Did Obama’s rise spur the stock market, and might a Democratic sweep save America?
Posted by James McPherson on October 13, 2008
The economic news today was good, a shift from what we’ve been seeing in the past couple of weeks. I had told my wife over the weekend that I wished I had a bunch of money to invest in the market, because I thought change was coming, but having seen what happened to my retirement account in the past quarter she naturally considered me insane.
The reason I thought the stock market might be scheduled to make a comeback had a wee bit to do with the variety of goverment actions taken to try to forestall a total collapse–which, incidentally, still could come–and the fact that I thought we were approaching a natural bottom. But frankly I’m a long way from being an economic whiz, assuming there is any such thing anymore.
Why should that matter, especially when Republicans often (and wrongly) are viewed as the better party for the economy? It matters because investors don’t like uncertainty, and knowing who probably will be president helps them plan accordingly. Knowing that the election probably won’t be a nailbiter like we had in 2000 and 2004 also means that civil unrest ranging from local riots to insurrection is less likely.
Additionally, it helps that today Obama was the first of the two candidates to come out with a meaningful economic plan. I honestly don’t know how good his ideas may be–but I know that people are likely to feel better just knowing that he has some.
Today’s news doesn’t necessarily mean that we’ve seen the worst, of course, and we will be dealing with serious economic problems for years–maybe decades–to come. That brings me to another key point, which may irritate even more people than my August prediction of an Obama victory or my crediting the stock market jump to Obama’s current lead in the polls: The best chance for the United States to make the kind of sweeping economic changes necessary to stave off a new Great Depression might come via electoral victories by Obama and several Democratic Senate candidates.
We might be OK either way, frankly. The Founding Fathers were big on divided government for a reason: They recognized that a division of powers would force cooperation and reduce the likelihood of dramatic but foolhardy changes. They did not anticipate how gutless Congress would become, or how much the Bush administration would do to shift an uneven proportion of power to the executive branch.
The also did not anticipate a government like we had from 2000 to 2006, in which all three branches of government would be controlled by one party–a party in which too many of its members were far more concerned with increasing their own power than in bipartisan efforts to do what was best for the country. A John McCain presidency coupled with a Democratic Congressional majority would restore a balance of power.
On the other hand, since McCain is likely to promote the concerns of his own party, this may be one of those rare instances in which having the executive and legislative branches under the control of one party–especially if the Democrats can somehow pull off a filibuster-proof majority in the Senate–might actually be necessary to push through the kinds of sweeping reforms needed to save the economy over the long run.
Such a majority probably helped bring us out of the Great Depression, though some historians today disagree with that contention. I would also point out that if the Democrats prove to be as arrogant, power-hungry and out of touch as the recent Republican majority was, then equally dire–though as yet unknown–results are likely.
Besides, a Democratic majority may use its power to do things that make the situation worse (if that’s possible) instead of better. We’ll see near-total economic crisis can scare “leaders” into leading.