News and views from the award-winning author of the novels The Skinny Years, America Libre, House Divided and Pancho Land

Tuesday, September 18, 2012

Wall Street insider: "The private sector is fine"

An online ad for a Wall Street investment counselor I saw today offered a report predicting the effects of the presidential election on the economy. Intrigued, I downloaded the report.

Here is what the firm had to say regarding the current state of the U.S. economy:

The negative emphasis can be even more pronounced in an election year as the out-of-power party has every incentive to say the economy is terrible--even when it's not. And the in-power party doesn't want to contradict them too vehemently and seem out of touch. Recently, President Obama was excoriated by the press, the opposition and even members of his own party for saying the private sector is doing "fine." Later, he walked the comments back. (This is what's known as a "Washington gaffe"--when a politician accidentally says something he means.) The private section is indeed fine--but that's not politically expedient rhetoric.* 

The investment firm's forecast is not an economic Armageddon should the Democrats retain the White House.

Either outcome--a re-elected Democrat or newly elected Republican--has yielded strongly positive market returns on average in past election years.   

Make no mistake, this firm wants to sell stocks to investors. So their motives are suspect. However, it is also clear that the motives of the opposition party are equally biased when they paint an overly negative picture of the economy.

Raul Ramos y Sanchez

*Copyright 2012 Fisher Investments. Used under Fair Use laws.