GA Trade Sep-Oct Interactive - page 7

I
n earlyNovember, the U.S. will hold
midterm elections. According to the
latest polls, the odds for Republicans
to not only defend theirmajority in
the House of Representatives but also
gain control of the Senate are better
than even.What are the potential
consequences for the political outlook
over the next two years?
To be very clear: Even in the case of
a Republican victory, therewon’t be a
major shift in the political direction.
All important bills by Republicans
will either end in the Senate (filibus-
ter) or be vetoed by the President. In
other words, political gridlock is here
to stay – onlywith a different
balance of power.
That, however, does not mean that
the outcome of themidterm election
does not matter. If one party controls
both chambers of Congress, it has
plenty of opportunities to impact the
direction of the public debate. There
can be no question that Republicans
will try to use this power to improve
their chances of winning the Presi-
dency, and thus total legislative
control, in 2016. Among the possible
steps that a Republican Congress is
likely to take are forcing Presidential
vetoes, rejecting the President’s
budget (but not another shutdown),
blocking the President’s nominees for
Supreme Court and Fed Board, as
well as launching investigations
against the administration.
To be sure, there is also the hope that
a Republican victory at the upcoming
midterm electionmightmark the
beginning of amore constructive tone
inWashington. After all, a Republican
Congressmight want to show to the
electorate that it can get something
done. EvenPresident Clinton and
Speaker Gingrich, after a hostile start,
got their act together and passed a
major welfare reform aswell as a
landmark deal to balance the federal
budget. Areas inwhichRepublicans
andDemocrats these daysmayfind
common ground are immigration and
corporate tax reform. But while hope
springs eternal, we remain skeptic.
Will all of this ultimately help the
RepublicanParty towin it all in
2016?We do not think so! First, the
majority of Americans continues to
prefer the Democratic Party. Second,
the President’s economic record is not
so bad, if we look at the development
of the unemployment rate and the
federal budget deficit, arguably the
dominantmacro indicators during the
campaign. Finally, there is another
third of the Senate up for reelection in
2016. No less than 24 of the then
contested 34 seats are currently
owned byRepublican Senators. That
gives Democrats plenty of opportuni-
ties to pick up a couple of seats, and
reclaim themajority of the Senate,
which theymay ormay not lose this
November.
n
What if RepublicansWin the Senate?
Dr. Harm Bandholz, CFA
Chief U.S. Economist
UniCredit Research
3,500 squaremeters (37,675 square
feet) of production space. Large
cranes will enableWitte to easily
move large pumps weighing up to
40metric tons.
Germany’s Aichele to Build
$2MillionManufacturing
Plant inGastonia, NC
Aichele Inc. will build a $2million
plant inGastonia Technology Park
that will make cutting equipment for
the nonwovens and paper
industries. The company, a unit of
German-basedAicheleWerkzeuge
GmbH, will employ about five
workers. It has already bought
a 6-acre site in the park.
GermanNest
Competitor Tado Looks
to Expand in theU.S.
Is the competition among smart
thermostats heating up? German
smart thermostat company Tado
recently raised $13.6million in new
financing from backers Target
Partners and Shortcut Ventures. CEO
ChristianDeilmann says the funding
will be used to fuel growth in Europe
and help the company expand in the
United States. Earlier this year,
Google acquired smart thermostat
startup Nest for more than $3 billion.
E C O N O M I S T ’ S C O R N E R
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