Political Bloviation

The economy seems to be circling the drain. Check out Paul Krugman’s op-ed column from today’s NY Times:

The unemployment report on Friday was brutally bad. Unemployment rose in December, while job creation was minimal — and it’s highly likely, for technical reasons, that the job number will be revised down, showing an actual decline in employment.

It’s the latest piece of bad news about an economy in which the employment situation has actually been deteriorating for the past year. It’s no longer possible to hope that the effects of the housing slump will remain “contained,” as one of 2007’s buzzwords had it. The levees have been breached, and the repercussions of the housing crisis are spreading across the economy as a whole.

It’s not certain, even now, that we’ll have a formal recession, although given the news on Friday you have to say that the odds are that we will. But what is clear is that 2008 will be a troubled year for the U.S. economy — and that as a result, the overall economic record of the Bush years will have been dreary at best: two and a half years of slumping employment, three and a half years of good but not great growth, and two more years of renewed economic distress.

Not much good news in unemployment reports. It points to a growing possibility of a real recession of the worst type. With rising prices for oil and weak dollar we could see a return of the stagflation of the 70s. Krugman goes on to note that reagrdless of the state of the economy GOP reverse Robinhood policies are always the prescription. Times are good, it’s because of tax cuts, times are bad pass more tax cuts.

Then there’s this from McClatchy:

“The roughly 40 percent spike in consumer bankruptcies during 2007 presages even higher filings this year, as the heavy consumer debt load is made worse by the home mortgage crisis,” said ABI Executive Director Samuel Gerdano.

Final state-by-state bankruptcy statistics for 2007 have yet to be released, but the picture is similarly bleak based on data from January through September. In California, for example, bankruptcies during the first three quarters of 2007 increased by 87 percent — from 27,230 to 50,869 — when compared with the same time in 2006.

The sub-prime mess continues to spread to the rest of the economy. This kind of economic bad news is always to the detriment of the incumbent party in a presidential election year. Right now it looks as if the GOP has little to no chance of keeping the White House regardless of the nominee. They’re headed for a well-deserved exile into the political wilderness for the foreseeable future. A weakening economy strengthens the position of a change candidate. I believe this will force GOP candidates to run from the Bush leagacy. That pretty much kills hopes for McCain and Guiliani. That leaves the plastic one who ought to be pivoting on the Bush economic records in second now. Ready, set flip-flop Mitt!

I don’t think Huckabee was a ever a real supply side true believer like Rudy and Mitt, which might leave him a little more space between himself and the Bush economic train wreck. I don’t envy whoever ends up in the White House, they’ll be left with painful choices and a mess to clean up.

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