US Economic Forecast for 2012 and the Election Year Cycle

When it comes to business cycles, the former rules no longer seem to apply. The seminal events that changed the economic landscape after the 2008 financial crash still points to an uncertain future and marginal recovery. If you watch CNBC or Bloomberg business news, you hear that a modest recovery is in place. Accepting this kind of reporting may temporarily make you feel better, but in the real economy, the prospects for a rebound are mere fiction. Prosperity only exists for the chums of the insider financial system, who are immune from actual market conditions. Under the privileged and favoritism model, political subsidies and bailouts are more important than creative industry or innovative execution.
The businesses that produce and service the everyday functions of society flounder in a sea of uncertainty and a desert of capital illiquidity. Within this context, the only realistic way to examine the prospects for 2012, must factor in the political component. Yet the promoters of the corporatist system build up false hope, while fudging the numbers.
Analyze the valid question; Can We Trust The Moderate Growth Forecasts?

"Another day, another economic forecast. The 35 economists polled for the latest Livingston Survey via the Philadelphia Fed project that real GDP for the U.S. will grow at an annualized 2.5% rate for the second half of 2011. That’s down from June’s 3.2% second-half 2011 forecast. Down, but still not out.
Looking ahead to 2012, the Livingston survey forecasters "see the growth rate of economic output slowing to 2.1 percent (annual rate) in the first half of 2012, and they predict that it will then increase to 2.5 percent (annual rate) in the second half of the year." The economists also expect "a slow recovery in the labor market, with the unemployment rate at 9.0 percent in December 2011 and at 8.9 percent in June 2012."

Lakshman Achuthan, chief operations officer of the Economic Cycle Research Institute, talks with Bloomberg about the next year in the U.S. Economic Outlook, Labor Market video.

Mr. Achuthan continues in a second video interview on the Daily Ticker – Says New Recession Unavoidable.

"It’s too soon to predict just how bad it’s going to get, but he expects another spike in unemployment and further expansion of the federal government’s $1 trillion deficit. This forecast has huge ramifications for the 2012 election and the already struggling U.S. consumer and Achuthan says a "mild" recession is the best-case scenario."

This type of analysis is typical of traditional media. But, for a more daring and intense approach that factors political pandemonium into the economic projections, Gerald Celente fills the bill. Mac Slavo writes about Celente Warns Of 2012: Economy Will Crash, Banks Will Close, Chaos Will Ensue, Military Will Take Over.

"If you’ve followed trend forecaster Gerald Celente for any period of time you’ve probably realized he knows what he’s talking about. For the better part of two decades Celente and his Trends Journal have been forecasting political, financial, economic and social trends with an uncanny ability for accuracy."

Celente provides his list of projection. Read them in the Top 12 Trends 2012.

1. Economic Martial Law:
2. Battlefield America:
3. Invasion of the Occtupy:
4. Climax Time:
5. Technocrat Takeover:
6. Repatriate! Repatriate!:
7. Secession Obsession:
8. Safe Havens:
9. Big Brother Internet:
10. Direct vs. Faux Democracy:
11. Alternative Energy 2012:
12. Going Out in Style:

Another perceptive publication projects The Economic Collapse in A Very Scary Christmas And An Incredibly Frightening New Year, sums it up this way.

"The head of the International Monetary Fund, Christian Lagarde, recently stated that we could soon see conditions "reminiscent of the 1930s depression" and that no country on earth "will be immune to the crisis"….

"There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies that will be immune to the crisis that we see not only unfolding but escalating"

The first six months of 2012 are going to be a very key time. National governments and big European banks are scheduled to roll over huge mountains of debt. But if they can’t find any takers that could bring the global financial system to a moment of great crisis very quickly."

Reject the Marc Faber Gloom Boom & Doom Report viewpoint of analysis if you wish, but dismiss these forecasts at your peril. However, what you cannot ignore are the disastrous political consequences of failed public inept intrusions into the private sector that never turns the economy around. Even in an election year, the normal pump priming expenditures, just hit a dry hole. The enormous debt build up in the last three years has done nothing to revive Main Street business.
The partisan formula of an incumbent to buy off voters with an easy money injection into the economy, will not work this time. Yes, the dependency voters may cast their ballot for a second Obama term, but the engine of economic growth, namely; small business is slated for a fire sale under the corporatist prototype of the globalist economy.
Implementing constructive government policies that would unleash merchant small business will not happen in 2012 for a very simple reason. The goal of Wall Street and their handpicked political operatives want private independent enterprises to die on the vine. Social discontent grows daily because the public no longer believes that the political class can provide any viable economic future for the average family. Unfortunately, this attitude misses the mark. Government never produces prosperity. Nevertheless, most people who do voter want to trust in their elected officials. Maybe this fact explains why so many Americans refuse to vote anymore.
The break, with the nostalgia, that the next generation will have it better than the previous one is now shared by even the most optimistic romantic. This election cycle forecasts that economic salvation is illusory. Stock markets may rise, but inflation in stable goods is here to stay. Your money buys less so that the banks can speculate. Government policies and fiscal manipulation, by design, results in dire prospects for 2012. Remember this fact when you vote next November.