The combination of high oil and gasoline prices, rising food costs, higher health insurance premiums and the likelihood of future inflation has jarred consumer confidence, creating a major crisis for the Obama administration.
The collapse has been sudden and dramatic.
In December, the consumer confidence scale in the Rasmussen Poll stood at 81.7 percent. But in January, euphoria set in. President Obama compromised on the George W. Bush tax cuts, the nation seemed to be coming together after the Gabrielle Giffords shooting, and a Republican House sat poised to stop any new spending or social experimentation. On Jan. 11, the Rasmussen confidence index rose to 88.3.
Then reality dawned. Unemployment remained persistently high, economic growth was largely stagnant, and partisan bickering resumed. The confidence level on Feb. 11 dropped to 84.5.
Then, the bottom fell out. The daily Rasmussen polling reflected a drop day after day until, by March 11, the index had fallen to 73.1, its lowest level since it registered a 69 in July of 2009, in the depths of the recession.
The false dawn of January has faded, and the hard, cold reality of a likely second recession is setting in. But this recession is accompanied by the likelihood of inflation, a stagflation syndrome that will probably grip America for years. And which will likely take a manmade recession, on the order of 1979-82, to counter it.
Will Obama get re-elected? No way! In the teeth of the economic catastrophe that is shaping up, his chances are doomed.
The tsunami in Japan, perhaps the greatest tragedy since 9-11, will further impede any prospect for economic growth. There will be a demand for spending to repair the devastation of the quake. But Japan is tied with China as the world’s second largest economy, generating12 percent of the global gross domestic product.
With Japan neither producing nor buying for the foreseeable future, the drag on the global economy will be profound.
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