How Bad Obanomics Could be Good for You

Take a look at the stock market’s reactions to Obama’s re-election – … negative.

With all the political rhetoric, yet most no one, not excluding Obama, could fake a speech about the economy without making novice mistakes. With all the talks of ‘hope’, it seemed a word that excluded the talks on the economy, in Obama’s dictionary.

Before stockbrokers have another bad day, let’s just say that there could be hope at the end of the tunnel. How? Does one draw something out of nothing, with an economic policy of nada, or a complete blank? Well, seemingly so, but in case you have not misread any economic modeling or data, it’s a better outcome than if Romney, seemingly more savvy in that field, is elected.

Please explain that. Sure. It has to do with the recognition that the current economy is in recovery phase, not a standstill, that would be unacceptable, or an expansion. Being in recovery, Obama’s re-election provides predictability in the institutional structure, by which businesses can choose to ignore or embrace, but either way, they would know how to proceed with expanding the business.

When the economy is in recovery phase, what is worse than a bad regime is unpredictability, or, a new regime. With unpredictability comes uncertainly. In an uncertain political environment, more likely than not businesses refrain from making investment decisions, but take the stand to ‘wait and see’. While they are waiting, no jobs are created and opportunities are lost. Some costs to businesses and the public also would certainly go into ‘adjusting’ or ‘realignment’ with the new processes, in which case nothing productive really is accomplished or done, it’s only busy-work.

With a predicable political environment, businesses can better make plans, based on what they have set up to adapt to, with minor changes, less costs would be ‘wasted’ on realigning again, and plans can be made.

Obama may not have to do anything more than simply keep the political agenda he had propelled or promised 4 years ago, and provide a stable political environment. That itself would be preferred than uncertainty, including overturn of social values, that Romney had wanted. The market is not going to be exuberant, we know that, but what’s the harm of focusing on the fundamentals, rather than the value from day to day of a piece of paper.

So there is still hope, though it definitely would’ve been better if Immigration Reform, Healthcare, BabyBoom Retirement and social security fund shortage, Fiscal cliff, Postal Service Fiscal crisis, and others, could be addressed as well.

Article by Chris

Chris has written 34 awesome articles.

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