The election is finally over. Although it’s a good reminder of the democracy in which we live and it’s important we exercise our freedom by going to the polls to cast our ballots, it sure is nice that we just go through this once every four years. After the billions of dollars spent by each campaign in an effort to educate the general public and sway voters to vote for their respective candidate, what is the ultimate impact of the election?
Since President Obama won re-election, the House remained in control of the Republicans and the Senate still is held by the Democrats, we shouldn’t expect much to change in the sense of how our country is run (for better or worse). There are two main takeaways from this idea of gridlock between the House and Senate with each political party having control of a branch of Congress.
The first is the notion that the stock market prefers when Capitol Hill is inactive. Stock traders’ and money managers’ jobs are much easier when there is a lack of change being rippled across the economy and capital markets by politicians. Whether the possible change is an increase or a decrease in regulation, the idea that the investment landscape could be affected makes traders uneasy. The ‘hands off’ approach by Washington is often welcomed by Wall Street and preferred by those active in the markets.
The downside to political gridlock is the inability for politicians to truly fix the problems facing Americans. Taking the partisanship out of it, we face some staggering problems that shouldn’t be passed on to our children. No matter where you place the blame, the debt burden we’ve accumulated, the drop in rankings for our math and science programs, the steady rise of families on food stamps, and the slowly encroaching of some of our basic civil liberties, just to name a few are not the bedrocks of the American dream many of us hoped the next generation would inherit. Whether these problems should or can be solved by Washington D.C. is a discussion for another day; the point here is when politicians are unable to cooperate, the issues they should be addressing get swept aside in favor of grandstanding partisanship.
In the next few months the lame duck Congress will be forced to address the approaching fiscal cliff and the possible tax and spending consequences that are attached to it. As politicians are famous for doing, the can will likely get kicked down the road before they allow the U.S. economy to be driven over the edge, which if allowed to do so could cause our Treasury bond’s to incur a possible downgrade from two major rating agencies.
While the election season has run its course, there are still some major roadblocks that we must get over as a nation. I truly hope those we have elected are up for the challenge. It seems our country is at a crossroads and the direction we take will have everlasting consequences.
Joseph “Big Joe” Clark, whose column is published Sundays, is a certified financial planner. He can be reached at bigjoe@yourlifeafterwork.com or 640-1524.
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'Big Joe' Clark: A non-partisan election view
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