Election Day 2012 delivered three major outcomes:
- Barack Obama won another term as president.
- Republicans retained control of the House of
Representatives.
- The Democratic/Independent coalition retained control of the
Senate.
In other words, voters signed up for the same general conditions
they had before the election. So why might things be any different
for Americans' finances over the next four years?
Reasons change may be near
It seems doubtful that votes to keep the White House and
Congress in the same hands were resounding endorsements of the
status quo. Americans face
pressing economic problems
, including persistently high unemployment and a looming deficit
crisis. But here are four reasons why the years ahead may be
different:
-
The uncertainty is resolved.
Business managers hate uncertainty. Forget any myths about
whether Republicans or Democrats are inherently better for
business conditions. Since the end of World War II, the economy
has performed nearly identically under Republican and Democratic
administrations. Annual inflation-adjusted GDP has averaged 2.9
percent under Republicans, and 3.0 percent under Democrats. The
bottom line is that smart businesses will adjust to whatever
rules are in place -- they just want to know what the rules are
going to be.
-
Obama can't run again.
Right from Obama's inauguration, a goal of Republican
Congressional strategy was to try to make him a one-term
President by minimizing the number of legislative victories he
could claim. By nature, that's a negative, obstructionist
approach. Now that Obama has won a second term, there will be no
incumbent running in 2016. That means that would-be candidates on
both sides of the aisle will want to start burnishing their track
records, and that means having some accomplishments to show.
-
Recognition is growing that gridlock is not a winning
formula.
For a long time, there was a notion among fiscal conservatives
that gridlock in Washington was actually a good thing, because it
prevented new spending measures from being passed. However, the
huge expansion in the federal budget due to two wars and the
fiscal crisis changed the game. The current course of spending
means that active steps need to be taken to rein in the
budget.
-
A narrow anti-tax platform won narrow support.
The Obama campaign was successful in eroding Mitt Romney's
perceived advantage on economic issues by defining the key fiscal
difference between the two candidates as the willingness to tax
earners above $250,000 in order to address the deficit. This was
a numbers game that Obama was bound to win. Right or wrong,
Romney's defense of the wallets of the wealthiest Americans
wasn't going to win him many votes.
Whether things are really different will be easy to tell: If
America sails off the fiscal cliff at the end of this year, or
otherwise fails to put in place many widely agreed-upon measures to
responsibly address the deficit, it will be a sign that it's back
to business as usual in Washington.
But if not, it could be a sign that the economy is starting down
a new path. If that path leads to
better yields on savings accounts
and improved banking conditions before 2016, it will be a victory
for the president and consumers alike.