Electoral Recession

Some worry that much of the isolationist rhetoric coming from the presidential candidates will spark a global recession. From the International Herald Tribune:

Souring public sentiment could mean a reduced U.S. role in the global marketplace if voters start to demand a change in economic course, analysts say.

Eurasia Group, a New York consulting firm, on Monday called U.S. resistance to globalization as the greatest political risk for global markets in 2008 – topping Iran, Iraq and terrorism.

Others might say don’t worry about a future recession, worry about the one we might already be in. From CNNMoney.com:

The tipping point for both economists was the report released last Friday that showed a sharp jump in the unemployment rate in December, coupled with little growth.

“Friday’s employment report strongly suggests that an official recession has arrived,” wrote David Rosenberg, North American economist for Merrill, in a note this week entitled “Recession a reality.”

The first Clinton won largely blaming a recession on the first Bush. When the second Bush took office I do remember Sean Hannity calling the recession that lasted from March to November of 2001 the “Clinton recession.” Democrats were calling it something else.

What I thought I cynically learned from the 1992 economy discussion is someone with any kind of plan (Bill Clinton had ideas.) can get a lot of political mileage, especially if he or she is in no position to implement them. It also helps if the opponent appears helpless on the matter, looks at his watch in debates and if there’s a third candidate in there helping you gang up on the first one. Candidates from both sides will have the luxury of talking big ideas without testing them this year.

all this leads to the question: If the economy dips low enough for Americans to notice it this year, who’s your winner in November?

4 thoughts on “Electoral Recession

  1. What I learned from the 1992 campaign was that the NBER could not be relied upon to declare the end of a recession until after the Democratic candidate won the election. The recession ended in March 1991, but the end wasn’t announced by NBER until Dec. 22, 1992.

    If there is a recession now, it will probably have ended by Nov. 2008 or very shortly thereafter.

    The NBER is likely to announce the beginning of a recession quickly, since a Republican is in the White House. See what occurred in 2001 – the recession’s beginning was announced in November, only 8 months after its reported beginning in March. It ended in the same month its beginning was announced – Nov. 2001 – but that ending was not announced until July 2003.

    The candidate who makes the most dishonest, demagogic use of the possibility of a recession will benefit the most from whatever talk of a recession there is. The NBER will not do anything to prevent the demagogic use of the state of the economy.

  2. All this talk in the mediasphere about a recession makes my head hurt. By almost all measures we are in the midst of a robust economy. It almost seems like certain corners want to talk us into a recession, presumably for political reasons.

    For example, the quotation you use talks about a “sharp jump” in unemployment. Hello!! We’re still at historic lows for unemployment–5% used to be regarded as full employment, now it’s the harbinger of recession? I don’t get it!

  3. Bob, I believe there is a special fund that you must pay into if you use acronyms that others don’t know. So, you owe, let’s see, at $5.00 for NBER.

    I was fascinated with Steve’s take, because it almost seemed as if he was leading us to the conclusion that Obama would be the choice, then he didn’t.

    “By almost all measures,” Greg, explain, because there has been a 25% increase in demand at food banks, countrywide foreclosures and defaults on loans? Things look pretty bad for a lot of people.

  4. Mary, click the link I put in the above comment, and you will find what “NBER” stands for — along with the source for the information I included in the comment.

    What does the special fund support? Fred Thompson for President? 😉

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