Sept. 28, 2016

Presidential Debate as Spectator Sport

As a fan of politics, my sense of anticipation about Monday’s presidential debate was something akin to a Super Bowl. We gathered around the big screen with plenty of beer and snacks and prepared to revel in the replays of violent verbal collisions. The concussions were metaphorical, of course, but no less exciting. Presidential debates are spectator sport, as much entertainment as infomercial. Both sides were going to declare victory afterwards, regardless of their performance. All but a very small percentage of viewers had already made up their minds and were going to stick with their candidate no matter what. So what’s the point? Not much, at least as far as the economy is concerned.

“Go ahead and vote, but it’s meaningless,” joked economist Alan Beaulieu of ITR Economics, who spoke at the recent Steel Market Update conference in Atlanta. “The forecast for 2017 is not going to change if Mrs. Clinton is elected or if Mr. Trump is elected. It makes no difference.” All new presidents want to change the world, but they are limited by time and partisanship. Economic growth is more about the law of supply and demand than any law posited by a politician. “Obviously, the president matters in many areas, but not to the economy,” said Beaulieu, who foresees a healthy U.S. economy next year, and a healthier global economy, regardless of the election’s outcome.

Economist Diane Swonk, speaking at MSCI’s recent Forecast 2017 Summit, wondered about the level of voter turnout in November, considering both candidates are so unpopular. Which candidate would benefit more from short lines at the polls is open to speculation. It’s possible the economy could see a post-election bump, she said, as businesses and investors breathe a collective sigh of relief and look ahead to 2017. Both candidates have vowed to improve the nation’s aging infrastructure as a means to create jobs. Both have vowed to fight terrorism and make Americans safer. That will take money and support from congressional leaders on both sides of the aisle. Swonk hopes for more bipartisanship in Congress after the election and expects spending to increase. “Austerity is out,” she said.

Some Canadians are more concerned about the outcome of the election than Americans. The Canadian economy is highly dependent on the sale of goods to the United States. The candidates’ opposing views on trade and agreements such as NAFTA could conceivably impact Canadian exports to the U.S., depending on which presidential administration is ultimately in charge, said Michael Holden, chief economist for the Canadian Manufacturers and Exporters Association, at MSCI’s forecast summit. “Will rhetoric during an election result in action afterward? Usually not, but this time may be different.”


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Thursday, December 14, 2017