As the clock counts down to election day, it is worth considering the effects on the marketplace of a political campaign and election.
Politics and the marketplace are inextricably linked by, among others, two words: uncertainty and perception.
In the business world as in everyday life, perception is everything. We only have to look to the up and downs of the stock market and oil prices to see the power of perception. Uncertainty and negative perceptions about domestic and geopolitics can erode confidence and trickle down from investors to consumers even without any landmark event.
Regardless of voters’ political preferences, a campaign can raise doubts and worries about income taxes, the cost of healthcare, medical insurance, Social Security, the national debt and whether or not politicians can work in a bipartisan manner to improve the confidence of consumers and business owners.
What is the post-election forecast for the economy? I depends upon who you ask. Heading into the busiest retail season of the year, it will be difficult to extract precise data from economic indexes to figure out exactly what kind of impact the elections and the politics of the next four years will have on the marketplace.
Certain consumer goods are a necessity, and discretionary spending typically picks up at this time of year.
In the meantime, businesses are trying not only to maintain clients in what has been a very fragile economy, but also grow their customer base. Some may have put off decisions on major capital investments and hiring until the political landscape becomes clearer.
In the final analysis, businesses that are understaffed will have to fill vacant positions in order to thrive.
History teaches us that there may not be any clear answers to the open questions debated in an election campaign any time soon. However, perceptions and uncertainty often change once the ballots are counted.
Whether voters like the outcome or not, there will be some closure for the next several years.