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What Did We Learn Last Night in NY, NJ, and VA?

Posted by Larry Doyle on November 4, 2009 8:30 AM |

Off year elections are always interesting in terms of getting a pulse on the American public. Yesterday’s elections, with the primary focus on the gubernatorial elections in VA and NJ, the mayoral race in NYC, and the Congressional race in upstate NY, strike me as having some similar themes. What were they?

1. A rising tide of discontent with incumbents.

I sense that not only in the NJ gubernatorial election but primarily in the mayoral race in NYC. Michael Bloomberg spent over $100 million, was estimated to hold close to a 20 point lead, and won by only 5 points.

I definitely sense this anti-incumbent discontent in Connecticut, as well. Both Senators Dodd and Lieberman are under real pressure.

2. An inability of the Obama administration to turn out the vote that brought him to Washington. 

Which segment of the electorate is that? Younger voters and minorities. Their numbers were down considerably, especially in VA, and it showed in the results as the Republican candidate McDonnell routed the Democrat, Creigh Deeds.

The White House would spin yesterday’s results, and especially the VA race, as not being a referendum on Obama. That said, if the Dems can’t turn out a major part of their base, the shift in sentiment by the moderates and Independent voters could spell doomsday for blue-dog Democrats (Democrats elected from typically Republican states) a year from now.

3. Americans are tired of the business as usual politics.

This theme is a twist on point 1 above about a growing tide of anti-incumbent sentiment. I sense this dynamic from the results of the Congressional race in upstate New York. In this race, the Republican party railroaded their candidate Dede Scozzafava out of the race and replaced her with a strong conservative Doug Hoffman. The Republicans had held this Congressional seat for decades. The fact that Scozzafava crossed party lines and supported the Democratic candidate did not help, but I view these results as a repudiation of the ‘business as usual’ politics that has polluted our country.

Add it all up and what does it mean?

America wants to be governed from the center. If politics in Washington and in the state capitols did not get that message last evening, then they were not listening.

What does this mean for the markets? Well, typically markets prefer fiscal discipline. That said, the markets – primarily equities and commodities – are “bubblicious” right now given all of the liquidity provided by Uncle Sam. On the margin, though, I think the markets will receive last night’s news in a generally positive light. Why? Our federal government is currently dominated by the liberal agenda of the Obama administration and supported by House Speaker Pelosi and Senate leader Reid. America is telling them to lean more toward the center.

Clinton heard this same message in 1994 when the off year elections went strongly Republican. Will the Democrats hear this message? Will they act on it? I doubt it.

What do you think?

LD

  • whoisjohngalt

    Larry, I think you are right except the “I doubt it”. The so called Blue Dog Democrats will not follow the liberal leadership anymore. In fact, I think Harry Reid will now become less liberal.

    As for Cap & Trade, this should now be dead. As for Health Care Reform, the current proposals have no chance. May be a more sensible bi-partisan bill with tort reform will be proposed.

    Jobs and the economy will take center stage. Obama is a socialist and this does not create investment & jobs in the private sector. We are back to my favorite book:

    http://atlasshrugged.com/

    If the country will put producers (people that make things, not Wall Street money managers) in charge, then the USA will come back. Otherwise, Atlas Shrugged.

    • Larry Doyle

      whoisjohngalt…The question posed will certainly dominate the political debate for the next year. I should have been more specific in my question. I was thinking of the Democratic power base (Pelosi, Reid, Obama). I sense real conflict for Obama. I think he is smart enough to know that unless he moves toward the middle he may be a one term president. I don’t think Reid and especially Pelosi can help themselves.






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