Economic and Political Outlook for Business

So we just came through a really rough patch whereby the political and economic outlook were abysmal for business in the US. Today we expect to see the US Congress finish up passage of the short debt ceiling compromise bill negotiated in the House and Senate with President Obama. Once this work is finished, election season can begin in earnest and get into full swing.

Economic and Political Outlook for Business in the 2012 Election Cycle

You can read it here: the political leaders are going to do everything in their power to make this election cycle prosperous for business. Why? It’s simply a matter of self-preservation. Speaker Boehner got a rude awakening to the realities of being a political leader in this recent crisis: phone lines, email inboxes, and chat rooms jam-packed full of angry people. WELCOME TO THE BIG STAGE JOHN! Do those spot lights feel warm yet?

Republicans in the House and Senate (mostly Senate) sand-bagged the country, obstructing every conceivable piece of legislation in order to drive the economy into a hole prior to the 2010 elections. The problem now of course, is that they now OWN the economic problems of the country. THEY control the House of Representatives, the drivers of spending. They OWN the resulting economic malaise the United States is in (facing a sure recession in 2nd half of the year if nothing is done to boost business).

What Makes Me Optimistic about H2 2011 and 2012?

As the above paragraph suggests, the political climate is favorable for business, even though at present the economic climate is not. Political leaders (specifically the delusional Republican House members) unequivocally understand that The People blame THEM for the lack of economic progress, and NOT President Obama.

That said, there are still a few smart leaders remaining in Congress. Senator McCain appears to back to being the maverick many of us wished had run in 2008. Sadly Ron Paul is quitting Congress to run for President: he will lose, and we’ll lose the one Congressman willing to stand up to the Federal Reserve. Unfortunately, the last couple of election cycles have wiped out many sensible, intelligent leaders. We have far too many Michelle Bachmanns and John Kyles “gracing” the halls of Congress with their gross lack of understanding of history, economics, monetary policy, and finance.

Potential Stumbling Blocks for 2012

I can sum up the potential stumbling blocks for business and the economy in two words: Harry Reid. If ever there was a more incompetent President of the Senate I will eat my hat. I used to loathe Tip O’neil but now I long for the days when he had the gavel. At least that man could make a reasonable deal from time to time. Reid spends his days getting drawn into inconsequential battles of process that waste the country’s time – rather than focusing on substantive issues, such as what needs to be done expediently to move the economy and country forward. If anyone can screw up the current favorable political environment for business, it’s Harry Reid.

That said, I still expect Reid to fall in line with President Obama (like his predessessor Democratic President Clinton, a pragmatist), and get some legislation passed. Once this debt ceiling bill is passed and signed, I am very confident the 12 congressmen will work quickly to finish the second stage of the limit increase to avoid across the board cuts (most of which are likely already agreed to – just not enough time to finish before default). Once we’re through that, it is very unlikely we’ll see anything of substance leading to the election. Both parties leadership have skin in the game to lose if the economy tanks: Republicans can (and may still) lose the House. Democrats could lose the Senate (but won’t lose the White House). There you have it: if the economy tanks, the House goes Democrat. The Senate goes Republican, and we try again in the next 4 years. The unassailable truth is (and Speaker Boehner knows it for sure after this round of battle with President Obama) that The People want the President’s way, not the Tea Party way. When push comes to shove, The People back President Obama, NOT John Boehner.

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About S Wise

I teach others about the various uses of binary options as part of an options trading strategy. Learn to make money trading options and increase the performance of your portfolio without inducing excessive risk.
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