Lyric discussion by caitsith01 

I have heard that this song is about the Statue of Liberty, and looking closely at the lyrics I think this is entirely plausible. By extension, then, the themes in this song are about democracy and freedom and the dream of the American republic.

A few bits to support this:

"By the way that's a cute hat/and that smile's so hard to resist" - i.e. the crown on the statue plus her peaceful smile.

"What's a sweetheart like you doing in a dump like this?" - what's Liberty doing in the US, which Dylan saw at the time as a place of decay and greed? This song is from the album 'Infidels', in which he sings about the decline of the union, the threat of nuclear war (or gun violence?) and other such themes.

"Just how much abuse will you be able to take?" - how much corruption and decay can the democratic dream take before it succumbs and fades away?

"You can be known as the most beautiful woman/who ever crawled across cut glass to make a deal" - democracy/liberty can really achieve something wonderful by fighting through all the troubles and enemies of true freedom, or at least its a possibility.

"news of you has come down the line" - i.e. people around the world have long sought to implement the dream of an egalitarian society.

"people are jealous of you/they smile to your face but behind your back they hiss" - there are a lot of people who would like to get rid of the inconvenience of freedom and democracy if they could, but they pretend they like it even while they work against it.

"Steal a little and they throw you in jail/Steal a lot and they make you king" - typifies Dylan's attitude to US politics in this era.

Anyway, just my thoughts. Of course, there's clearly a second theme about the protagonist meeting a woman in a bar or similar and falling for her while he thinks about the 'queen' he 'made disappear.'

Great song, from a highly underrated album.

You're about 99% right. On one level it's about Lady Liberty, the spirit that the statue represents. The statue is like a snapshot of that spirit frozen in time. The song describes the descent into "the land of permanent bliss," you can almost taste the sarcasm as he spits out those words describing post modern America where Liberty is abused by decadence & religious zealots. On another level, applying Jungian analysis, she's the female component of the male psyche, the "Anima" who, like Beatriz in Dante's Inferno, is the guide that symbolically leads the soul out of the Inferno through purgatory...

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