It would be fitting symbolism for the next President to wear a crash helmet on Inauguration Day.
He will inherit an economy that will be stuck in either a depression or a slow grinding recession that no economic gimmick or "redistribution" will help.
And he will likely be thrown into a Middle East war between Israel, Iran, Syria, Hezbollah, and the United States.
Americans aren't weak and passive fatalists who go quietly to the slaughter. We fight to solve our national problems and overcome obstacles, no matter how great. But the die has been cast on this Wall Street meltdown, and now the brightest minds on the economy see long-term devastation ahead. Arthur Laffer, the father of the Reagan recovery writes in today's Wall Street Journal that "The Age of Prosperity is Over." He writes, "Financial panics, if left alone, rarely cause much damage to the real economy, output, employment or production." But government intervention does real damage. It was the case after the 1929 crash, and Laffer thinks it will be the case now, with the Bush-Pelosi-Paulson bailout attempt.
How bad could things get? Many younger Americans can't remember bad economic times, because they have never experienced them. Laffer reminds us that during the period of recession and stagflation between the Kennedy and Reagan booms, a period which constituted most of my childhood, "The average annual real return for U.S. assets compounded annually was -6% per year for 16 years." Between 1929 and 1932, the New York Times Index of stocks, the equivalent of today's Dow, contracted some 89%. Unemployment grew to 25% or more, and didn't fall below 10 percent until 1941, with the beginning of World War Two.
Economics guru Nouriel Roubini, the NYU professor dubbed "Dr. Doom" for precisely predicting the current Wall Street meltdown, now predicts "hundreds of hedge funds will go bust and stock markets may soon have to shut - perhaps for as long as a week - in order to stem the panic selling now sweeping the world." Roubani told the London Times that "the world economy was 'at a breaking point'. He believes the stock markets are now 'essentially in free fall' and 'we are reaching the point of sheer panic'."
Add to this carnival of gloom, a Middle East war. This one is easier to explain. An Israeli attack on Iranian nuclear installations in the months ahead is a military and geopolitical certainty, with or without a "green light" from an American president. If Iran's nuclear program is not stopped by diplomatic means, Israel will hit it, and not just with a few bunker busters. Commando teams will have to be dropped because the installations are so far underground. It will be a big operation, and will trigger an Iranian and Hezbollah offensive against Israel, probably sucking in Syria, especially if Damascus senses that Israel can be delivered a knockout blow.
Neither McCain nor Obama will be able to stop any of this. The next President will have to wear it.
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