Richard Whalen

What obstacles? Let’s start with consumer confidence. Lynn Franco, Director of The Conference Board Consumer Research Center says: "Consumer Confidence posted its third monthly decline and continues to hover at two-year lows (Oct. 2005, 85.2). Further weakening in business conditions has, yet again, tempered consumers' assessment of current-day conditions and may very well be a prelude to lackluster job growth in the months ahead.”

This dramatic drop in consumer confidence, eroded by a declining housing market, rising gasoline and food prices, and tougher lending standards imposed by banks in the wake of a credit crunch, has now caused government retail sales projections the lowest in five years.

If that were not enough, retailers have also had to deal with one of the warmest Octobers on record and many retail stores have already begun to mark down their winter inventory. According to a new study by BDO Seidman, “almost three-quarters of chief marketing officers at leading U.S. retailers believe discounting and promotions will be more plentiful this holiday season compared to 2006.”

Traditionally, consumer spending accounts for two-thirds of total economic activity and many economists now fear that further consumer cut backs will fan the flames of recession.

To date, both Republican and Democratic presidential candidates have managed to ignore or skirt economic issues or at best walk around our worrisome economy with vague proposals such as a retirement savings plan for lower and middle class families (Clinton) or a refundable tax credit worth $4,000 for college tuition (Obama), or a tax credit to match up to $500 a year in savings for families earning up to $75,000 (Edwards), or a recital of the benefits of supply side economics (Giuliani.)

But voters are talking. In the latest New York Times/CBS News (see Question 34) poll, both Democrats and Republicans in Iowa and New Hampshire place the issues of the economy and jobs as the third most important issue in deciding who they would like to see elected president. Democrats: Iowa 17 percent; New Hampshire 18 percent. Republican numbers are quite similar: Iowa 17 percent; New Hampshire 23 percent.

Not only is there little recognition among the candidates of the bleak holiday sales season or the dismal economic forecast in general. These same candidates are also silent about how these real economic problems can be solved.

Reality will strike back on Election Day 2008. The general electorate will not forget the coal they found in their Christmas stockings or the state of their employment, or the loss of their home or the maxed-out credit debt. I predict that voter turnout will be the highest in our electoral history.