What Are The Odd's For Recession and How Does This Affect Politics?

This article looks at the chances that the US economy will go into a second recession. Nobody is forecasting a rapid turnaround in the economy. Most projections for growth in 2012 are anemic. It will feel like a recession, whether or not we have two consecutive quarters of negative growth, which is the formal definition of recession.

It is interesting to look at the history of economic forecasts of recessions. An economist from the Fed has determined that an economy that experiences weak growth, like we are currently experiencing, reaches a "stall speed" that usually leads to a double dip recession. Economic forecasters have not been good at predicting recessions. One reason is that since recessions are rare, it is not wise to predict a rare event. Consequently, few forecasting organizations are predicting recession.

The bottom line is that 2012 will not be a good year for the economy. The 2012 elections will be held in period of poor economic performance. The president's speech on jobs this evening will signal the administration's approach to the campaign. He will make "bipartisan" proposals which have often been on the GOP wish list for ways to encourage economic growth. This is consistent with his plan to enlist independent voters to his cause. The GOP will not support his plan, and progressive democrats will find fault with it as well. Independent voters are independent for a reason. They don't have strong feelings about politics, and many are low information voters for that reason. They will cast their votes in 2012 based upon their perception of the direction that the economy is taking. The president's strategy of assuming support from progressives, and campaigning for the elusive independent vote is very risky. The GOP has been much better at marketing to low information voters than the democrats have been. Sound bites are superior to rhetoric in marketing campaigns. Running as a Republican Lite may turn out to be a bad strategy. American's tend to expect strong leadership from their presidents. Placing the blame for a poor economy on an obstructionist GOP may not sell.