In the wake of our debate last week on the proper policy for the Fed, I have been meaning to do a post on how an economic downturn would impact the 2008 presidential election, though I noticed that Marc Ambinder beat me to the punch.

We should never forget that Bill Clinton swept into office because of a rather mild recession that we were already climbing out of by the time the November election hit. The 2008 Republican nominee will already have his hands full trying to deal with public dissatisfaction with Iraq, if you add a bad economy into the mix, the political argument for change may be too difficult for any GOP candidate to overcome. Rudy would talk about his strong economic record in New York City or Romney would talk about his background as a turnaround artist, but at the end of the day, both will support making Bush's tax cuts permanent and thus will be associated with policies that the Democratic nominee, aided by the media, would be sure to portray as the culprit. Also, keep in mind that the economic anxiety in 1992 is what helped fuel Ross Perot's candidacy, so perhaps a Mike Bloomberg independent run as the competent manager type would have more appeal in such an environment.

I still disagree with Quin's idea that the Fed should cut rates, and I don't think it is wise for the Fed to make its decisions based on short-term market fluctuations, especially when the threat of inflation is so legitimate. And I'm not even predicting doom for the economy. I'm just speculating as to how it may affect the election if, in fact, the current stock market volatility does prove a leading indicator of a coming economic downturn.