Think this economy is bad? Wait for 2012.

[BlueStateSaint]

All sorts of good news for the Dems!  From the Washington Post:

Think this economy is bad? Wait for 2012.

By Greg Ip
Sunday, October 24, 2010

We're barely two years past the banking crisis, still weathering the mortgage crisis and nervously watching Europe struggle with its sovereign debt crisis. Yet every economic seer has a favorite prediction about what part of the economy the next crisis will come from: Municipal bonds? Hedge funds? Derivatives? The federal debt?

I, for one, have no idea what will cause the next economic disaster. But I do have an idea of when it will begin: 2012.

Yes, an election year. Economic crises have a habit of erupting just when politicians face the voters. The reason is simple: They are born of long-festering problems such as lax lending, excessive deficits or an overvalued currency, and these are precisely the sort of problems that politicians try to ignore, hide or even double down on during campaign season, hoping to delay the reckoning until after the polls close or a new government takes office. Perversely, this only worsens the underlying imbalances, making the mess worse and the cost to the economy -- in lost income and jobs -- much higher.

Election-year prevarication has a storied history in the United States. In the summer of 1971, President Richard Nixon imposed wage and price controls in hopes of suppressing inflation pressure until after the 1972 election. He succeeded, but the result was even worse inflation in 1973 and a deep recession starting that fall.

During the 1988 presidential campaign, Vice President George H.W. Bush and Democratic nominee Michael Dukakis largely ignored the mounting losses in the nation's insolvent thrifts for fear of admitting to taxpayers the price of cleaning them up. The delay allowed the losses and the price tag to grow, and the burden of bad loans hamstrung the economy into the early 1990s.

I think that the American public--the moderates that actually decide such things--will be sick and tired of the Oconomy, and toss the Dems' asses out for the next generation or two.  In doing so, they will turn around the country--and the economy.

The rest of the article is at:

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/22/AR2010102202786.html

[thundley4]

I still think the media plays a part in the economy.  After the Dems took control of congress, the economy took a slight down turn, but it really accelerated during the presidential primaries when the Dems were pushing the idea that the economy was bad and it was President Bush' fault. The media went along and really hyped all the negatives of the economy. That seemed to make it get much worse.

[BlueStateSaint]

I still think the media plays a part in the economy.  After the Dems took control of congress, the economy took a slight down turn, but it really accelerated during the presidential primaries when the Dems were pushing the idea that the economy was bad and it was President Bush' fault. The media went along and really hyped all the negatives of the economy. That seemed to make it get much worse.

Do you think they're trying to "frame the debate," so as to maybe get back at the Obamessiah?  Or do you think that they're finally realizing that they really are supposed to be fair and unbalanced?

[thundley4]

Do you think they're trying to "frame the debate," so as to maybe get back at the Obamessiah?  Or do you think that they're finally realizing that they really are supposed to be fair and unbalanced?

We're starting to see more and more positive stories and the bad news gets less play, so I'd guess the media is prepping for Obama's 2012 run.

[true_blood]

Think this economy is bad? Wait for 2012.
By Greg Ip
Sunday, October 24, 2010
We're barely two years past the banking crisis, still weathering the mortgage crisis and nervously watching Europe struggle with its sovereign debt crisis. Yet every economic seer has a favorite prediction about what part of the economy the next crisis will come from: Municipal bonds? Hedge funds? Derivatives? The federal debt? I, for one, have no idea what will cause the next economic disaster. But I do have an idea of when it will begin: 2012.

I think the economy will be MUCH worse before 2012. Commodities are going to be our killer for now. Look at food prices and gas prices. Gas is almost 89 bucks a gallon and food, well..... Not to mention gold and silver. That and the monetizing of our debt, doesn't look good. I hope to God I am incorrect. I really do.

[NHSparky]

I still think the media plays a part in the economy.  After the Dems took control of congress, the economy took a slight down turn, but it really accelerated during the presidential primaries when the Dems were pushing the idea that the economy was bad and it was President Bush' fault. The media went along and really hyped all the negatives of the economy. That seemed to make it get much worse.

Well, that and $150/bbl oil and $4/gal gas didn't help.

[thundley4]

Well, that and $150/bbl oil and $4/gal gas didn't help.

How much of that oil price was because of speculators due to the fears of a bad economy?

[Allentownjake]

I still think the media plays a part in the economy.  After the Dems took control of congress, the economy took a slight down turn, but it really accelerated during the presidential primaries when the Dems were pushing the idea that the economy was bad and it was President Bush' fault. The media went along and really hyped all the negatives of the economy. That seemed to make it get much worse.

Here is how consumer spending works.  If you have money in your pocket, you spend it.  If you have a credit line you spend it.

If you don't have neither you don't spend money.

The economy went to hell because the Beranank reacted too slowly to the rising commodity prices with his interest policies and by the time he did react, it was too late and he blew up the housing market at the same time.

For his incompetence, he got a second term.  Because everyone knows low interest rates are great for capital formation and real investment that creates jobs.

[Allentownjake]

How much of that oil price was because of speculators due to the fears of a bad economy?

If you fear a bad economy you are speculating demand is going to go to hell and you would logically short oil futures.

People who were long oil futures were making the opposite bet.