Last night, the late Ted Kennedy’s Senate seat was won by a Republican, Senator Brown. Despite Obama’s campaigning for the Democrat runner, she was unable to garner enough support. This outcome is significant, as it removes the 60 seat super majority of the Democrats in the Senate. While Democrats still retain their majority, Republicans can now filibuster, i.e. delay or obstruct legislation they oppose.
Despite Republicans running up deficits during Bush’s terms, they are now criticizing the increase in deficits under Obama. Policies such as healthcare and stimulus will now come under greater scrutiny and are likely to be delayed if not completely obstructed. How one sees this, whether damaging or beneficial, depends on the perspective. From a free market perspective, this is beneficial. Markets will not be set free, nor will deficits disappear, but less damage is likely to be done.
US stocks are down today, but Wall Street generally likes less government intervention, less regulation, and less deficits (unless it is for the purpose of aiding Wall Street). Many pharmaceutical stocks had previously gained on the hopes of increased government business with healthcare reform, so they are likely to fall however.
