The surprising show of Barak Obama in the Iowa primaries, followed by Hillary Clinton’s victory in New Hampshire, shows how exciting the US presidential race promises to be. But even as the country goes through the long process of choosing its two candidates and preparing for national elections, the question for economic observers is what kind of economy the new president will preside over – and whether he/she will want to preside over it!

The signs of a sharper slowdown are becoming more abundant. Over the Christmas season the bad news has included a jump in the unemployment rate –to 5%, an excellent figure on the international scene but more than half a percentage point higher than the previous figure–, a sharp drop in durable goods orders, the persistent credit crunch and the housing slump which in some regions could turn into a full-blown crisis. Add to the mix petroleum prices of $100 per barrel, and the combination could be a recipe for a slowdown, at the very least, and recession combined with inflation (stagflation), at the worst.

Given these prospects, who would really want to win the U.S. elections? The new president will face not only ending the Iraq war and sorting out the health-care issue, but also presiding over what could be the worst economy since the early 1990s. It´s not an attractive prospect… and it would take an excellent manager or extraordinary good luck to address the challenges well enough to win a second term.