I’m going to stick my big toe into these political waters, though, because I’ve been getting a lot of mail from readers who are concerned about the election and want to know what — if any — effects it will have on their portfolios. It might sound somewhat cliché to say that there is a lot at stake for this country over the next four years, but it is true.
Unfortunately, I see little real leadership potential in either candidate, and I have no faith that either of them has an appreciation for what needs to be done … let alone the backbone to do it.
President Barack Obama
I’ll start with the president. The man came to office promising hope and change. And to his credit, he did give the country a much-needed fresh start in foreign policy. He inherited a real mess from the last administration — two ongoing wars and frayed relations with much of the globe — and even if he has appeared weak and slow to move at times, I think most Americans would agree that a little caution wasn’t such a bad thing.
And for all the criticism of his less-bellicose approach to Iran, the Obama sanctions regime has done a better job of slowing the Iranian nuclear program that the Bush Administration’s loud but impotent threats. I don’t agree with many of his decisions in his role as head of state, but I don’t know that McCain would have been any better.
But on domestic economic issues, Obama might well be the worst president since World War II, not to mention one of the most divisive. Decades from now, when the history books are written, his Dodd-Frank “reform” of the financial services sector would probably have gone down in history as one of the worst bureaucratic boondoggles in history were it not for the fact that it was almost immediately eclipsed by “Obamacare.”
You literally would have to go back to Lyndon Johnson’s Great Society to find a piece of law as polarizing as the Patient Protection and Affordable Care Act. Roughly half the states in the union — including my native Texas — are refusing to implement at least parts of the program.
But lest anyone think I am a Republican apologist, Mitt Romney is an awful choice as well. The Republican Party and the country as a whole need leadership; they need a president with the confidence and courage to explain what needs to be done and the force of character to win the country to their cause.
But in Romney, we have a man who will say anything he thinks his audience wants to hear. Rather than lead, he waits to see which way the wind is blowing and then follows. (He wouldn’t want to mess up his perfectly sculpted hair, after all.)
In the absence of real leaders, the Republican Party has become an embarrassment run by ideologues (and I say this as a person who has voted Republican in every election since 1996).
It opposes Obamacare — as it rightly should — yet offers no real alternative reform to reduce health costs. Republicans instead defend an indefensible status quo. For a party that prides itself on being pro-business, I find it ludicrous that they defend a system in which American companies get stuck picking up the healthcare tab for their employees (and if you run your own small business … frankly, you’re screwed).
The party has become nativist and xenophobic on a level that is deeply offensive to large segments of the population — including the fastest-growing demographic, Hispanic voters. To pander for votes, the party focuses on frivolous social issues that have no business being discussed at the federal level (particularly by a party that claims to support limited government).
But more than any of this, the Republican Party has become a party that lives in an economic fantasyland. How, exactly, do you expect to cut government spending by any meaningful amount if you — as Romney does — promise to increase defense spending?
I have a great deal of respect for the men and women of the U.S. military. But given that we spend roughly seven times as much as China (the No. 2 country in the world for defense spending) and more than the next 17 countries in the world combined, I think it is reasonable to expect our forces to get by on the budget they have. But where is the leadership coming out to say this?
I’m also disturbed that the Republicans have gone as far as they have in politicizing the Federal Reserve (Romney has openly called for Ben Bernanke’s dismissal), but that is a much longer rant for another day.
If you put a gun to my head and force me to vote, I’ll swallow my pride and vote for Romney. But I’ll feel dirty afterwards.
I might even deny it.
I encourage readers to vote their conscience today, but don’t be too disappointed if “your guy,” whichever he is, loses. America has had plenty of terrible presidents over its history, and whoever wins on Tuesday will join a long list of men probably best forgotten.
The country has a way of going about its business no matter who is in the White House. The president is not nearly as important as we all seem to think he is. That is the good news.
The bad news is that we are looking at national bankruptcy without a major reform of Social Security and Medicare, and neither candidate is likely to make that happen in the next four years.
There also is the more immediate issue of the fiscal cliff. I expect some sort of makeshift deal to be hammered out in December that will prevent the worst parts of the spending cuts and tax hikes from taking effect. Judging by the performance of the stock market of late, investors would seem to be betting that this is the case.
Remember, the biggest hit to government spending will come out of defense spending, yet defense stocks have held up relatively well; none have shown signs of panic selling.
The issues that America faces — unsustainable Social Security and Medicare obligations and astronomical government debts — are long-term in nature, and the 2012 presidential election will have very little impact on them, at least not immediately. I expect a President Obama or a President Romney (or whoever follows them) to act when the bond market revolts and forces them to act — and not a day sooner.
In the meantime, I expect to see a jolt in economic activity following the election. Quite a bit has been put on hold pending the election and the resolution of the fiscal cliff; there are workers to be hired and projects to be started. The rebuilding efforts following Hurricane Sandy also will create their share of jobs and spending.
Market sentiment has been muted by a disappointing earnings season. But slower growth is already well reflected in stock prices. Add to this the fact that the Federal Reserve and every other major central bank is in money-printing mode, and we have the recipe for a resumption of the bull market.
I worry about the future. But for now, I remain bullish, come what may.
The opinions contained in this column are solely those of the writer.
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