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$2-Billion Election Essentially Changed Nothing

To the relief of many Americans, the election is now over. I find it ironic that the election turned out to be a lot like stimulus spending – despite record cash outlays, very little changed in the end.

 The nation remains deeply divided with the electorate split nearly 50/50 and the House and Senate remaining in the same hands as before the election. The election also ended with very little hope for an end to the gridlock in Congress, and no convincing mandate for the victors.

The pundits were almost universal in their analysis of the election. There was amazement and admiration that Obama was able to prevail after presiding over the poorest economic performance since the Great Depression. His first term’s hallmark achievement, the “Affordable Health Care Act,” remains hugely unpopular. And surveys show the overwhelming majority of Americans feel the country is on the wrong track.

Another Perspective: What Obama Win Means For Agriculture

The exit polls were surprising. With all the money and advertising spent in the run-up to Nov. 6, as many as 9% of the electorate said they didn’t decide on their presidential ballot choice until three days prior to the election. What’s more, 42% of voters said Obama’s handling of Hurricane Sandy was an important factor in their decision.

Exit polls indicated that 60% of voters considered the economy the most important issue and actually preferred Romney to deal with the majority of the issues they thought were important. Exit polls even indicated that voters thought government is too big.

Nonetheless, North Carolina is the only one of nine toss-up states that Obama lost. His victory has been attributed to two things – his likability and the efficiency of his campaign. More than 80% of voters viewed Obama favorably, while only 43% felt the same about Romney. Thus, with all the billions spent in this election, in the end it wasn’t decided on policy, but likability.

Finally, Obama did more than just raise more money than any candidate in history. He also left his 2008 campaign offices open in the key battleground states, effectively running one of the best campaigns ever, a campaign that began in 2008. The consensus is that Obama’s campaign was first rate and was run by a better team.

I have a hard time believing it, but many experts say Hurricane Sandy allowed Obama to look presidential and was the event that tipped the scales in his favor. What I find astounding is that, for the first time ever, exit polls showed that a sitting president was not held accountable for the country’s economic performance of his first term. Rather, 53% of voters polled blamed Bush for the past four years, and only 38% blamed Obama. 

The result of the 2012 election leaves a nation sharply divided among racial and ideological lines; that’s not a set of circumstances conducive to compromise. 

Now let’s look at what the election means for the cattle industry. The obvious answer is “more of the same,” except that there are tremendous issues that must be addressed.

  • The federal deficit, already at $16 trillion, continues to grow, and the federal borrowing limit is about to be hit once again.
  • The “fiscal cliff” compromise that Congress set in lieu of a real budget-cutting plan, is about to be reached. Some kind of deal will have to be struck before drastic across-the-board cuts go into effect.
  • The Bush-era tax credits are also due to expire.
  • These issues don’t even begin to broach the myriad of steps needed to address the most anemic economic climate in more than a half-century, or the impending showdown over Iran’s nuclear program. Then there’s entitlement reform.

These are all huge issues that are expected to dominate the agenda. Ag won’t be on the national agenda, but the environmental and regulatory fronts will continue to be active. Ironically, the continued lack of economic growth will be both a positive and negative for the industry. It will be a negative in terms of demand, which will limit price increases; and a positive in that we will continue to see a flight into commodities and away from equities. We’ll likely also see strong export growth, as the value of the U.S. dollar declines. I would add, however, that a decline in the value of the U.S. dollar isn’t guaranteed in the short term as it’s been propped up by the demise of the socialist European states. 

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