Let’s consider the economic implications.
If you look at my election predictions from 2010, 2012, 2014, and 2016, you’ll see that my occasional insights are matched by some big misses. So I don’t think I offer any special insight.
But since readers seem to enjoy these biennial predictions, I’ll once again go out on a limb. The bottom line is that my Democratic friends will be happy.
Since so many Democratic seats are up, it will be a big defeat if Republicans stay at 51 seats in the Senate. And the loss of more than 45 seats in the House is approaching bloodbath territory.
This outcome is why I advised my GOP friends that it might have been better to lose the 2016 presidential election.
Now let’s consider the potential economic implications, which is what I care about.
The first-order effect is that we’ll have gridlock, and that’s not a bad outcome as far as I’m concerned. Simply stated, that means less legislation, which presumably means less mischief from Washington.
The first-order effect is that we’ll have gridlock, and that’s not a bad outcome as far as I’m concerned. Simply stated, that means less legislation, which presumably means less mischief from Washington.
But not all gridlock is created equal. Here’s a chart published a couple of days ago by the Washington Post. I’ve highlighted in green the relative stock market performance when there’s good gridlock with a Republican Congress and not-so-good gridlock with a Democratic Congress.
I don’t think S&P performance is the best indicator of prosperity, and the “sample size” produced by American elections is rather small, so I caution against over-interpreting this data.
That being said, I’ve crunched budget numbers and revealed that Republican presidents generally allow more spending than Democrats. The only exception to this rule is Ronald Reagan.