HIGHER UNEMPLOYMENT AHEAD? - AT 9:29 A.M. ET:  From James Pethokoukis's blog at Reuters:

Gluskin Sheff economist David Rosenberg, formerly of Merrill Lynch, thinks the unemployment rate is going to at least 12 percent, maybe even 13 percent. Optimists, Rosenberg explains, underestimate the incredible damage done to the labor market during this downturn. And even before this downturn, the economy was not generating jobs in huge numbers. If he is right, all political bets are off. I think the Democrats could lose the House and effective control of the Senate. I think you would also be talking about the rise of third party and perhaps a challenger to Obama in 2012.

COMMENT:  Politically, no issue is more volatile in 2010 than unemployment.  If unemployment rises to, say, 12 percent, and underemployment continues to rise, that's a huge chunk of the electorate that's angry and frustrated, and those folks generally blame the party in power.  Add to that the possibility that any health or energy bills that get made into law might actually raise prices or taxes, and the political consequences could get into blowout territory. 

Now, of course, Republicans have developed unique skills over the years for losing elections, so let's not pop the corks just yet.  But if the GOP puts up candidates with pretty strong pulses, this might start looking very good.

Also, you have to be very careful with issues like unemployment.  We are talking about misery, and families that are hurting.  The idea is not to dwell on unemployment, but to solve the problem, and make people's lives better.  As the late Mayor Daley (senior) of Chicago used to say, "Good government is good politics."  Trouble is, he didn't mean it.

November 12, 2009