In some ways, we’ve witnessed a historic election. The margin of victory in the House for Republicans hasn’t been seen since Roosevelt’s time, after all. But in a very important way we saw nothing but business as usual. For the last three elections, US voters have turned out the party in power. We’re never happy with our leadership these days, and for good reason. Congressional popularity has been traditionally below 25% and the public sees Congress as the most contemptible branch of government. But we elected them, after all.
The question now is how this will play for the US economy and for tech. Specific party politics toward technology are, in my view, a minimal factor in this election because Congress isn’t any more likely now to pass tech-specific legislation like net neutrality than before—likely, they’re less likely. Tech will be swept along by the economic forces.
Where will those forces sweep us? It’s too early to say because of the split within the Republican Party that the Tea Party activists represent. We’ve had conservative groups grab headlines within the Republican ranks before; Gingrich’s over-reaching of conservative power in the ‘90s is a potential poster-child for what might happen now. Will activists compromise to pass legislation or will both parties do their usual political showboating?
On the positive side, Republicans are often seen by businesses themselves as being pro-business, and thus it’s possible that business may be more willing to invest and expand under a Republican House, but the House doesn’t change even Congress much less government. On the negative side, conservative activism on the budget could cripple any economic recovery. Attempts to repeal health care and financial reform, both promised by at least some Tea Partiers, would create gridlock for no likely gain. But mainstream Republican leadership knows that. In short, we don’t know yet how this will fall.
The Fed today will likely announce steps for quantitative easing, the purchase of old assets with “new money” to boost the money supply. The question is how they’ll do it, and whether it will work. Ultimately consumers have to start believing again. This election isn’t going to make that happen; it was a vote against something rather than a vote for it, and that’s been the case for the last three elections, as I’ve noted. The moderate center of America doesn’t want left- or right-wing ideology, but the parties are controlled by ideologues. We have no candidates of our own kind to vote for, and that’s plenty of reason to be in a funk, unemployment notwithstanding.
In December I expect I’ll be able to run the model on the economic and technology future and get some numbers; in the meantime it will be watchful waiting here at CIMI as with all of the rest of you.