Friday, May 2, 2008

Economic storm clouds still gathering

With headlines like Buffett: Economy in a recession, will be worse than feared and McCain & Clinton Fail Economics 101, I thought that it is time to focus on the possible effects of the November presidential elections.

Clinton or Obama presidency = Double dip?
With the US fiscal situation as it is today, a Democrat in the White House, regardless of whether it is Clinton or Obama, would likely raise taxes to try to bring the budget more into balance. Can you say double dip recession?

It’s usually in the first two years a new administration will try to take its economic medicine and blame it on the previous president. Remember how the current Bush administration tried to position the post-Tech Bubble slowdown as the “Clinton recession”?

McCain presidency = ???
When John McCain was quoted in 2005 as “I'm going to be honest: I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated” in that bastion of left wing politics, the Wall Street Journal, the country could be rudderless economically.

A more recent quote shows that he still has no economic direction: “The issue of economics is not something I’ve understood as well as I should. I’ve got Greenspan’s book.”

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