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Be Careful What You Wish For
There is an old saying that goes, "Be careful of what you wish for, because it may come true." Thus, there is some irony in this "day after;" all those people who may have thought gridlock was the best idea may be getting their wish and in some cases, I'll bet they are having second thoughts.
We all know what gridlock is in traffic. That's where you're just stuck because of an accident or a malfunctioning traffic light, whatever, and you can't go forward or back and time just keeps moving on. When applied to Washington, gridlock implies perhaps a Republican president, and at least a Democrat-controlled House or Senate, so that they tend to cancel each other out, neutralize each other, as it were, and get little to nothing accomplished.
The reason? A lot of people would like Washington to accomplish next to nothing. They think that all the so-called help we get from Washington would be better left undone. What we're probably set up here for in the next four years is a good deal of compromising. And that's okay as long as, ultimately, they do compromise.
And, by the way, let's not fall too much in love with third parties. Third parties have served a valuable function in this country because they basically nudge the major parties in one direction or another when need be. But, remember the ultimate experience of third parties in, for example, Europe, where nothing gets done on a permanent basis because it isn't about a third party after all, it's about a fifth and tenth and a twentieth party. They come up with convoluted coalitions and nothing, but nothing, gets done. Now, I'm no big fan of Washington D.C., but I'm not sure that "nothing" is what I really want, and when you wish for and get gridlock, and wish for stronger multiple third parties, well, as we said, be careful what you wish for, because it may come true.
But with all the endless politics involved, standing ABOVE the crowd is, who else but Federal Reserve Board Chairman Alan Greenspan. I am sure he is watching the politics and psychology of it all very closely. I wouldn't be surprised to see a signal soon from the Fed that Mr. Greenspan is still "at the controls" and willing to do whatever is necessary down the road to keep the economy going smoothly over the next few months, into next year.
The economy is clearly slowing and is probably going to need some help in the next couple of months anyway. A sign from the Fed would be a way of reassuring everyone that after the all politics are done, the economy will still be okay. The Feds next meeting is December 19th. I would not totally rule out a cut of a quarter of a point in interest rates as a "shock therapy" for the economy and the markets. The timing of it, i.e., December 19th, would certainly make a great "Christmas present" from the Fed Chairman.
All this is not so farfetched. Alan Greenspan, you'll recall, was the guy who quickly moved (and quicker than the so-called experts expected) on the Asian crisis, the Russian meltdown and last year's supposed Y2K problems. Now Mr. Greenspan has something of a crisis in his own back yard.
Don't get me wrong; the economy is still basically fine, but it cannot be ignored. Consumer confidence is very important and consumer spending accounts for about 2/3 of all Gross Domestic Product. Certainly, Mr. Greenspan fully understands that dynamic and could well decide to do a little "handholding" of his own. Obviously, at a sensitive moment like this, we could not afford to let the economy "lose its groove," and there is probably no one who understands that better than Alan Greenspan. In short, for the next four years, the watchwords should probably be, "In Greenspan We Trust."
(Tom Butenhoff is a First Vice President with J. E. Liss and Company, Inc.
in Milwaukee. The views are his, and not necessarily those of Liss
Financial Services or the Job Connection/Hiring
Network.)