Photo: Bloomberg TV
President Barack Obama and republican hopeful Mitt Romney are butting heads on the economy leading up to the election.Many expect the outcome of November’s elections to have a major impact on the direction of the U.S. economy.
But Barry Ritholtz CEO of Fusion IQ appeared on Bloomberg TV saying unless some political figure “really messes up,” politics have little impact on the economy:
“The impact of politics on the economy, except when people really mess up, is overrated. 1980 is a great example. You were in year 15 of a 16 year bear market, and by the time 1982 rolls around …now no doubt some of the policies that were put into effect by a Republican president working with a democratic Congress had a significant impact – major tax cuts, major shift in philosophy – but the sentiment follows the fundamental improvement.
I’m not a big believer in the sentiment fairy as many people have termed it. And I also think that it’s hard to imagine that there’s manoeuvring room for whoever gets elected regardless of the constitution of the House Senate and who occupies the White House.
If you really believe we have a fiscal problem and I know a lot of deficit peacocks suddenly have discovered that over past three of four years when they voted for all these huge budget busters. I don’t see how, lets assume we get a full blown throw the bums out all new House senate, occupant of the White House, republicans across the board, I don’t see how anyone can rationalize another trillion dollars in tax cuts. You know the loopholes and the spending cuts just never seems to happen. Everybody who runs for office on either side of the aisle, says here’s how we’ll do it. It just doesn’t happen.”
Meanwhile, Gluskin Sheff economist David Rosenberg who was also a guest on the show said he is seeing changes at a grass root level and that looking back people will see this election as an inflection point like the Reagan Revolution of the 1980s.
Watch the entire interview at Bloomberg TV: