Elephants on the March
Investors would welcome the increasingly likely prospect of Republican victories in the November election, says Steve Forbes, chairman and CEO of Forbes.
Steve, what do you make of all the political action, since all the other candidates have now dropped out mostly?
Yeah, Ron Paul did it.
Yeah, so now we’re facing the final stretch. And according to reports, each side is going to spend a billion dollars. What will that do to the markets? When will that intensify during the season between now and November?
Well, I think people in the markets are going to really start focusing, as the summer wears on, on speculation about who is going to be the VP—will Obama dump Biden and that sort of thing. If it looks like the Republicans have a chance at least of winning the Senate and the White House, I think the market is actually going to respond, which of course President Obama will take credit for.
I believe that Romney will win the election, and Republicans will win control of the House. You saw in the Wisconsin primary a couple of weeks ago, even though he had no opposition, Scott Walker, more turned out in the Republican primary than the Democrat primary.
I’m optimistic, and one good thing is the Romney team so far has been playing an A-game. Every time the Obama people come out and hit him with something, they come back and hit even harder. They have made a big thing about how Romney mistreated the family dog on that trip where he put him on top of the roof in the cage, and the Romney camp replied, well, when Obama was in Indonesia he ate dogs. (laughing) They’re not going to wait to respond.
Do you see any chasms in the Democrat party? I’m hearing that Hillary is thinking of running, or maybe her husband would like her to run.
Well, I think a year ago he certainly was pushing her. That story came out, they’ve all denied it, but it certainly has the ring of truth to it.
It’s too late to do anything now, but I think for a lot of Democrats, their enthusiasm level is a fraction of what it was four years ago. I think as long as Romney establishes credibility, people will be willing to take a chance. OK, we know the current coach isn’t doing it, so let’s try this guy.
Haley Barbour reminded me a few months ago that not since the late 1800s had a party incumbent in the presidency who took the White House from the opposite party actually lost. And it was Jimmy Carter, and I’m trying to remember what it was like in 1980, what the set up was.
It strikes me that the press was perhaps not as supportive and as friendly to Jimmy Carter, but perhaps they were, and of course unemployment was high and there were a lot of problems. Do you see any other parallels?
Well, I think Obama doesn’t come across the way Carter did, as a bumbler. It’s more like what direction is he taking this country which disturbs people, including me. I think that in 1980, though…remember, the White House wanted Ronald Reagan to be the Republican candidate. They thought he would be the easiest one to beat.
What Reagan did, even though he was 15 points behind in early 1980, was establish credibility that he was a viable alternative. He came out, remember, with a proposal for a 30% tax cut across the board in income taxes, strong national defense, domestic spending restraints, deregulation—positive programs—and he won in a landslide.
That’s why I’m optimistic. I don’t underestimate the capacity of the Republicans to make mistakes, or the Obama campaign to hit and hit hard. I think at the end of the day, the American people want a change that free people can believe in.
As we get closer to the election, what do you expect to see happening? Is a billion dollars for each side significantly more in terms of campaign spending? How much is it going to saturate the airwaves? And I gather there’s only six or seven states that voted for Bush in the previous election and voted for Obama in the past election. I see most of it is going to be concentrated in those states.
You’re going to have a lot of saturation. You’re also going to have a lot of on-the-ground operation.
Obama, for example…we’ll see if he keeps it up, but he’s already got 40 people working in New Hampshire. He’s got over 100 offices opening up in North Carolina. I’m sure they’re doing it in other states. It’s going to be much more intense people to people.
And one of the things I think the Republicans have to be on guard against is voter fraud. How easy it is to register? How easy it is to vote even if you’re not the person who is actually doing the voting? And Lazarus is going to really marvel at the resurrections that happen on Election Day.
$1 billion is a lot of money; more than has ever been spent before, but when you consider the stakes involved and you consider that fast food companies spend many times that each year selling hamburgers, it’s not a lot of money to choose the next leader of the country that leads civilization…the only country that can save civilization.
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