Well, the election is over, and the people have spoken: Barack Obama is the 44th President of the United States. He is, of course, our first African-American President, and more importantly to the world of financial advice, the most liberal President since, well, ever. As a rule, I don’t believe politics has a place in publications for financial advisors, yet there are rare times when political events and national/world economics threaten to overlap so forcefully that it would be foolhardy to ignore them. I suspect that now is one such period.
Despite President-elect Obama’s largely successful efforts to position himself as a “moderate” (which was intriguingly juxtaposed with John McCain’s attempts to paint himself as a “conservative,” in what were undoubtedly the best-performances-by-political-candidates since Ronald Reagan), he and Joe Biden provided enough clues about his economic philosophy and plans during the campaign to make some pretty educated guesses about what to expect.
It doesn’t seem much of a stretch to anticipate tax increases on “rich people” and corporations. Mr. Obama did acknowledge that he’ll back-burner his tax increases in the wake of the Wall Street meltdown, as they would “hurt the economy” (which raises the question “Why raise them at all?” but that’s for another time). Whenever he deems the economy sufficiently recovered to warrant another knock-out punch, we’ll probably see higher taxes.