Now that most exciting week of 2010 is over with some expected results, it's time to take stock of what happened during the week. Mid-term elections are over with results on expected lines. Republicans won house in big way while democrats managed to keep senate majority by thin margin. It was definitely a big defeat for Obama as he himself put, it was "shellacking".
This was not the first time President's party got big drubbing in mid-term elections in his first term and still went on winning second term. Let's look at each one of them in last few decades:
This was not the first time President's party got big drubbing in mid-term elections in his first term and still went on winning second term. Let's look at each one of them in last few decades:
- Truman: In the 1946 US Congressional election, the Republicans regained control of both the US Senate and US House of Representatives, as a result of President Truman failing to handle the vast post-war labor strikes. However Truman went on winning 2nd term in 1948 and democrats gained back control of house
- Reagan: The conservatives (whom Reagan backed) lost a substantial number of seats in Congress in 1982. However after recession ended in 1983, Reagan won 2nd term with landslide victory
- Clinton: With Newt Gingrich's "Contract with America", Clinton's democrats got similar drubbing as recent mid-term elections. However as economy was coming out of recession very strongly and with Clinton's "triangulation" strategy, he went on winning 2nd term
Both President Reagan and President Clinton moved to center and worked with congress and got economy moving. President Harry Truman gained from rural communities after he pledged to repeal the Taft-Hartley Act and won in big way
So question is: Who should Obama emulate ?
Should he emulate Truman to protect Health care Bill which republicans have vouched to repeal or should he emulate Clinton/Reagan to get economy moving ?
Given that 80% of voters mentioned economy and jobs are their most pressing concern, choice is simple. Here are few ideas which I think not only would help President Obama win 2nd term but also help move America forward:
- Extend tax-cuts for all earning less than $250 K permanent and for those earning less than $ 1 Million for 2 years. GOP should be able to agree to this
- Give one-time tax holiday for repatriation of money kept outside USA provided it is tied to job creation. For example: For every job created in USA, companies can bring $ 1 Million at less than 10% tax. Companies - many of them high-tech have nearly $ 1 trillion parked outside. Even if they bring half of this money, it would create half-a-million jobs and earn about $50 Billion in taxes
- Extend advisor circle beyond Chicago natives - especially get some experts from industry like Silicon Valley
- No more major policy changes - those can wait for 2nd term
- Focus on jobs, jobs and only jobs
- Get out and focus his communication on jobs and economy only
President Obama is doing admirable job in given situation - he deserves a second term. With help from Fed and markets, economy should be well on its way to recovery. So at this time, I am betting (and supporting) President Obama to be two term President.
Markets are doing extremely well with all major indexes gaining over 3%. The momentum should continue till end of year. One should start looking at financials like PMI ($3.5), BAC ($12), MI ($5.5) for possible investments. Another turnaround candidate with potential of 50-100% return is Sunrise (SRZ at around $4).
Have a great week !
/Shyam
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