Listen Carefully

You heard it here first: we are headed back into a recession. Don't believe me? Just look at the evidence on the front page of the NYT. The effects of Hurricane Katrina are a big part of it - we're going to lose 400,000 jobs, face gigantic cleanup costs, and have to deal with dramatic increases in fuel costs (here and here). But we'd have a big problem even without Katrina - there is a slowdown in productivity growth and the housing market is beginning its long-anticipated decline.

Let me make one other prediction. While the Times and others have speculated that our emerging economic difficulties will make it difficult for Bush to pursue his economic agenda, I think that Dear Leader will do what he has always done - make lemons into lemonade. In a recession, what could be better than more tax cuts?