ALEXANDRIA , Egypt -- Walking down the streets of Alexandria, Egyptians often ask me where I'm from. "Min ayn?" they say. When I answer that I'm from America, they invariably respond with "Obama, good." They laugh and give me a thumbs up.

From university students to politicians, taxi drivers to educated professionals, President Barak Obama, unlike former President George W. Bush, is universally liked in the largest Arab nation. But under that popularity is a wary wait-and-see attitude mixed with deep pessimism about the future. Overheard conversations on the tram, reporting in the newspapers and TV, proto-protests by labor and professional unions, tell the same story: There is no work, there is no money, health care and education are deteriorating, life is getting more expensive, the government does little.

The students I see at Alexandria University are not unlike my students at Chatham University. Most of them don't read newspapers. They get their news from TV or the Internet. Even then, they admit to not being very interested and to only occasionally tuning in to what is going on. They are interested in their own lives, in their prospects for the future. And in this they express an almost universal dismay. They have no future, and there is little they can do about it.

"We are blocked everywhere we turn."

"We want to have careers, but there is no work. We want to get married but there are no affordable apartments."

"We want to go abroad, but we can't get visas, and there is no money, anyway. So we will graduate and sit at home and wait."

Egyptians are dismissive of their government. It is corrupt and ineffective from top to bottom. The taxi in which I'm riding conspicuously ignores the directives of the traffic policeman on the corner. When I ask about traffic laws, the driver tells me there is a new law with serious penalties. But, he adds, "the law is in the drawer. Give him 10 pounds ($2) and the policeman will forget." Everybody seems to accept that the ailing, 80-year old president, Husni Mubarak, will be succeeded by his son, Gamal. No one expects that this will bring any real change.

There is opposition to the government. Spokesmen for the Islamist Muslim Brothers, the most organized and longest-established opposition force, regularly chastise the government in parliament and the press. So do smaller, more secular parties. There is an active blogosphere. There are labor strikes. The professional syndicates -- doctors, lawyers, journalists, university professors -- call for demonstrations about salaries and working conditions.

But, at least to my ear, there are no drums of rebellion, no organized underground. The government and its critics are engaged in a carefully choreographed routine that changes nothing.

In part this reflects the omnipresence of the security forces. But in part it reflects the fact that Egyptians are a pragmatic people wary of political upheaval. On what was billed as the "day of anger" to protest rising prices and political stagnation, the primary demand voiced by the Muslim Brotherhood spokesman at Cairo University was not revolution but that computer skills and English become part of the curricula.

Some Egyptians have turned to civil society -- producing a flowering of nongovernment organizations devoted to everything from promoting Islam, to intercultural dialogue, to in-home care for the elderly, to medical attention for the poor. Some have turned to religion, a very few to extremism. But most, I think, just wait.

According to a recent Brookings Institution report, youth unemployment (ages 15-29) was 16.9 percent in 2006. That is significantly below the 1998 figure of 25.6 percent but still two times greater than the overall unemployment figure of 8.3 percent.

Educated young Egyptians are caught in a trap. The public sector, where most university graduates found jobs until the 1990s, is shrinking. But the private sector is still too small to absorb them. While Egypt's economic growth has created blue-collar jobs, it has not created adequate white-collar employment. As a result, university graduates suffer the highest rates of unemployment. Job searches can take two or three years and often result in employment well below expectations in terms of status and salary.

Sitting in the United States, it is easy to see the Middle East as a series of political crises that need to be solved, or at least managed. Sitting in Alexandria, it is easier to see that Egypt is not summed up by the Arab-Israeli conflict, political Islam, a nuclear Iran or the unending squabbles among Middle East leaders over influence in the region.

These conflicts are important and addressing them in a realistic and even-handed manner will do much to improve American standing in the region. But they are not what Egyptians, especially young Egyptians, dream about. What they dream about is a better life, meaningful work and some influence on the political process that shapes both.

It is here that the Obama administration can perhaps make the biggest difference. Of the whopping $1.5 billion of annual U.S. aid to Egypt, almost 90 percent goes to the military. The level of economic assistance has been steadily declining. There is no guarantee that even this level of economic assistance will continue next year.

American stinginess reflects the financial crisis. But it also reflects the dramatic loss of enthusiasm for democracy promotion to which economic development is securely linked.

The costly failure in Iraq has made Americans leery of even seeming to interfere in the domestic politics of other states. And it has again underlined the dangers of popular politics. There is a very real possibility that it will produce instability, widen domestic cleavages or bring demagogues to power. At the same time, people may chose governments perceived to be antithetical to American ideals and contrary to our interests, as the Palestinians did in Gaza.

But political empowerment is what people here desperately want and need. The United States needs to rise above the fears created by our own failures and the dangers inherent in democracy and articulate a clear, consistent, long-term policy of support for democracy and economic development. From where I sit, nothing would more likely win over the next generation of Egyptians.