You could probably talk to 100 people and get 100 different interpretations of the stock market volatility we’re seeing in real time. The market opened up 1% and then immediately fell to about even. The stock market is not the economy and really shouldn’t be seen as a barometer for the economy.

The amusing, though confounding, by-product here is that even zero growth would have the effect of increasing the deficit in the near-term, perhaps enough so that the debt limit deal does not actually get the country through the 2012 elections, forcing a need to increase in… September 2012? October?

I won’t discount the probability that Republicans are working hard to sink the economy. But this is bigger than that. All signs point to a weak economy globally for the foreseeable future. Austerity in the midst of this fragility is just damn stupid.

The market may be pricing in the fact that Treasury has more cash on hand than it claims, enough to hold things together past August 2nd, past the Social Security payments on August 3rd and even past the large debt rollover on August 4th.

There’s a great deal of credibility tied up in the imprecise rendering of August 2nd as the drop-dead date. If the Administration actually has the cash to go a bit further, it will confirm the basest suspicions of the conservatives.

That’s why OMB Director Jack Lew was out there today denying that Treasury had the additional headroom.

It was John Boehner who invoked the spectre of the “Asian markets” by saying that he would deliver a framework deal on how to increase the debt limit by Sunday night. Once you do that, there’s nowhere else to go. If no announcement is made, the Asian markets will most certainly react negatively. If the announcement is seen as unworkable or inadequate, they’ll drop too. This creates rather than arrests a crisis.

At a recent meeting with House Democrats, President Obama shot down the members’ hopes that he might step up his rhetoric against the Republicans. He’s concerned how the markets would react.

This was the first televised address by Emperor Akihito ever.

So, while the situation doesn’t appear quite as dire as when Prime Minister Kan appeared on television, the mood of the country reflects, to put it mildly, total panic.

So basically, you have the Treasury Secretary of the United States, three years after a major financial crisis, saying out loud that what’s good for Wall Street is good for America.

In other words, welcome your vampire squid overlords.

We’re headed into the deficit debate, and one attractive idea has been left on the sidelines – the notion of a financial transactions tax. Most of our stock transactions these days come out of a computer. They offer nothing of value to the public, enhance risk and feed a desire for more dangerous bets that could (and often do) cause financial crashes. As a society, even if we had no need for more revenue, we would do well to limit this growing financialization in the economy, and that goes hand-in-hand with limiting stock transactions. And one great way to use market forces to reach that goal is through a small tax on each transaction.