Better strap in because we could be on a wild ride if what some economic prognosticators are saying is true - not just on a financial market basis, but politically as well.
Noted economist Nouriel Roubini has upped his forecast the economy could head into a double-dip recession. And CNBC "Mad Money" host Jim Cramer is predicting mass panic in the markets after tomorrow's gross domestic product report tomorrow. So based on a lot of this, syndicated columnist Charles Krauthammer suggested that economic fears have returned to the public. He was asked by Fox News Channel's "Special Report" host Bret Baier what all the negative data meant.
"Historically high and number of unemployed for more than six months also historically very, very high," Krauthammer said on the Aug. 26 broadcast of "Special Report." "I think there is something new happening in terms of the economy, at least the perception of it and that is a return of fear."
This fear has returned when the economy seemed to have settled after a tumultuous period at the end of Bush administration and at the beginning of the Obama administration.
"We had the panic, of course - the full-blown panic attack, September-October '08 where everybody had the sense we might run over a cliff," he continued. "What happened in '09 I think was a sense of, ‘Yes, we're in a recession. Things aren't good.' But as Obama himself said, ‘We came, we were pulled back from the brink.' And we were in a bad time, but not a scary time. We had improving numbers by the end of ‘09. At one point we had a recovery of the market to 11,000 and we had a GDP growth at the end of ‘09 of about 5 percent.
But now the metrics aren't indicating just a "pause" in the economic recovery, but a slide in the other direction and Krauthammer explained that's a problem because the government is out of policy measures to help the economy.
"In 2010, we started slipping again and slipping rather badly," Krauthammer said. "GDP numbers sliding very much. They're going to be stagnant now. Shockingly bad numbers on housing this week and the idea that the Fed has run out of options. And I think what is returning is a sense we might not just be in doldrums of pause, as what was suggested in mid-year but headed to a double-dip or worse. And you see that in the jitteriness of the stock market and that I think is new."
What does this mean? The party in power, which is the Democratic Party - currently holding the White House and both chambers of Congress, is in trouble and that doesn't bode well for the upcoming mid-term elections.
"When economic times are bad, the party in power is in trouble," he said. "If people are seized with fear, the party in power has no chance whatsoever."