By Marie Cocco - July 22, 2008

WASHINGTON -- When the next president takes office six months from now, it will be both too late and too early to do anything very substantial about the economy.

Too late, because the mortgage, banking and energy crises have been so long in the making and their tentacles reach in so many directions that their stranglehold on Americans' well being may have only begun to be felt. The first real chance for the new president to make a seismic shift in economic direction isn't apt to be in 2009. It's more likely to be in 2010.

That is when the Bush tax cuts -- essentially, the only economic policy the current president has deliberately put in place during his two terms in office -- are set to expire. And that is when future President John McCain or future President Barack Obama must decide if he is going to be a caretaker of conventional wisdom or a creative leader who at last breaks the psychology of using tax policy as a substitute for a broader, bolder economic plan.

Using taxes as the centerpiece of -- or as a substitute for -- a more comprehensive economic policy is the idea that has dominated Washington since the rise of Reaganism nearly three decades ago. McCain at first seemed to have shaken it off when he initially opposed the Bush cuts as too costly and misguided. But then he reverted to me-too-ism in order to please conservative Republicans whose support he needed to grasp his party's nomination.

Obama has shown a milder orthodoxy, but it is orthodox nonetheless. Like Bill Clinton did, he would use the tax code to encourage endeavors he finds worthy, whether it's getting more low- and middle-income people who do not itemize their taxes to be able to deduct their mortgage interest or helping students attend college. He embraces tax cuts for everyone he considers to be middle class, but generally defines the middle as those who make up to $250,000.

Yet if the past 30 years or so have taught us anything, it should be that the global forces shaping the U.S. economy are more powerful than a mere tax cut -- or tax hike -- and they persist no matter what party is in power and who is president. Jimmy Carter confronted an economic situation that was strikingly similar, in some respects, to the one we face today. When Clinton took office, the overhang of deficits and debt created during the 1980s had to be addressed before the investment climate that produced the boom of the late 1990s could take shape.

But despite the relative prosperity of the Clinton era, tectonic economic forces continued to be at work. The litany is familiar: Rising health insurance costs increased the burden on businesses, which then cut coverage or shifted costs to workers. Millions of pensions were eliminated. Wage pressure in part from the globalization of the labor force caused Americans' wages to stagnate, especially for those in the middle and lower rungs of the economy. In 2006, the last year for which data is available, the Census Bureau says real median wages for those who work full-time, year-round dropped by slightly more than 1 percent -- the third consecutive year of decline. Since 2000, income stagnation has been the most significant economic event for average Americans -- though the unglamorous topic rarely makes the evening news.

Having mostly missed this larger story, the media now seem stunned by the wave of foreclosures, the intensity of the ire over high gas prices and the pervasive gloom that is afoot.

Coverage of the candidates' economic messages has dwelled on their tax proposals, their energy plans and the relative merits of how either one would bail the country out of the banking mess. But even if every McCain or Obama proposal were enacted immediately, nothing much will have changed because our political system seems incapable of stating the obvious: That the serious erosions of wages, health insurance and pension coverage are themselves a crisis. They require more than the bromides of campaign promises to keep cutting taxes -- or to soak the rich.

The United States needs nothing less than a new social compact that recognizes what most workers already know: That employers no longer are a reliable source for health insurance or pensions; that workers lack the bargaining power once provided by stronger unions and nothing has replaced it.

These arguments would make for a transformative campaign. Without them, we are consigned to muddle through until the next full-blown crisis demands a president's attention.