Wednesday, November 05, 2014

Election results in, what will follow?

The Republicans now control the Senate and control the House by an enhanced margin.  The Democrats were unable, or unwilling, to take advantage of the rebound in the economy since the dog days of 2009 and the current relative strength of the U.S. economy under the Obama administration.  Exit polls showed that the economy was the most important issue in the majority of voter's minds, but the Republicans achieved a wipe-out at the polls.  As mentioned in a post here on Monday, while the economy has rebounded, "expectations have not been met for many.  If the economy is the biggest issue, the choice is not yet clear."  In situations like this, a "kick the bums out" is often the default mechanism of voters.

What happens now?  The first big issue is whether President Obama still decides to bypass Congress and take executive action on immigration reform near term.  If so, that will not bode well for cooperation near term.  We'll see.

If a confrontation over that can be averted, it is possible that Obama will feel motivated to work on some bipartisan legislation on issues like immigration, infrastructure spending, and tax reform.  As he still will have the power of the pen, the Republicans could be motivated to work with him as well, since they would almost certainly want to approach the 2016 Presidential elections with some level of accomplishment.

One must consider that Obama has not been working well not only with Republicans in Congress but also with Democrats.  He has been isolated with an inner circle of White House staff, and now he is in a funk about being excluded by many of his own party members from participating except marginally in the 2014 elections.  How much can his perceived arrogance take?  To salvage his reputation and to chart his own course, he may now enjoy not being beholden to the Democrats in Congress any more than he is is to Republicans.  In this awkward scenario, compromises may be possible.  Wishful thinking maybe but, as a start, getting much needed infrastructure spending underway and consequentially a better job producing fiscal policy revved up could be just the tonic for growing the economy in a way that has more widespread results and buoys the middle class.  Immigration reform, even if watered down somewhat, needs to come next, and if those two things were accomplished in 2015, that would be amazing.  Comprehensive tax reform will need to wait, as only one-offs will be possible before Congress goes idle during election year 2016.

The Republicans could get lucky.  There are situations where the times make the man, or woman, rather than the man, or woman, making the times.  The former was often observed here in business.  "So and so was such a great manager" they said, when really he just happened to be appointed to the business that he ran as it hit its economic sweet spot.  "So and so was just a terrible manager" it was said, when his business was hit by economic conditions that made success untenable and he worked mightily just to lose less.  Given some wind at their backs, the Republicans could be in a situation that makes them look smart, if they don't screw it up.

Here are two other observations from yesterday's results and commentary.  First, those Republicans that tried to hang ebola and ISIS around Obama's neck were misguided to say the least.  Was their Party playing any role of leadership on these issues, raising any alarms, or offering any insight?  Very little.  Second, the Clinton's took a bashing and one could question whether their time has now finally passed, both Hillary and Bill.  One could cringe every time hearing Hillary's enthusiastically cute "I'm back" at an event earlier in the year in Iowa is replayed.  They both did everything possible for the losing Grimes in Kentucky and Pryor in Arkansas, obviously without results.  

To conclude, 2016 will still find the Democrats with a substantial lead among black voters, Hispanic voters, gay voters, voters focused on the environment(millennials), as well as their customary liberal base, and they are not by any means compromised in that race by the 2014 mid-terms, or at least that's the opinion here.

 

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