I have never seen such a phenomenon before. President Obama is hostile to business. The only historic parallel is FDR in 1938 running for his second term. At that time FDR was openly hostile to business.
The current business environment is radically different than at any period in our history. In 1938 there were roughly 25 major corporations, strong unions and very little international trade. Today there are over 1000 major American corporations, few unions and extraordinary international trade.
It is in this extensive and diffuse business community that I presume to find a coherent anxiety about the business hostile attitude of the political administration.
It is because I have advanced this thesis connecting economic growth and business investment to the political climate, that I must test my theory.
Tomorrow I will change my portfolio. Significantly increasing the equity portion and investing heavily in funds that reflect the American stock market and the American economy. I expect Romney to win the election on Tuesday. He will be the most pro-business and one of the most competent administrators to hold the presidency.
The economic outlook does not look immediately positive. We are currently in a global recesession which includes this quarter and the next two quarters. I expect the US economy will rebound by next summer. The natural gas supply will mean a decade of economic boom.
I do not believe that the previous very weak growth rate was accurately reported. Growth rate is adjusted by inflation. We actually had deflation for the past 20 years that was obscured by increases in the domestic prices of academia, healthcare and for most of that period, housing. Since we actually had deflation, our growth was higher.
Our unemployment no longer looks grim to me either. It is beginning to look structural because there are so many open jobs and so few appropriate people to fill them. Most of the economy needs skills that the unemployed don’t have and won’t try to learn.
I am putting my money where my mouth is.