Election Night Predictions!

In honor of my friend, Morgan Griffith, who just defeated 14-term incumbent Rick Boucher in the Virgina 9th Congressional District, let me make the following brief prediction.

Morgan will be a good and responsible Congressman. He will stay true to himself and not become enamored of life in Washington, DC. We will all miss him when he is away and I know his wife, Hilary, is probably cheering and weeping at the same time as this means she will see even less of him once he takes office. Congratulations Morgan and Hilary. It could not have happened to two better and kinder people.

On the subject of whether the new Tea Party flavored Republican House will have a negligible impact on the America’s trade with China, I will make the following prediction:

Nothing will change.

Not because it shouldn’t, but because it can’t. Not yet. Not for a long while.

As long as the USA is borrowing money in shiploads from the Chinese, there will be little to no leverage. As long as the USA continues to pursue policies that make the USA an unattractive place to start a business, there will be no hope of changing the rationale for doing business in China.

I approach this as someone who watched his Father start a metal stamping company in the USA during the 1980’s. That company, still in business today, would never be started today. The parts would be outsourced to China, because that’s what the math would tell you to do.

I write this with no special joy, despite how I earn my living. It is simply a recognition of the reality of my surroundings.

The USA will be gridlocked at the federal level until at least the 2012 elections. Having a bulwark in the House to stop the anti-competitive agenda of the last two years will be a good thing, but the numbers are not there to start turning the ship.

If the USA wants to compete with China, tax policy will have to change. Trade policy will have to change. Health care, OSHA, EPA, Department of Education, on and on and on, will have to change. And this won’t happen with a divided Washington.

Will the GOP House be better for PassageMaker’s business? I firmly believe it will. Entrepreneurs and small-to-medium businesses are risk averse. Now they can sleep a little easier that they will get to keep some of their earnings. Gridlock is at least stable, and even a less than optimal stability is preferable to the roller coaster we’ve been on the last few years. We’ve had a number of projects stall out because of clients who weren’t sure of the business climate. I am betting this changes for the better.

So, Congratulations Morgan! And on what other China business blog are you going to get a Fishbone reference on election night? I know that they didn’t mean it when they wrote the song, but listen to the lyrics – is there a better Tea Party anthem?