Wednesday, November 5, 2008 0 comments ++[ CLICK TO COMMENT ]++

Opinion: Monumental Win For Barack Obama and The Democrats

(I have decided to inject more non-investment commentary into this blog. This will mainly involve political topics but may also include others. Although I believe politics is important to investing, many others may not want to hear it. So any time I have anything that is primarily an opinion, I will classify it as an opinion piece. Do note that most of what I write on investments is also opinion of a different type.)

Well, Barack Obama's win was quite monumental. Not only is Barack Obama the first black president--he is actually multi-racial so I hesistate to classify him into one camp or the other--he is also largely an outsider taking over the reins from the worst US president since a man by the name of Richard Nixon ruled the country (more about Bush in another post).

The Democrats dominated the voting so now they will have control over the Presidency, House, and Senate. However, they don't have enough seats in the Senate for a filibuster-proof vote on any bills. The following graphic from The New York Times shows the dominance of the Democrats:



USA is facing a whole hoard of problems, ranging from economic, to politicial, to social, to a bogus war, so this isn't going to be an easy time period. It'll be interesting to see how Obama's administration shapes up. I personally don't think it'll be hard to pick better candidates that the current bunch in power. I just hope the Democrats don't end up being too protectionist and hurt the economy.

If I had to guess, I would say that relations with the rest of the world will improve (good); government spending will increase (not so good but ok in a recession); will be hard with China and other developing countries (neutral); will raise taxes slightly (fine); likely to bailout failing industries such as the auto industry (not so good); tough on Wall Street and other investors (not so good); and will be likely stronger on the environment (good for society, but for economy). (do note that I'm a Canadian so this is nothing more than a neighbour expressing some opinion.)

The big Democrat control essentially means that this is the end of the dominance of supply side economics. I don't buy this strain of economics so it's good in my eyes. Trying to grow a country by cutting taxes is going to go the way of the dodo bird. Corporations that have simply increased profits without doing anything and simply relying on continuously declining tax rates are going to face tough times.

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