A political bombshell exploded in the US last night. While the largest impact is on Democrats, there were clear warning shots fired at GOP nabobs.
New York Mayor Michael Bloomberg spent over $100 million to retain his office; but he only procured 51% of the votes. Polls gave Mike a 12 to 16pt lead…RINOs & incumbents are endangered species.
In New York Congressional District 23, imperialistic state GOP leaders decided to disenfranchise party regulars by eschewing a primary and slating leftist candidate Dede Scozzafava. The district leans to the right, so conservatives and independents rallied behind obscure candidate Conservative candidate Doug Hoffman. The GOP candidate, supported by GOP House leaders, trailed so badly in the polls that she left the race last week and threw her support to moderate Democrat Bill Owens, who won the race with 49%. Independent candidate Hoffman got 45%; GOP candidate Scozzafava got only 6%.
GOP candidates won both the Virginia, which was expected, and New Jersey Gubernatorial races.
In Virginia, a state handily won by Obama just one year ago, GOP candidate McDonnell won by 18%. In heavily Democratic New Jersey, a state that Obama won by 15 points, flawed GOP candidate Chris Christie defeated incumbent Gov. Jon Corzine, a former Goldman Sachs chief, by 5%.
Exit polling and focus groups overwhelming called ‘jobs’ the most important issue in the races. In New Jersey, property taxes were issue #2.
Tuesday’s results are a clear refutation of big government, big spending, big borrowing, TARP, crony-capitalist bailouts, more socialism, etc.
Voters do not believe that current or proposed big government solutions will create jobs. You can blame Ron Reagan for this…Can you imagine the pressure on BLS to craft a better-than-reality NFP number?
ObamaCare in its present form is DOA because Blue Dog Democrats, and something like 49 House Democrats represent districts that voted for McCain, will run from big government programs.
Resuscitating the US economy with jobs is now ‘Job 1’ for US politicians. Everything else is #2.
Pundits often assert that ‘voter turnout’ is the key to an election. Astute pundits note that ‘voter intensity’ determines election. Pocketbook issues almost always determine elections. So those that depend on the government for a check, whether an entitlement or a public sector position, will turn out to vote.
When those on the other side of the ledger get upset, their pocketbook motivation compels them to vote. The US by all research is a center-moderately right nation. When the populace gets upset, the US either turns a tad left, like in 1976, 1992, and 2008, or moderately right.
We have averred that ‘The Bottom’ might appear in Q2 or Q3 2010 and a move to the right for the 2010 would be a major factor in the process.
SPZs are four handles higher in overnight trading. BUT it is too early to determine how Team Obama and Pelosi-Reed will react. If Team Obama and Pelosi-Reid promote more big-government solutions to the economic and employment problems, buh-bye dollar and hello inflationary recession or worse.
If Reaganesque solutions are applied, there will be an excruciating purgative process that will greatly damage stocks but help the dollar and bonds…Don’t bet the ranch just yet on either direction.