WASHINGTON, Nov. 1 (UPI) -- Few things rattle Wall Street more than uncertainties, so a decisive presidential election result by Wednesday morning, regardless of who wins, would make investors happiest.
But it's clear that a larger part of Wall Street would prefer a Republican victory, as most large-scale investors have not only been largely satisfied with President Bush's economic performance over the past four years, but they expect the performance outlook to continue to improve in coming months under his administration.
Certainly, Bush's tax cuts, coupled with the fact that the Federal Reserve kept interest rates at a record low for nearly two years, helped bolster an economy that was at risk of facing a long recession.
"All in all, the past 15 months have been spectacular on the economic front. Especially when we consider the tremendous hurdles of terrorism, corporate scandals, and war, which the economy has been forced to deal with," said Brian Wesbury, chief economist at Chicago investors Griffin, Kubik, Stephens & Thomspon.
Certainly, even as presidential candidate John Kerry insists on supporting "middle America" and creating more jobs, it's clear that as a whole, the U.S. economy isn't doing all that bad. Third quarter GDP came in at 3.7 percent, which is almost at what many economists consider a sustainable rate of growth, often pegged around 4 percent. The jobless rate, meanwhile, has been consistently below 5 percent for the past year, while the stock market has been relatively steady, albeit somewhat anemic, often breaking the psychologically critical 10,000-mark.
Such is the overview by former New York Federal Reserve Bank economist and current chief economist of Advisors Financial of Paramus, New Jersey, Charles Lieberman.
"Despite the surge in oil prices and its absorption of disposable income, economic growth remains quite solid...corporate profits are strong, so capital investment should continue to do well. Similarly, household outlays remain on the rise," Lieberman said, adding that the biggest threat to economic growth going forward remains terrorism.
Those views have been echoed by major businesses as well, from the U.S. Chamber of Commerce to the National Association of Manufacturers endorsing Bush over Kerry, as they fear that a Democratic administration would introduce a tax system less favorable to entrepreneurs as well as investors. Not only that, the inherent skepticism about Democrats among the business community continues to prevail, as they are seen to be more pro-union and pro-environment, which may cut back on the bottom line for many businesses. Moreover, there is fear that Kerry might introduce legislation that goes against free trade, or at least take away some of the advantages U.S. companies currently have when doing business overseas.
Whether or not those concerns are justified or not, one thing is clear: Wall Street and big business is not speaking in one voice in this election. In fact, some of the country's top business leaders have gone out of their way to support the Kerry campaign, including billionaire hedge fund manager-turned-philanthropist George Soros.
Through contributing over $2.5 million to MoveOn.org, a liberal advocacy group, Soros has become a key financer of the Democrats' campaign efforts. But his anti-Bush stance comes less from an economic perspective, but more from animosity towards the president's foreign policy, particularly over Iraq.
"I have devoted half my fortune and most of my energies in the last 15 years to promoting the values of democracy and open society...after 9/11 I came to feel that those principles need to be defended at home," said Soros recently. "The war in Iraq was misconceived from start to finish -- if it has a finish," he added.
But other multi-billionaires have been critical of the Bush administration's economic as much as political policies too, including the world's second-richest man Warren Buffet. The chairman of investors group Berkshire Hathaway has been particularly scathing towards Bush's tax cuts, as he told investors earlier this year that, "tax breaks for corporations (and their investors, particularly large ones), were a major part of the administration's 2002 and 2003 initiatives...if class warfare is being waged in America, my class is clearly winning."
Buffett has been equally scathing about the crackdown on corporate malfeasance and corporate greed in general.
"If corporate America is serious about reforming itself, CEO pay remains the acid test...the results aren't encouraging," adding that current conditions were inducing an "epidemic of greed."
Still, for financial markets, the one of the most closely-watched gauges after the elections will be the New York markets on opening bell Wednesday. A worst-case scenario will be a repeat of the 2000 elections, when markets struggled to find their way for a month and reached their lowest point for the year during that time as the nation wondered who the president would be.
A repeat of that would certainly do nothing to boost investor confidence, and Wall Street will be united Tuesday in hoping for a decisive victory, either way.
