(04-03-2010 09:07 AM)Machiavelli Wrote: 15-25 seats. that's my estimate.............. Whatever Reagan lost in 82 should be the benchmark. 10% unemployment will take a toll.
I think unemployment will tell the tale.
In the democrats' favor, this recession has run way past its course, and there should be considerable technical forces driving recovery by now. On the down side of that, I think history will ultimately treat the Bush-Obama "stimulus" activities in the same way that more and more economists are starting to see the Hoover-Roosevelt efforts of the 1930s--by overtreating the symptoms, they actually made the disease last longer and be worse than would have happened by simply letting things run their course. We could very well be looking at 20+ more years of this, like Japan. And while WWII jump-started us out of the 30s depression, I hope nobody tries to make WWIII the solution this time.
On the other side of the unemployment coin, when companies have time to digest the full cost to them of Obamacare, not to mention the other initiatives that Obama has on the table, I expect a strong chilling effect on employment. I still think we could see unemployment at 12 by November, but I think that's more likely next year.
I know this, if I were a CEO right now, and had any hope of expanding any time soon, and had the option of adding jobs in the US or elsewhere, there is simply no way that I'd be looking at the US. I'd have it as an option for my staff to look at, more for morale purposes than anything else, but I just don't see how the numbers could shake out to justify the risks. I spent a fair amount of my career working on plant-siting decisions, and although I really haven't done one in a few years, it certainly seems from the reaches of academia that everything is moving away from favoring the US right now, except perhaps in retail or service where proximity to customers was important. And a retail-service economy is got going to maintain our standard of living. Any efforts to revive the economy by stimulating the demand side push us further in that direction. We are not going to return to economic health without significant stimulus on the supply side. And I see nothing coming out of this administration to foster that. Keynesian economics assumes a closed system. More money in the hands of consumers means they buy more from domestic vendors, who restock from domestic manufacturers, and the money runs around the system creating the famous multiplier effect. When the money is in China or Saudi Arabia by the second iteration, the multiplier doesn't work. Hence the very low multipliers you see in attempts to analyze what's happening. Sorry to get off on the economics theory tangent.
The best thing the democrats have going for them is that the republicans are brutally incompetent. Someone posted that right now the republicans couldn't beat Adolf Hitler for mayor of Tel Aviv.