds of the reactionary leadership this is the 1930's - justifying extraordinary, even quasi-dictatorial, powers.

There are of course those in the fringes of the right who are more than happy to give them these powers, but what is unsettling is how much the leadership buys into the hysteria. For it is indeed hysterical to compare 2006 to 1936 - the two years almost could not be more different.

Auden's celebrated poem September 1, 1939 looks at the roots of why a series of capitulations and blunders preserved a dishonest peace. However, may we state the obvious? There is no Hitler, there is no Tojo, there is no Stalin and the best that could be said is that Vladamir Putin occasionally does a poor Mussolini impersonation. Totalitarian sympathies are not sweeping the developed world, even if the willingness to toss liberties out the wind for some temporary security is distressingly common. Only the deluded believe that Saddam was anything like the threat posed by the most technologically advanced state in the heart of Europe.

And yet, on camera and in coffee shops - reactionaries bellow and assert with overweening arrogant certainty, that this is Saddam was Hitler, or near enough to Hitler not to matter. To even ask the question "What if we had invaded?" Pretending that history and Churchill are on their side. In fact, neither is the case.

Churchill didn't want to mount a military invasion - and he did not wish to do so speculatively. Indeed, towards the end of the 1930's he was proposing an encircling alliance against Germany, confident that Hitler would attack, and that there would be a moment when, if all of the nations bordering Germany were to immediately strike back, that Hitler could not have enough troops and equipment to withstand a counter-strike.

Importantly Churchill had a line for dealing with Hitler, he stated unequivocally that it was mass conscription which was the trigger point for intervention - because the Versailles sized army of 100,000 men was far too small for any purpose, however, well trained it might be. It would be conscription which was the visible sign, an unmistakable one, which separated Hitler the dark brooding annoyance, to Hitler, the ghastly threat.

None of this kind of sophistication and vision is evident in the Bush-Blair axis. Instead they invaded aggressively a state which was not close to being a threat to anyone. Infact, they invaded a state which, as dysfunctional as it was, that provided a buffer zone against Iran, which is the growing regional power, with a working economy, growing technical assurance and a functional, if unpopular, ideology which permits expansionistic and imperial dreams. Removing Iraq from the picture was very much like allowing the annexment of the Sudatenland portion Czechoslovakia - removing of the final barrier to Hitler's aggressive intentions.

This is combined with the hysteria over the stock market crash of 2000-2002 among the upper classes. They took a severe hit, and to them, Bush does look like a savior - the massive tax packages have bailed out corporate America and corporate profits, and the people whose wealth depends on them. The fear that losing the huge padding of wealth would make them vulnerable to a government that could bail them out is not empty, one of the key pressure points that FDR had in pushing forward with the New Deal, is that the wealthy of that moment were broke - and had to accept bailouts on whatever terms they could get.

But the economy itself did not collapse - the very mechanisms set up by 70 years of liberal government did their work, despite obvious incompetence and corruption in the way the Republicans managed them - to buffer the shocks.

Far far from being Roosevelt and Churchill has they like to paint themselves, Bush and Blair were, and are, instead far more like late 19th century Imperial powers - filling in the blank spots on the imperial map, and in their case, not doing a very good job of it. Because the world isn't in 1936, waiting to have an entirely new kind of warfare and new kind of economy unleashed upon it in the form of mechanized warfare and a mechanized economy - but, instead, a world which is trying to find ways of squeezing more out of an economic system and energy system which have crested in the amount of raw prosperity they can provide.

We are then, somewhere in the late 19th century, where we have reached the peak of affluence, and at the same time there is a crawling feeling of decadence and doom in the air, a palpable terror that others may come to place claims on a limited stream of key resources. Iraq was invaded not because it resembled a fascist state - but because it was a corrupt petty monarchy with more oil than guns. The various crimes that Saddam is charged with - slaughtering ethnic subjects for fear of their revolting, extra-judicial executions, torture and oppression - would have been familiar to many placed under the British or French colonial fist. One doesn't need to go to Dachau to find clear and unmistakable signs of repressive imperialism - they are all too common in history.

Iraq is, in fact, closer to being a danger today than it was before the invasion. Saddam was a weak king, but now the Iraqi state is in chaos, and it is overt chaos, the break down of all ordinary rules of behavior, which creates the fertile field for the rise of a despot. It was how Saddam rose in his time, it is how Hitler rose in his - law and order have disintegrated, people turn to someone who will deliver this before all else.

This is why there is, simultaneously, an attempt to soften the Republican party electorally - as hard edged corrupt pols like Delay, Murkowski and Rowland are replaced by women - and even George Bush is reading some Camus - and a growing paranoia campaign over Iran. On one hand the Republican electoral machine knows that hard is out among the middle of the voters, and so they need to run as stealth Democrats - Palin in Alaska is promising to Spend! Spend! Spend! - while at the same time holding on to their core which needs the next apocalyptic danger.

Because however long they stare at it, this 1936 is not turning into 1937 - they have not cut off the rise of Hitler or a new Great Depression, but merely bankrupted the United States and created the conditions where a massive fiscal crisis are in the offing. This decade has been far more like the 1920's than the 1930's - following after a chaotic and politically polarized decade that included a major third party run, and a President who was at once aggressively progressive and hopelessly hidebound, with one who combines the worst features of Harding and Coolidge.

There are many democratic writers I speak to who fear exactly this - that 2008 is 1928 all over again, and that a winning Democratic Presidential nominee, particularly if it is Hillary, will be blamed for the unraveling of forces that he or she did not create and could not control. But it is always better to be in charge, if you are up to it. Those that sit on the sidelines being critics must eat whatever government the Republicans feed them.

I have my own clock, and it is this: soon the baby boom is retiring. To handle this massive wave of incoming obligations, the United States is going to have to expand immigration, improve productivity, and put more people to work at higher wages than ever before. The generation where workers have not seen a penny of the improvements in productivity means that the payroll tax funding system of entitlements is in trouble.

If wages had gone up with productivity, then neither Social Security nor Medicare would be in any trouble - but wages did not go up, and that means that a dramatic overhaul of our Medicare is now going to be required - though Social Security can be protected by the far less dramatic means of increasing our savings rate and allowing wages to rise again. We have put it off for a generation, and that generation has given itself a great deal of paper wealth by robbing pension systems and health care benefits.

This clock is running out quickly, and there are two, and only two, options.

One is a nastier, poorer, sicker America. One that will fall behind rapidly, as people from around the world choose not to come here, and the people who are here will find that their human infrastructure is being passed by other nations. It will be a nation that will lose its best and its brightest, as they head to Australia or China or India for better chances, or Europe for a more comfortable and stable existence. Slashing benefits will mean drops in aggregate demand and economies of scale. It will mean other nations will no longer gear their production for our markets, and prices will rise. It will mean more people living less well. This will go on until the echo boom reaches its earning years, and there will be a chance for a neo-classically driven export revival of the American economy, but the miracle of compound interest in reverse will mean that it will live, as the Clinton years did, in the shadow of an electorate that will be desperate to cash out, rather than fix the problems.

The other road is a progressive America, one that shifts from petroleum addiction to energy creation, one that shifts from a society questing for rent, to one questing for capital, one that understands that to stay ahead, one must plan ahead. The crucial problem is this: consumer demand becomes demand for energy in the end, and that becomes demand for oil, which we import. Wages did not rise, because that was the only way that was found to increase GDP without increasing oil consumption. To give workers back their wages, we need to find a way to export, not import, from the rest of the world. Crucial in this is setting up a universal, single payer, health system, because health care is largely a non-tradeable, and creating profit incentives in non-tradeables is counter-productive and unproductive. The world must be our market place, and the era of cutthroat class civil war must come to an end.

Thus, however romantic the sensibility of being in the dusty dusk dark days before a great global conflict - the reality is that we are not there, but in another time, and another era, one that, however much it may look back on FDR and Churchill as founding fathers, must find its own path into a different darkness which was unknown to the past, and in which lies the future.