The Fiscal Cliff and the Nerves of Democrats
Election expectations for this year have been upended by the past week's poor employment numbers, as well as the defeat for Democrat-leaning public employee unions -- but I'd argue that President Obama still has a slight advantage. At the same time, Republicans' impressive demonstration of fundraising and get-out-the-vote strengths in Wisconsin may be more important in determining Senate control, as it seems newly clear that retiring Sen. Herb Kohl's (D-WI) open seat could be vulnerable. That said, the notion of an investor-friendly GOP takeover has already been widely expected.
What's most significant, perhaps, is that we could now see a less-harrowing year-end fight over the Bush tax cuts and other fiscal policy "cliffhangers" that threaten to roil investors as early as the third quarter. That is the least-heralded plus from these early-June happenings. In essence, the bad news on the economy, and the surprising returns from Wisconsin, could deter Democrats from further signaling that a post-November game of chicken might be in their interest. In the near term, for the financial markets, the prospect of an averted fiscal cliff would be worth a great deal....943 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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