Six Truths about Washington—Regardless of Who Wins
Both Congress and the White House are up for grabs in 2016, but when the dust settles and the votes are counted, six truths will remain, regardless of the election’s outcome. The names of the key players may change next fall, but these truths will not.
1. Gridlock doesn’t mean nothing gets done.
The volume of legislation that can get passed will be lessened if the president doesn’t have a majority in the House of Representatives and a filibuster-proof majority in the Senate. Still, gridlock doesn’t mean inaction. Consider, as an example, the progress made on reducing the federal budget deficit during a period of notorious Washington gridlock associated with the Budget Control Act of 2011.
2. Changes in Washington don’t typically come all at once, but in increments.
With few exceptions, the United States changes policy in small steps. Consider the examples that have been debated for decades, but seen few major changes: energy, transportation, tax and immigration policy. But in each of these areas, we’ve made a series of small changes that many could argue have led to progress.
3. Campaign rhetoric doesn’t always influence what happens during a president’s tenure.
7Source: U.S. Energy Information Administration.
Conclusion: Any assumption a Democratic administration would have been unfriendly to the petroleum industry proved irrelevant because of economic forces at work during the president’s time in office.
4. Consumers and businesses have a far greater impact on the economy than the government.
The overwhelming majority of what happens in the U.S. economy depends on you, me and the businesses we work for and patronize.
8Source: Bureau of Economic Analysis
5. The state of the economy influences who is president, not vice versa.
Decades of history prove that the state of the economy determines the president, not the other way around. In fact, the economy’s impact on elections can be stated in a fairly simple equation: Strong economy (declining employment and inflation) = a win for the incumbent party candidate.
Sources: Bloomberg, OppenheimerFunds. As of 12/31/14. Past performance does not guarantee future results.
6. The stock market doesn’t care if the public is happy with who is president.
Finally, one lingering fear investors may have is that the markets could suffer if the public elects a president who becomes unpopular while in office. But history suggests the market is resilient and indifferent to a president’s current approval rate.