November 11, 2022
POST ELECTION: WHAT IT MEANS
The 2022 midterm elections are now over. Will the voting results have an impact on the economy and various sectors? Find out with the latest episode of TrendsTalk with ITR Economist and Speaker Lauren Saidel-Baker.
The below transcript is a literal translation of the podcast audio that has been machine generated by Rev.
Hi. I’m Lauren Saidel-Baker, and thank you so much for joining me for this episode of ITR Economics’ TrendsTalk from the road. We are recording today on Election Day, so I thought it would be very topical to discuss what these election results will mean and more importantly, what will they not mean to the economy, to various sectors, to you and your business?
Well, the quick takeaway is they actually might mean much less than you think. As you probably know by now, we at ITR Economics are nonpartisan, nonpolitical. We just don’t have a favorite political party or candidate because we find that the macro economy really doesn’t have a favorite political party or candidate. Yes, there will be specific policies, specific laws or objectives from different political parties that will influence certain sectors. They will certainly hit us all on the individual level, but do they really swing the trajectory of our economy?
Our best analysis says no. While various sectors do have different relationships to, say, something like tariffs, causing different inflation, different pricing trends in one material or one sector, the overall economy, it’s just too big. It just has too much momentum behind it for one party, one election cycle, especially something like today with just midterm elections, to really move that needle.
I like to think of our economy as a boat. Let’s say if it was a ship, it would be an aircraft carrier. It’s just so big, it doesn’t turn on a dime, so we won’t see any immediate impacts from whoever wins or loses on Tuesday. So I think that’s good news that because our economy is still sailing forward on a somewhat set trajectory, we don’t have to replan or readjust our balances for every little change in Washington.
And certainly, you can watch the news. You can drive yourselves crazy looking at the latest polls or the latest news, the latest policies, how likely they are to become passed to become actually laws. But I think we’ll just drive ourselves crazy and maybe not get the full gains of that analysis because the leading indicators are really where we see the trajectory of the economy with some forward view. So don’t drive yourselves crazy. I follow politics because it’s fun, but not because it’s materially going to change our view.
Now, that said, it’s important to know where your sector falls. If you are relatively more sensitive to something like pricing in one exact component or one exact material, then yes, it’s good to know if there could be some policy put in place that would affect your sector. But things like GDP, industrial production, they’re just too big. So I like to follow the quote by Warren Buffet. He said, “Red or blue, I can still make green.” And I think that’s great advice for all of us. Don’t drive yourself crazy following the news out of Washington. Follow your own leading indicators. See what this economy means for you and your business. And as always, please stay with us here at ITR Economics. Thanks so much for joining me today for this episode of ITR TrendsTalk. I’m Lauren Saidel-Baker. Let’s talk again soon.