Businesspeople say gridlock is their big worry
President Obama, flanked by wife Michelle and daughters Sasha (to his left) and Malia, waves to supporters at his victory rally in Chicago early Wednesday. (REUTERS/Jason Reed)
The prospect of continued political gridlock in the wake of an election that left the current balance of power intact sent stocks tumbling Wednesday, as the Dow lost more than 300 points.
Stocks fell 2 percent, putting the S&P 500 on track for the biggest drop since June. Investor focus appears to have shifted from the election to the looming fiscal showdown and whether it could create another U.S. recession.
"I think what the markets are saying today is not anti-Obama or anything like that," said Tom Rath, a former New Hampshire attorney general and adviser to the Mitt Romney campaign. "I think what they are saying is that the election appears to have given us the same political concoction that has produced gridlock up to this point."
Energy, health care and the banking sectors were hardest hit after Obama defeated Romney, whose policy positions favored those industries.
Defense shares also plunged.
The biggest concern, as Rath observed, was the prospect of a bitter debate over some $600 billion in pending spending cuts and tax increases, and a fear that a lame-duck Congress will not take decisive action.
"I really hope that the winners here, Republican and Democrat, say it is time we really have to deal with these things. We can't just kick the can off to the next election," he said.
Business owners in New Hampshire, no matter who they supported during the campaign, expressed a hope that Wall Street's worst fears won't be realized.
"My concern now is the remaining divisiveness between parties and people," said Scott Baetz, owner of Admin Internet in Windham and a member of the Small Business for Obama coalition during the election. "I don't mind saying as someone who voted Republican for many years, my concern now is the divisiveness between the parties and the people. I hope we can get together, and both parties can say, 'Let's be Americans.'"
Jack Gilchrist of Gilchrist Metal Fabricating in Hudson spoke at the Republican National Convention and was introduced by N.H. Sen. Kelly Ayotte.
He drew national publicity when he was featured in an ad rebuking President Obama for the "You didn't build that" comment.
"I hope there's some compromise," he said, "but we're so far apart. I don't remember the country being so divided. That was the attraction to Mitt Romney. The guy knows how to get things done."
The negative campaigning is going to make compromise even more difficult, he said. "Why should the House of Representatives compromise on anything after they were demonized and blamed for all our problems."
John Lambert, owner of Lambert Auto Sales in Claremont, said the main concern of business owners is that Congress, Democrats and Republicans get back to work and get something done.
"This fiscal cliff thing is unbelievable," he said. "The uncompromising positions on both sides are very hard for the public to swallow. We want to see our elected officials accomplish something and not just gridlock along party lines."
Rath thinks the election may change the dynamic.
"I think in the cold light of morning, with the election results known, that people are going to reconsider and try to figure something out. I think the President, having won and being freed of running for re-election, may have more flexibility to move in that direction."
Brian Gottlob, of PolEcon Research in Dover, said it could go either way.
"Fortunately, I think brinkmanship has lost its luster in the economy among businesses and investors, but maybe the politicians think there is still a benefit to it. There isn't a democracy around that doesn't work on compromise. And compromise has become a dirty word these days. My great fear is that we see (Republicans) reason that we didn't win because we weren't hard-line enough."
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Material from Reuters News Service was used in this report. Dave Solomon may be reached at email@example.com.
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