Ed note: We wrote this last night in the wake of Obama’s victory, but given how hectic things were, and today’s big 300 point down day, we wanted to bring it back to your attention.A quick point on a big topic that people will be talking about in the coming weeks: The Fiscal Cliff.
The conventional wisdom on the Fiscal Cliff is that Romney would have been better for it, because he’d ensure that the tax hikes wouldn’t happen.
But this is way too simplistic. The fact of the matter is that the Fiscal Cliff is really a set of liberal policy goals all kicking in at once: Tax hikes, cuts to defence spending, etc.
Had Romney won, there would have been zero incentive for smarting Dems to give Romney a deal.
Obama may also want to see tax hikes, but at least as the man in charge, he has an incentive to compromise with Republicans.
Whether Republicans compromise may seem like a different issue, but if they don’t compromise, then big tax hikes. So in the current system, both sides have the incentive to deal. This is the more bullish outcome on this issue.
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