Massachusetts Senate Race: Implications for Business

I try to avoid politics in this blog, but sometimes I cannot.  Republican candidate Scott Brown has won Ted Kennedy's senate seat, in "the Scott heard round the world."  You are a business leader who has planned on seeing the Democratic Party's agenda rolling through, with health care reform, regulatory reform, and a larger role for the federal government in the economy.  Should you change your political planning assumptions now?

Gerald Seib had an extremely insightful column in Tuesday's Wall Street Journal (subscription required, I think, but who wouldn't subscribe?)  He said that the Democratic victory in 2008 did not reflect a change in ideology, but rather a change in political preference.  The public had not changed its view of the role of government in society and economy, but rather had decided that the Republicans were not competent and the Democrats were worth a shot.

The ideology of America, I think, consists of three parts:

  1. Those who prefer a smaller role for government
  2. Those who prefer a larger role for government
  3. Those who go one way or the other depending on the issue, the circumstances, and the latest news.

If Seib is right, the Democrats have advanced an agenda not in touch with the American populace, either because

  • they misinterpreted the American attitude, or
  • they seized the opportunity given to them, knowing that the people didn't really support the agenda.

After the Massachusetts Senate race, every politician with the slightest chance of opposition will think twice about the Democratic agenda.  Remember, our politicians are not leaders, but followers.  Where ever they see the voters going, that's where they head.

Business planning implications: the most extreme part of the Democratic agenda will be difficult for them to achieve.  But don't expect a return to Bush-Cheney style rule.  Look for a generally liberal direction, but without the extremes that were pushed in the past year.