I woke up this morning in the usual manner. Brewed some tea and fired up the computer… only to be greeted by these lovely headlines.
It appears we are staring down a recession.
This is obviously not a good thing… at least for the present and immediate future. Investments will stagnate, as will job growth. Inflation might increase, along with consumer pensiveness. I’m no economist so I won’t attempt to give any sort of analysis based on market models and crap like that. I will however state that this might be a good thing for America in the long term… politically and in turn, economically.
In recent history, economic fears lead to support for Democrats in our election. We, as a nation, tend to trust them with our domestic well-being. The prime example is the election of Bill Clinton in 1992, as a stagnating economy took down a rather popular George Bush. This cycle appears to be no different. Polls are showing that voters are becoming increasingly anxious about the economy and are voting with it as their most important issue… more so than the Iraq War. It just so happens that turnout in the Democratic primaries (and caucuses) is setting records. (And Republican turnout is down in roughly every state so far.)
If the economy continues to sink towards a recession, voters will once again turn towards the party they trust with taking care of the house. I don’t think they’ll be disappointed they did so, either. A Democrat in the White House means that the debacle of the Iraq War and its billions of dollars a day price tag will soon be ended. (The Seminal has a great piece on why Iraq War spending should be blamed in part for the recession.) The massive spending from the war can be refocused (hopefully not ALL of it – the government probably shouldn’t be spending THAT much money) on economic stimulus among other domestic priorities (health care, fully funded education reform, etc) that will positively affect our economy.
This shift in dynamic with regards to how we spend our money is desperately needed. For the past 7 years, we’ve been teetering on economic uncertainty. The Administration continually tells us how great the economy is doing, but only bases it on some economic indicators (the stock market index and unemployment, mostly). Many other indicators have shown signs of trouble… wage stagnation, weak and/or inconsistent job growth, inflation, and the trade deficit. Our country’s economy is in serious need of an Administration that can openly handle shaky economic times… not one that will get lost in futile foreign pursuits and relying on the good ‘ol private industry as the sole source of prosperity.
The looming recession seems to have woken up the American electorate to this Administration’s ignorance and arrogance (with regards to the economy… not just Iraq!). Let me be clear, I’m not rooting for a recession. Too many people lose jobs. Quality of life for many goes down. It’s a bad thing, and I think the mere threat of one has sufficiently arose the fears of the masses.
But if it does happen, it should lead to good things in the long term. I’ll paraphrase a classic Seinfeld quote… recession now, economic stabilization later.
