The true election results are what happens in the time following the election, not what happens on election night. After the votes are tallied, it’s not important who won, but what that person actually does in office.
While this blog is about economics and not politics, let’s look at some issues that will impact the economy after the mid-terms….
Do You Hear Me Now?
The Voters Wrote the Following Message on President Obama’s Facebook Wall: “FOR THE LOVE OF GOD, PLEASE JUST STOP IT!!!!! PLEASE JUST *#$!*!* STOP IT RIGHT NOW.
President Obama replies: Hey, you don’t need to shout. I don’t understand what I’ve done to cause this type of reaction.
The Voters reply: Uhhh … we already knew that.
The main problem with the healthcare bill is there is no money available for the states to be able to pay for it. That’s why governors are so opposed to it and after the election this opposition will increase.
The healthcare plan is similar to buying a new Rolls-Royce on credit. It is wonderful to drive. Your friends and neighbors just ooh and aah about it and of course the chicks dig it. Absolutely everything about the car is a positive experience until the first bill comes. Of course you can’t pay it, so you don’t. Then Matt and Sonia from Operation Repo show up with a camera crew and rip the car right out from under you at a most inappropriate time.
So now the Republicans want to change most of the healthcare bill while the Democrats do not. This is similar to two doctors operating on the same patient at the same time, but not agreeing on what needs to be done. This is not going to end well.
Both my California (business) girls (Whitman and Fiorina) lost. No sour grapes, but the financial problems in the state are huge and I just can’t see them improving much now. Expecting political veteran Jerry Brown to sharpen his pencil (literally) and solve the problems is like asking your grandfather to fix you iPod. “This is pretty small for a transistor radio. How do you get a 9-volt in this dadgum thing?”
The California ballot initiative on legalizing marijuana also went down to defeat. Supporters of the initiative reportedly were very bummed about the outcome. If only there was some way for them to relieve their sadness.
Seems to me if you were going to return to the hippie era and elect Jerry Brown, you would want to go the whole way and legalize pot. California could really use the tax revenue and with Brown in charge of handling their financial crisis, they are going to need more than just medical marijuana to deal with this pain.
Voters also rejected former World Wrestling Federation CEO Linda Mc Mahon in Connecticut. But don’t worry; with this divided government I predict that the upcoming political fighting will make the WWF look like the World Series of Hopscotch.
Get ready for a smack down. Pelosi better put on her game face (or at least pump up her present one). Boehner better hope his tan goes deeper than the first layer because he’s going to lose lots of skin in this game.
And that’s too bad. Many people believe that the government that governs best governs least (Quote often attributed to Ronald Reagan, but he was quoting Thomas Paine). Gridlock results in less “governing” and that worked great in the 1990’s. However, I agree with several commentators that have warned that we have serious problems right now that need to be addressed.
The First Cut is the Deepest
Many people are now alarmed that people who won elections are actually going to --- gasp and gasp again --- cut spending. Oh the horror! If you are spending too much, you either have to get more money, i.e. raise taxes or yes, cut spending. Is this concept too difficult to understand? When people lose their jobs and have less money, they have to cut their expenditures. What makes government so special that it would not have to do the same thing?
Yes, We Have No Bananas (Republic)
It’s probably too late for the election to change this…..
When third-world countries recklessly inject mass quantities of capital into their economies, we laugh at them and refer to them as “banana republics”. When we do it, it is wise monetary strategy. We’re not “printing money” it’s “Quantitative Easing”. The name sounds so pleasant and gentle. You might also say that quantitative easing is what your Uncle Ned does right after finishing his huge Thanksgiving dinner. That doesn’t turn out to be so pleasant and gentle either.
This quantitative easing in this case is like pouring water on a chemical fire. It appears like you are doing something but you are achieving very little. Banks say they have the money to lend but there is little demand from customers. It’s like a restaurant with bad food that tries to stimulate demand by offering all-you-can eat specials. If people aren’t hungry for what you are serving, lowering the price doesn’t help.
Please checkout this video clip from a recent presentation I gave to a job seekers group: Click Here