Market Activity & Views

11/06/2006

Lame duck or dead duck?

Midterm elections have often been tame events in the U.S. Some have come and gone without the public taking much notice. Not this year.

Today's congressional elections have been the subject of intense campaigning and relentless media coverage. They have been fought on national rather than local themes, with Democrats focusing on the unpopular war in Iraq and Republicans stressing the need to maintain lower taxes and bolster national security.

Republican Party leader Ken Mehlman says the election "is a pivotal moment in the nation's history. I am confident we are going to keep our majority, but we ought to engage in a very serious discussion about how to do better after this election is over."

The stakes are high for Bush as he heads into the final two years of his presidency. His job-approval ratings are at about 40%, emboldening members of his own party to oppose him on issues from immigration to a Dubai company's efforts to take over the management of U.S. ports. A loss of one or both houses of Congress would weaken him further.

Should Democrats take control of the House or Senate, they would be able to hold investigations of the administration and issue subpoenas. And Bush would come under increasing pressure to make progress in Iraq or withdraw U.S. troops.

The Democrats face their own pressures. So many pollsters and pundits are predicting they will win the House that failing to do so might seriously rock the party's confidence and future.

The two political parties are at an all-time low in terms of their image, and Republicans are going to get punished more because they are in power. If somebody could adopt a different style that did not result in partisanship and paralysis, that would be wonderful. But I don't have a huge expectation that is going to happen.

The priority must be a new direction for the country. The only difference this election makes is whether Bush is a lame duck or a dead duck.

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