At the end of last week, Goldman Sachs dropped a bomb that does not bode well for reelection chances of The Chosen One. It goes a little something like this …
Following another week of weak economic data, we have cut our estimates for real GDP growth in the second and third quarter of 2011 to 1.5% and 2.5%, respectively, from 2% and 3.25%.
Our forecasts for Q4 and 2012 are under review, but even excluding any further changes we now expect the unemployment rate to come down only modestly to 8.75% at the end of 2012 …
But the slowdown of recent months goes well beyond what can be explained with these temporary effects. … final demand growth has slowed to a pace that is typically only seen in recessions. .. Moreover, if the economy returns to recession—not our forecast, but clearly a possibility given the recent numbers …
So much for keeping our unemployment rate under 8% if we passed his grand stimulus plan. This is also coupled with news of the worst consumer confidence since March 2009. A Thomson Reuters/University of Michigan index of consumer confidence fell to 63.8, which is the lowest level since the early months of Obama’s presidency. Of course, Bloomberg News reported this fall in confidence as “unexpected.”
I know you’ve heard this before .. but this is the worst recovery from a recession since World War II. In the past we’ve relied on growth in the private sector to bring us out of recessions. Government stimulus programs have NEVER done the job. So what’s the big difference this time? The difference is an anti-capitalist named Barack Obama in the White House and a Democrat Party that has become even more radicalized.
Since being sworn in Obama has done absolutely NOTHING that would cause a small businessman – the ones we depend on for new jobs – to say “Now THAT’S more like it! Now let’s get this business going!”
At this point we’re not going to see business become energized until after the 2012 presidential election – and the defeat of Barack Obama.
