The state of the economy is so bad these days that even negative statistics — such as last week’s unemployment report that showed the level of joblessness stuck at an unacceptably high rate — are often treated as good news, because the numbers are not as bad as some feared. But despite all the spinning by both the Obama administration and their cheerleaders in the media, the prospects for a recovery appear dim and are getting dimmer all the time.
One of the latest and most daunting predictions of financial doom comes from the Economic Cycle Research Institute, a New York forecasting firm that during the last 15 years has been right every time about recessions while issuing no false alarms. Their verdict provides chilling news for both the president as well as the country: not only is the weak recovery from the last recession over, but a new recession is certain.
As the New York Times reported last weekend, while there are still some who provide more hopeful predictions, economists at this institute are certain the numbers point to another drastic downturn. They say America’s Gross Domestic Product will go negative by the first quarter of 2012 if not sooner. Unemployment will likely go back into the double digits. As for the chances of averting this outcome, forget it. According to Lakshman Achuthan, the institute’s chief operations officer, “We’ve entered a vicious cycle, and it’s too late: a recession can’t be averted.”
Considering that economic confidence is already low, the prospect of another recession is terrible news for the country. It is even worse for Barack Obama, whose re-election hopes rest on the economy recovering by next summer. The institute’s forecast is more or less a guarantee of his defeat.
But the Republicans who hope to replace Obama in the White House should also be worried. Though this recession will likely sink Obama, the institute’s research leads economists to believe the nature of our economic cycles has been altered for more volatility–meaning more frequent recessions will be the norm in the foreseeable future. That means the next GOP president will likely have another recession to worry about before long.