We may dispute the economic knowledge of those who say the economy is in a recession, but there is no doubting the trajectory of opinion that the economy has been deteriorating for some time. Part of that trend is due no doubt to housing market issues. The Economist has some interesting things to say about the political fallout from the housing market problems:

almost-homeless homeowners will probably have a marked impact on next year’s presidential election. RealtyTrac’s report showed that five states accounted for more than half of total foreclosures in July. California and Georgia are solidly Democratic and Republican respectively but the other three — Florida, Michigan and Ohio — are election battlegrounds. Some of the highest foreclosure rates are in the potentially competitive south-west. The national foreclosure-rate in July was 1 filing for every 693 households. But in Nevada it was 1 in 199 (the highest in America), Colorado 1 in 347, and Arizona 1 in 433.

It would appear unlikely that the GOP can win in 2008 without Florida and/or Ohio, at least if trends from the last two presidential contests continue. If the administration and the Fed persist in taking the line that the “economy is fundamentally sound,” based on a backwards-looking analysis, it is quite possible that a recession, with all its political ramifications, may be in the cards in the next few quarters. If so, it would appear to be the most unnecessary recession of the last two decades — bad timing for the Republicans, an excellent opportunity for a shrewd Democratic candidate.

This entry was posted on Thursday, August 30th, 2007 at 8:48 am and is filed under business, Democrats, General, idiots!, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.