The election we have all been anticipating culminated on Tuesday with a win by President Obama. He won both the popular vote and the Electoral College vote. Overall, it seemed an election for incumbents, with the Presidency, Senate, and House of Representatives all largely unchanged since the midterm elections of 2010. Democrats kept a majority in the Senate, while Republicans retained their majority in the House.
What did Voting Look Like?
Obama’s 2012 victory was much closer than that of 2008. And there is no doubt that it is this kind of election that directs attention toward the historical and somewhat controversial body that is the Electoral College.
As viewers watched reporting from voting booths throughout the night, it seemed that the popular vote began the night incredibly split, and ended the race almost just as close. The nationwide popular vote resulted in Obama taking about 50%, and Romney taking about 49%. However, with the Electoral College system, Obama had a much larger lead (Obama finished with 303 electoral votes, compared to Romney’s 206).
In this election, Obama definitely lost some of the margins that he had among groups of voters in 2008, particularly younger voters, black voters, and Jewish voters. However, he was able to increase his margins among Hispanic and Asian voters, the first of which is believed by many to be an incredibly important demographic from which to garner support in order to be able to win elections in the US. In the 2012 election, Obama was able to keep his support among female voters. However, having struggled with votes from white males in 2008, his share of this demographic was even less this time around.
Nearly the complete opposite to such statistics were those of Mitt Romney’s voters. He held a staunch coalition of white voters, male voters, older voters, high income voters, evangelical voters, and voters from suburban and rural counties.
The Hoopla is Over… Now What?
It’s back to the grind almost immediately for President Obama, who still faces all of the issues that were at hand prior to yesterday’s election: a struggling economy, suffering unemployment, and a looming Fiscal Cliff.
We now anxiously await developments, or possibly lack there of, from a still divided Congress that now has less than two months to act, in order to avoid the Fiscal Cliff and agree on some kind of long-lasting budget deal.
It seems it will be very necessary for Obama to concede some ground over the Bush tax cuts, or else Republicans will be unwavering in their opposition of tax raises. The thought is that if Obama is looking to reach a decision on the Fiscal Cliff, he can no longer be so staunch about the $250,000 level for the tax cuts, because giving up a little will likely cause some Republicans in the Senate (enough to sway Republicans in the House of Representatives) to also give up their staunch position in favor of a compromise.
It is also true that no matter what resolution we see to the Fiscal Cliff issue, economists are estimating a near 1.5% cut to GDP, due to any combination of spending and tax cuts that we’ll see in 2013.
The Election Results and Howe & Rusling
We are not rushing to make any drastic changes in our portfolios today, although with the mystery of who our next President would be now uncovered, we are hunkering down and researching what we believe the likely implications will be, if any, on different sectors and markets.
For now, our long term forecast remains the same, with another tough year for our domestic economy, but still growing nonetheless. We, like you, presumably, are also nervous about our own domestic politics and the crippling effects that stalemate and gridlock can have on investors globally. However, especially now that the election has been decided, we are looking to our President and Congress, confident that some decisive action will be taken before the end of the year.
© 2017 Howe and Rusling, Inc.