The case for post-election optimism
One of the best post-election comments I’ve heard came from my father, whom I affectionately call Old Lloyd.
When we talked this morning, dad said, “I think Obama has learned from some of his trials.”
Part of what I like is that dad used the word thinks, not hopes. Old Lloyd is an optimist; how else do you explain an 82-year-old with an iPhone and itching for an iPad.
What my dad was trying to say is that the election is over; let’s put the lessons learned from the past two years to good use.
I’d add to that the hope that with the campaigning over, the elections won’t be the distraction they have been for the last six months.
President Obama has been reelected and he can’t run again. The Republicans and Democrats remain virtually in the same positions in the House and Senate.
The question is will this make them more likely to deal, or more likely to play hardball?
There has been little to no willingness to compromise during Obama’s first term but with the elections over there is a window of opportunity to get things done.
The first lesson learned is that both sides should now know they can’t get anything done without working across the aisle. And when your country faces the issues ours does, working together is imperative.
The compromises during the lame duck session might be ugly and may not even be acknowledged by either side, but as I wrote in an earlier blog, taking the country at least a little bit over the fiscal cliff might just be a viable strategy. Letting the Bush tax cuts expire in December could result in a tax package being passed quickly in 2013 that will allow the Democrats to claim that they increased revenue, while the Republicans can argue that they didn’t raise taxes, but restored as many of the tax cuts as they could.
Meanwhile, sequestration might be the easiest problem to solve, and could be extended without expending too much political capital.
But the big caveat here is that the window for any cooperation won’t be open forever. In fact, it might be open only a few months. If nothing gets done, we’ll be in trouble.
However, if progress is made, it could lay the groundwork for future compromises.
That’s my macro view. The more micro view – what the election results mean to contractors – is a much tougher call.
With Obama winning, we won’t have the chaos of a massive transition on top of the other issues in the market. Status quo isn’t necessarily a bad thing for business. And if sequestration gets solved and a budget passed, visibility improves, so that is good.
And maybe, just maybe, a little more certainty on budgets and spending might ease the impact of low-price contracting. If agencies know what their funding is they may not be so focused only on price. We might just see a return to value.
If a long-term tax and budget blueprint is established, contractors should see a return to a more predictable market, and predictability is about all we can ask for the next few years.
Maybe that’s a little overly optimistic, but I’m my father’s son and I try to look on the bright side of life.
Posted by Nick Wakeman on Nov 07, 2012 at 7:24 PM