CAIRO, Egypt – There’s a typically subversive joke making the rounds in Cairo and it goes like this:

A man is sitting in his car in the usual Cairo traffic jam, when someone comes up and knocks on the car window.

Egyptian riot police beat a protester with batons, during anti government protests in the city of Mahalla.

“President Mubarak has been kidnapped and his kidnappers say unless a billion dollar ransom is paid they’ll douse him with petrol and set him alight. So we’re collecting donations.”

“Ok,” replies the man in the car. “On average, what are people paying?”

“Five to ten litres,” replies the other.

That the popularity of the Mubarak regime is at an all time low is taken for granted in the streets of Cairo. Hosni Mubarak has been in power since October 1981 following the assassination of his predecessor, Anwar Sadat.

Dramatically rising food prices (which have almost doubled since the start of the year), an ever more yawning gap between a tiny, fantastically wealthy elite and the vast majority of Egyptians (nearly forty percent of whom must try to get by on around two dollars a day), corruption, political stagnation and labour unrest all combine to make a very volatile situation that threatens to shake the monolithic Egyptian state.

“I don’t know what Mubarak is thinking,” a friend, whom I won’t identify for his own safety, told me when I was in Cairo two weeks ago. “Doesn’t he realise how bad things have become?”

Here’s another joke I heard: President Mubarak, who was an avid squash player in his younger years, is sitting with a group of his advisors.

“My friends,” he says, “I’m getting old and I don’t think I have much time left on this earth, so I need to know one thing: in heaven, do they play squash?”

“Mr President, we’ll look into it and get back to you as soon as possible,” replies his senior advisor.

The next day, the advisors return to the president.

“We have good news and we have bad news. Which do you want to hear first?” asks the senior advisor.

“The good news, please,” responds President Mubarak.

“The good news, Mr President, is that they do indeed have squash in heaven.”

“And the bad news?” asks a visibly relieved Mubarak.

“The bad news, Mr President, is that you have a game tomorrow.”

But after 27 years in power, many Egyptians suspect Mubarak is surrounded by advisors who don’t like to share the bad news, that Mubarak is completely out of touch with the harsh reality that is Egypt today.

Tuesday Egyptians are supposed to go to the polls to vote in municipal elections. I say ‘supposed’ because most probably will not. The Muslim Brotherhood, the largest and best organised opposition group in Egypt announced Monday that they would boycott the elections due to the unprecedented level of harassment the security forces have meted out to them.

In the past few weeks around a thousand of their members have been jailed. The Brotherhood is technically illegal in Egypt because the constitution bans any political party based on religion. The Brotherhood has been tolerated over the years as a fact of life, and in late 2005 made stunning gains in parliamentary elections. Those elections alarmed not only the Mubarak regime, but also the United States, which had been pushing Mubarak to democratize.

Needless to say, after the Brotherhood’s gains, after the Hamas electoral victory in January 2006, the US is no longer a great fan of democracy in the Arab world, though American officials do on occasion pay lukewarm lip service to the idea.

Adding to the tensions surrounding the municipal elections is labour unrest, focused around the factory town of Mahalla Al-Kubra in the Nile Delta. Sunday workers, who have been agitating for a pay rise, fought with police. At least two protesters were killed. Clashes broke out again Monday evening, and pictures were broadcast of a crowd tearing down and kicking one of the ubiquitous billboards of Mubarak.

People in Egypt are increasingly drawing parallels between the situation today and that that existed in the lead up to the 1952 coup d’état that brought down the Egyptian monarchy. That monarchy, like the Mubarak regime, was plagued by corruption and was out of touch with ordinary Egyptians. Furthermore, it was facing an increasingly assertive Muslim Brotherhood, and widespread labour unrest: the same combination confronting President Mubarak.

But the Egyptian state—with its omnipresent and often oppressive security forces—is not easily shaken. Through violence, intimidation, and the occasional use of the carrot, Mubarak may be able to weather this political storm.

The potential for things to get out of hand, however, is still there. And Egypt, the most populous Arab country, is still for many the standard bearer for the Arab world. There’s a saying that where Egypt goes, the rest of the Arabs follow. And anyone familiar with the Arab world knows that the travails of contemporary Egypt—official corruption, dictatorship, political oppression, economic stagnation and growing public discontent—are ailments common to many countries in the region. If Egypt shakes, the rest of the region will feel the shivers.