Fresh off the presses today from Reuters via Gateway Pundit and Hot Air— “Panic at the White House? Gloomy Goldman Sachs sees high unemployment, possible recession”
Last night in a new report, Democrat-friendly Goldman Sachs dropped an
economic bomb on President Obama’s chances for reelection (bold is mine):
Following another week of weak economic data, we have cut our estimates for
real GDP growth in the second and third quarter of 2011 to 1.5% and 2.5%,
respectively, from 2% and 3.25%. Our forecasts for Q4 and 2012 are under review,
but even excluding any further changes we now expect the unemployment
rate to come down only modestly to 8¾% at the end of 2012.
The main reason for the downgrade is that the high-frequency information on
overall economic activity has continued to fall substantially short of our
expectations. … Some of this weakness is undoubtedly related to the disruptions
to the supply chain—specifically in the auto sector—following the East Japan
earthquake. By our estimates, this disruption has subtracted around ½ percentage
point from second-quarter GDP growth. We expect this hit to reverse fully in the
next couple of months, and this could add ½ point to third-quarter GDP growth.
Moreover, some of the hit from higher energy costs is probably also temporary,
as crude prices are down on net over the past three months. But the
slowdown of recent months goes well beyond what can be explained with these
temporary effects. … final demand growth has slowed to a pace that is typically
only seen in recessions. .. Moreover, if the economy returns to recession—not
our forecast, but clearly a possibility given the recent numbers …
Alarms bells must be ringing all over Obamaland today. Unemployment on
Election Day about where it is right now? Sputtering — if not stalling —
economic growth? To many Americans that would sound like the car is back in the
ditch — if it was ever out. Maybe Goldman is wrong, but economists across Wall
Street have been growing more bearish.
This little bit of truth about “Welcome Back, Carter” is not brought to you by the evil FoxNews or right wing analysis, but by Goldman Sachs. The very Goldman Sachs that invested heavily into the election of Barack Obama. From HotAir:
Yes, that Goldman Sachs, the investment firm with lots of political ties, but generally more friendly to Democrats than Republicans. In 2008, the firm bet heavily on Barack Obama, with almost a million dollars in contributions from its PAC — the second-highest contributing organization, only trailing the University of California’s PAC. One of its former employees, Rahm Emanuel, ran the West Wing for Obama until leaving for the Chicago mayoral race late last year.
And, of course, King Obama and his court told us back in 2009 that things would be rosy by now:
And recall that back in August of 2009, the White House — after having a half
year to view the economy and its $800 billion stimulus response — made an astoundingly
optimistic forecast. Starting in 2011, with Obamanomics fully in gear and
the recession over, growth would take off. GDP would rise 4.3 percent in 2011,
followed by … 4.3 percent growth in 2012 and 2013, too! And 2014? Another year
of 4.0 percent growth. Off to the races, America.
Even in its forecast earlier this year, Team Obama said it was looking for
3.5 percent GDP growth in 2012, followed by 4.4 percent in 2013, 4.3 percent in
Of course, they probably didn’t believe it and most people paying attention didn’t either And now we know it was all smoke and mirrors. These economic indicators are very pertinent to the debt ceiling and budget discussions. Again from HotAir:
We’re certainly not going to see 4.3% growth in 2011; we’ll be lucky to get to 2% at this pace, and the same is true for 2012, barring a sudden conversion to supply-side economics at the White House. That has an enormous impact on the budget debate, too. The administration’s predictions of revenue are based on that Pollyannish forecast Pethokoukis mentions, along with significant drops in joblessness. If that growth is halved or worse, revenues will fall far short of expectations and the budget imbalance will grow even worse.
“Welcome Back, Carter” indeed.
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