Most folks in America did not expect
that the Presidential election results would be called yesterday, November 6 by
the news channels just after 11 pm US Eastern time. As more results came in,
President Obama seems to have won by a landslide, going by electoral votes. The
re-election of President Obama, a Republican majority in Congress and a
Democratic majority in the Senate is not
a status quo as Alan Greenspan says.
Here are some thoughts why:
- The Dow plunged today
given that the stock market was expecting Governer Romney to win and the
real concern over the fiscal cliff of $600 Billion of tax increases and
spending cuts that the Republican Party majority Congress and the
Democratic Party President and Senate must decide on before January
1.In addition coal related stocks are down amidst fears that an Obama
administration will be tough on coal seen as polluting the environment by
the Obama administration. In addition the election of Elizabeth Warren as
a Senator from Massachusetts is seen as Wall Street's worst nightmare.
It was Elizabeth Warren a Harvard
Law Professor who criticized Wall Street and helped set up the US Consumer Financial Protection
Bureau (USCFPB) after the financial collapse of 2007.
- Just as Wall Street is re-grouping, politicians on both
sides realize that the American people have spoken. They do not want time
wasted and confusion on things like rolling back Obamacare ( Healthcare shares were up
today) and Americans clearly want both Republicans and Democrats to
work together and find solutions. Accordingly the hardline stance of House
Speaker John Boehner (Republican) and Senate Democratic Leader Harry Reid
on the issue of the fiscal cliff is softening.
- Although President Obama has won, politicians on both
sides are taken aback by the clarity of purpose of the American
electorate. Candidates that were perceived to understand and
empathize with the plight of the average American seems to have got their
vote. For example, in Connecticut after spending about $100 million for the Senate seat,
the very competent Linda McMahon lost by a wide margin to Chris Murphy.
Economics Nobel Prize winner Amartya Sen concluded from studying
the 1943 Bengal Famine and other world famines, that people died of starvation
not because of lack of food but due to non-democratic regimes that had no incentive
to distribute food to the needy. Thus, no famines occur in democratic societies
as politicians might bicker a lot, but do pull together that deliver results to
the people, lest the next elections result in payback from the electorate.
Although Americans do not face food famines common in the 20th
Century, they do face a famine of economic opportunity. Overcoming the fiscal
cliff is just a minor roadblock that both Republicans and Democrats will surely
overcome. Contact StratoServe.