Election twists and turns

November 2006

Election twists and turns

Voting sign. Original image at www.austinchronicle.com/.../News?oid=oid:593292

An exercise in democracy
I have an abiding interest in politics and can't resist offering some comments about the election results this month, both locally and down Washington way.
It's worth noting that our universities offer courses in Political Economy and that the inclusion of the second word implies -- and indeed confirms -- that what governments do has an undeniable impact on our financial health and not always to our betterment.
It does seem to be increasingly difficult to put labels on many of us these days. For instance, we have only to recognize that "crossing the floor" isn't too uncommon an occurrence. Switching from one side of the House to the other isn't a Canadian habit only, either. The narrow victory in Virginia went to Jim Webb, the Democrat candidate, but his background included a stint with the Reagan administration -- which was certainly not interested in worrying about the "little people."
The truth seems to be that the public good cannot safely be ignored by anyone seeking political office nowadays. Inflict too much harm on the man in the street and you're likely to fail in the polls, whether you're an incumbent or not. Thus, although concern regarding Iraq undoubtedly steered many Americans towards the Democrats, there was more than one observer who suggested that the economic pressures on a lot of households had just as much to do with it. Or, as has been said, the votes didn't so much go for the Democrats as they went against the Republicans.
To paraphrase what Winston Churchill pointed out: Democracy isn't a perfect system of government, but it's better than all the others that have been tried. And I certainly think that the US election results were a perfect example of it in practice.

But what could the repercussions be?
Here in Canada we're sensitive to the success of the US economy. When it's down, we're likely to experience some difficulties. Notably, of course, a shift in the rate of exchange makes a difference, as our hospitality industry has been at pains to point out of late.
Equally, the relationship between Ottawa and Washington, be it good or bad, plays its part. As in life, friendship has its benefits but it can also exact a price. For instance, the Canadian presence in Afghanistan isn't quite a homegrown idea, is it?
But the Democrat majorities in Congress are almost certainly going to hasten America's withdrawal from Iraq -- and by extension we seem destined to recall our own troops from a war that they also cannot win.
Tragically, democracy isn't easily imposed on countries by people from the outside. The residents have to want and be ready for it -- and there are few signs of this being the case. Indeed, articles in Time and Maclean's magazines this month present compelling and incisive arguments to this effect.
The point, though, is that a reduction in military activity -- and the resulting cut back in related jobs and orders for war supplies -- will lead to some economic upheaval. It won't all happen quickly, of course, but the outcome is all but inevitable.

Meanwhile, back on the home front ...
Our local elections have focused on concerns of a more immediately domestic nature. However, the economy is much at the centre of them. There's a widespread interest in reducing taxes and some anger about development projects that don't sit well with their next-door neighbours.
Municipal candidates aren't easily -- if at all -- categorized by their political stripe. In fact, a great many of them seem to say the same thing (!) and voters are left to choose the man/woman who's most likely to bring sense/commonsense to council deliberations.
Nevertheless, the erstwhile download of services by Ontario's provincial government -- which Premier McGuinty (and I think justifiably) argues began with federal exercises in balancing the budget -- has led to some inequities that Niagara residents aren't at all happy about.
However, the solutions -- as Pierre Elliott Trudeau pointed out many years ago -- lie in robbing Peter to pay Paul and the loser, at least, isn't going to readily consent to it.
In effect, decisions about what to do about our local problems are going to have an economic effect, just as a change in military focus will end up doing. You can't reduce/increase/rearrange tax impositions without running the risk of job and order losses.
Development is a possible answer, but this often raises the ire of local residents. Perhaps politicians can be forgiven for viewing the tax benefits (and often the prospect of increased employment) favourably, but they're likely to be told, frequently in quite passionate terms, that "money isn't everything."
If democracy has been described as the art of the possible, it sometimes comes down to coping with the impossible.

So how about the real estate market?
Since the spring, there have been mutterings about the market being headed for a soft landing. Canadian realtors are less concerned than their US counterparts, but many listing agents hereabouts are seeing fewer showings and fewer offers. No one is quite sure why the pendulum has swung, but American adventures abroad have to be a coincidence rather than a cause. Moreover, this month's elections are too recent to have any bearing on the rate of housing sales.
What seems most likely is the buying public's progressive discontent with galloping price increases. Enough is enough already!
Nevertheless, all the talk and discussion about what may occur politically in the coming months suggests that any soft landing isn't going to end too soon. Probably, a degree of uncertainty on the part of buyers will be added to their disenchantment with sellers who, perhaps for too long, have been able to demand -- and get -- whatever they want.
This may not mean a return to an undoubted Buyer's Market, but it will increase the chances of getting an offer accepted. It may, in fact, start to be the only one a seller sees.

Gloom and doom?
No. All we're seeing is a market correction.
Moreover, the Democrat interest in such ideas as raising the minimum wage, as well as our local demands for a fairer tax structure, can both put money into the public's pockets.
We will, I'm sure, see a change in our present overseas commitments, but it's likely to be balanced by some income adjustments and new tax concessions.
In the meantime, people will go on buying and selling houses. At most, they'll have to work a little harder at it.

At this time, though, perhaps we just need to check our bank balances to see if we can pay for Christmas -- which is now only 33 Shopping Days away!