One Thing to Expect in 2008

I didn’t do any of those 2007 retrospective or ‘what to expect in 2008’ types of diaries. So, here you go:

Goldman Sachs on Wednesday said it expects the U.S. economy to drop into recession this year, prompting the Federal Reserve to slash benchmark lending rates to 2.5 percent by the third quarter.

In a note to clients, Goldman said real gross domestic product would contract by 1 percent on an annualized basis in both the second and third quarters. For all of 2008, the investment bank said GDP would rise by 0.8 percent.

The unemployment rate will rise to 6.5 percent in 2009 from the current 5 percent, it said.

I know we live in a society where everything everything that happens redounds to the Republicans’ (or Hillary Clinton’s) advantage no matter how counterintuitive it might seem. But it’s hard to see how a full-on recession is going to help the Republicans retain the White House.

A further indication of trouble for the GOP can be seen in the details of Goldman Sach’s recommendations. They tell their investors to drop their investments in discretionary consumer spending and information technology and dump it all into health care stocks. People still get sick even, and especially, in bad economic times.

If a recession appears before the nominations are set it could benefit candidates that have a populist message. I guess this is one more reason for Edwards to stick around.

I haven’t done any polls in a while. So have at it.