Today is Election Day. The overall consensus is that we will end the day with some type of divided government, but polling data has generated significantly incorrect forecasts in the past. (2016 famously did not go the way voting analysts expected it would.) From an investors point of view, a divided government typically means slower progress towards any specific agenda, especially since coordination between the various houses of Congress and the White House in our currently undivided system still has faced preventable friction.
More pointedly, the impact of state and federal government policy is sometimes overstated. It’s easy to point to a law and measure its direct impact, but it is harder to identify the long term, fundamental trends (e.g. – the proportion of wages to inflation, international trading agreements, automation) which have a deeper, broader, but nebulous influence on the lives within the global marketplace.
So – just for a moment – we’re going to ignore the economic and investment impact of Election Day. Yes, it matters; everything matters. But the US midterms don’t matter as much as some news sources might like you to believe. Instead, let’s acknowledge a different notion: for many people, voting is the most potent force for expressing their will and enabling change they’ve got. No fancy messages, funny stories, or pithy comments are needed to underline that fact.
See you at the polls today!