While the last results for US Senate and House of Representative seats are still trickling in, the overall picture is clear — the Republicans have taken control of the House, but the Democrats will retain their majority in the Senate and of course still hold the presidency. In my view, this outcome is a small positive for the tech market, but doesn’t fundamentally change our outlook for around 8% growth in the US IT market and 7% growth in global IT markets in 2010 and 2011.
On the eve of the election, my big concern from an IT market perspective was that the Republicans would take control of both the House and the Senate. That concern was not driven by my political affiliation (which happens to favor the Democrats), but by the potential for a political stalemate between a confrontational Republican Congress (with hard-line conservative Republicans and Tea Party supporters setting a shut-down-the-government tone) and a combative Democratic president. In that political environment, badly needed measures to help stimulate a lagging economy would get stalled, the political battles could shake already weak business and consumer confidence, and the US economy could then slip into a renewed recession. And an economic downturn of course would be bad for the tech sector.
This past weekend, my wife wanted desperately to attend Jon Stewart’s “Rally to Restore Sanity and/or Fear,” to support the message of civility and moderation. An injured foot and problems with travel logistics kept her from attending, but we watched it on the Comedy Central network. It was, of course, a counterpoint to the “Restoring Honor” rally that Fox News’ Glen Beck held in August. However, there were two striking commonalities about the two rallies:
First, the ability of cable program show hosts to gather hundreds of thousands of people (estimates seem to be around 100,000 for the Beck rally and 200,000 for the Stewart rally) to travel to Washington for a rally. We’re not talking about rallies organized by a major political leader like President Obama or a media giant like Walter Cronkite with a TV audience of tens of millions of people. Instead, the TV personalities who hosted these events have cable audiences that on a good night may reach 3 to 5 million people.
Second, the absence of attention to substantive economic issues facing this country, such as persistent high unemployment, economic recovery strategies, education and competitiveness, global warming, or budget deficits and priorities. Instead, the rallies focused on culture, tone, and attitudes, with the Beck rally resembling a college homecoming event where the returning alumni complain about how the place has gone downhill since they left, while current seniors crack jokes and make fun of the old geezers wandering around the campus.