The Politics of what you Know will happen

[Kurt_and_Hunter]

Every decision made since the election has (I hope!) been informed by the knowledge that unemployment will be higher next March than it is today.

That's not a gloomy prediction; that's what is expected even if the economy picks up strong in late 2009.

(I discount the possibility that anyone in the WH believes otherwise. These people are not fools.)

So what does that mean politically?

GDP will rebound in 2009. The stock market will probably react well to rising GDP.

But the two great pain-inducing factors for the public will deteriorate. Housing prices will continue to decline (even as unit sales go up) and unemployment will rise (even as economic activity increases)

It's a challenging political dynamic.

If I was the President and I knew what even the best case scenario looks like I would want to tamp down populist rage and also damp down expectations in general.

And I think that was very much the tone of last night's press conference.

Good.