For the last couple of weeks, my team has asked me whether we should publicly weigh in on the election and the possible market impacts. We have had lively discussions on the election here at our offices. I am sure you and your teams have done the same.
For me, it is fascinating to note the changes in what was important to voters in 2012 versus what is important to voters in 2016. Here is a quick snapshot:
- The economy was the star of the presidential election season, with more than 9 in 10 voters ranking it as issue #1.
- Voters worried about scarce jobs, expensive gasoline and a huge federal deficit.
- Candidates proposed detailed solutions. Republican Mitt Romney’s 87-page document covered topics from “human capital policy” to “regulatory reform.” President Obama’s 27-point plan included specifics, such as a 26.25 percent tax rate for manufacturers.
- The political conversation is very different, with most of the focus on non-economic issues: Republican Donald Trump’s temperament and Democrat Hillary Clinton’s trustworthiness.
- And what voters want to hear about most in a presidential debate is keeping the US safe from terrorism.
- Of course, economic issues remain extremely important, but they are different from 2012.
- The hottest money topics involve income inequality, trade deals and immigrants.
Let’s look back at what was happening in 2012:
Jobs. The unemployment rate was a painful 8.1 percent in August, 2012. Many voters feared that as the Affordable Care Act phased in, the job market would get even worse.
Gas prices. The average price of gas in August, 2012, was $3.69 a gallon, the second highest average on record.
Federal deficit. As the fiscal year was wrapping up, the annual deficit was $1.1 trillion, or 6.7 percent of GDP.
Jobs. The unemployment rate has plunged to 4.9 percent.
Gas prices. Gas prices have tumbled this year, and now average around $2.12 a gallon.
Federal deficit. For fiscal 2016, the deficit will be $590 billion, or 3.2 percent of GDP.
Other factors also have improved greatly since 2012. For example, new home sales are back to pre-recession levels, and consumers are in much better shape, thanks to energy savings and low interest rates on mortgages, car loans and credit cards.
But while the economy is far healthier than four years ago, serious problems remain.
The next couple of months will be challenging for our country. But decisions made in November will have lasting impacts reaching into our region. Our next elected officials will be the ones who will help us achieve economic success. No matter the results of the election, change will come to the market, to the economy, and to the future path of our region and country.
And like any big decision, you need to participate in the process. Participating in the election process, and the future of our country and our region, starts with voting in November. That is how we start the election impact.