The Fed will do everything possible to avoid a recession before November 20, 2024. According to Goldman Sachs, inflation is preferable to labor market concerns. That implies the Deep State, with the support of the Fed, will do everything possible to avoid labor difficulties before the election.
When facing an election during a recession, incumbent presidents and their parties suffer. In a recent report, Goldman Sachs emphasized this pattern.
“Since 1951, when the constitutional provision limiting presidents to two terms was passed, the incumbent has lost when the election occurred shortly after a recession (in 1976, 1980, 1992, and 2020). “The party in the White House also lost after a recession in two instances (1960 and 2008) when the incumbent candidate was not on the ballot,” Goldman Sachs wrote on its website.
To get Donald Trump out of the White House, it took a pandemic and economic disruption from lockdowns (not to mention radical vote changes and, as Vivek Ramaswamy put it, a Big Tech conspiracy). What will it be?
Inflation, once again, is less relevant than labor market circumstances. “The strongest statistical relationship with election outcomes is often with variables measured in the second quarter of an election year,” according to Goldman Sachs. Inflation appears to be less predictive of election outcomes than variables relating to growth or labor market conditions. According to Phillips and Krupa, headline inflation is a weakly statistically significant predictor of election results in a sample dating back to 1952. Elections at periods of high inflation show a stronger link, although the signals provided by GDP and labor variables are stronger even in these elections.”
So, if the decision is between Joe Biden triggering a recession or Bidenomics generating another round of skyrocketing inflation, you can bet the Deep State will choose inflation.
