Having not heard or read this point anywhere in the cacophony over the New Yorker cover, let me add it myself.
The reactions to the cover have been in two camps: 1. It is satire. Grow a sense of humor. Or at least, recognize that this is a distillation of what red state people think (Obama/Osama). 2. It is humorless and crystallizes all the worst assumptions and offensive to Obama.
I am not going to debate with either of those. My post below, the "Finally", refers instead to a different crystallization.
This cover, my gentle readers, renders absolutely the full melding of "terrorist" and "muslim" in American cultural conscience.
The rumors (or smears) on Obama were never that he was a terrorist but that he was a Muslim. Go back to early 2007 and trace it on freeper boards or hannity forums. You will only find insinuations about Obama attending madrasas or having been to mosques. As the rumor progressed, its apogee was reached in the NYT wherein Luttwack declared that the only thing mattered is that Muslims think he is a Muslim.
So here we are, in Bill Burton's cover, and he starts from the assumption: Rumors are that Obama is a Muslim. Now examine that depiction; note how a "Muslim" is shown. Obama is clad in what seems to be Tabligh'i garb, there is a portrait of Osama b. Laden and a burning American flag. The transference of Obama to Muslim and Muslim to Terrorist is not only seamless, but, also immediate. The "terrorist fist jab" is another point in case. When that characterization took place (Hezbollah does that!), the readings on Debbie Schlussl and Michelle Malkin etc. was not that Obama or Michelle were terrorists. Taking my reading a tad further, the Michelle is obviously an add-on (Dear Wiki, if all Muslims are terrorists and which Black folks are also terrorist?).
Of course, I do think that the cover is funny - insofar as we all assume that all Muslims are terrorists. Which I habitually do. The New Yorker can elide all differences between a Muslim and a terrorist because those associations are realistically generalizable. Our rumor-based society gets what it deserves.
related: A Muslim Like Obama.
update: Via Juan Cole, I learn that CAIR does protest.
I think Digby veers close to something by showing it not quite so much that "all Muslims are terrorists" but that "Muslim terrorist is the new/the same as a black boogeyman": I've been wondering since 9/11 when the right would get around to conflating the Muslim terrorists with "black Muslims" and I think it may have finally happened in the couple of Barack and Michelle Obama. It would seem odd that the right wingers would smear him as being muslim. He's black, not arab, and it doesn't fit the stereotype. But it does fit the stereotype of the Farrakhan type of militant black muslims and that's what they're getting at with this. The image of the dangerous black radical is the purpose of the muslim smear, not the terrorist association. It's good old, All American racism.
So the point is that it's all just in the mess of scary Other, and what the cover does is shows (or tries to) how illegible (and overdetermined?) this scary Other actually is. When Obama was just a Muslim... but now he's also a scary Black separatist, etc.
Hmm. That digby link is: http://digbysblog.blogspot.com/2008/07/muslims-and-militants-by-digby-there-is.html
"The rumors (or smears) on Obama were never that he was a terrorist but that he was a Muslim." Well, sure .. Saying Obama is Muslim has various connotations that allowed it to culminate to the point of terrorist. Simply being Muslim .. Obama is lying that he is Christian - why? Agenda? The insinuation that even he knows that a Muslim can't get elected. Then of course you have the various he's an apostate theories that think about it really hard and our national security is at stake. In a way though I think this whole Obama Muslim thing works for him. Often the Muslim issue gets more play than the issues issue - what a way of having your name out in the public arena - being on constant defense of obvious lies. Maybe McCain should one up Obama and convert ;-)
Like muslim?