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Big GOP Sweep Is in the Cards
09/20/2010 2:14 pm EST
Steve Forbes, president and chief executive officer of Forbes, Inc., predicts a massive midterm victory by the Republicans in both the House and Senate, which he thinks will trigger a big market rally. He is interviewed here by MoneyShow.com executive editor Howard Gold.
MoneyShow.com: Everybody’s starting to focus on the midterm elections and the real question now is not whether the Democrats will lose seats, but how many, and will they even lose control of at least one house of Congress. What do you think?
Forbes: I will go out on a limb. I think the Democrats are going to lose control of both houses—and I think after the election, any surviving Democrats who are not to the left of Nancy Pelosi, many of them are going to defect to the Republicans.
So, you are going to see a huge change and it is not because the Republicans necessarily are getting things right; I think it is because the American people know what we are doing is profoundly wrong. They are scared of it, they are angered by it, and so they are going to vote Republican. But I think fortunately, though, there are some good Republican candidates who are going to make sure, along with the Tea Party movement and others, that this party does not backslide the way it did in previous years.
Q: To get control of the House, the Democrats are going to have to lose 40 or 41 seats. To lose control of the Senate, that is a much bigger order of things, isn’t it?
A: You just go around the country, and I think there is a good chance in Connecticut, Pennsylvania, Delaware, Indiana, Illinois, Arkansas, Wisconsin, North Dakota. Then you look at Colorado, Nevada, Washington, California. I even think there is a chance in Oregon. You add those up, that is 12-13 seats. That puts us in the majority.
Q: Well, that is pretty optimistic. Since World War II, the biggest change in a midterm election was when Clinton lost 54 House seats and eight Senate seats in 1994 and Eisenhower, Ford, and Johnson lost 48 House seats. The average post-World War II loss was 22 House seats and three Senate seats. So, what you are really talking about is something double or, in the case of the Senate, triple the average post-World War II loss.
A: Yes, I think [if] you combine Clinton on House seats and Eisenhower [losing 12] Senate seats, you are going to get the magnitude of what has happened.
Q: So, 54 House seats are going to go Republican—and 12 Senate seats are going to go Republican?
A: I think there is a very good possibility of it.
Q: So, what do you think is going to be the effect on the market of the mid-term elections?
A: I think that with the prospect of huge changes coming in November, even though we are going to still have two tough years, because President Obama will still be in office, markets look to the future. So, I think you are going to see [a] 20% to 30% rebound as people realize there is a profound political shift coming.
Q: Thank you.
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