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The paper critically examines James Surowiecki's article "Elective Economies," which discusses how the U.S. stock market reacts to elections and political power shifts. The paper discusses Surowiecki's explanations why the stock market does not necessarily boom when stereotypically big-business Republicans take power, nor nosedive when stereotypically anti-business Democrats win influence. The paper looks at Surowiecki's final conclusion that the economy, on a macro level, will be affected little by the Democrats taking power in Congress.
From the Paper:"While trying to discern whether Wall Street would prefer Republicans or Democrats in power, Surowiecki never quite arrives at a fairly obvious conclusion: Wall Street prefers neither. Arguably, the markets are not smitten with either political party but, instead, prefer checks on the influence of either party's ideology. To a certain extent, the market likes gridlock because investors know that both sides have lost the ability to do anything radical that could significantly hurt business (Twin, 2006). Although some political pundits had speculated that the market would experience a sharp decline after the Democrats took over Congress in Nov. 2006, it never happened because investors instead saw a gridlock situation being created that could usher in some stability (Twin, 2006)."
Sample of Sources Used:
- Bartlett, Bruce (2003). "A Taxing Experience." National Review, Oct. 29. Retrieved Nov. 21, 2006 from http://www.nationalreview.com/nrof_bartlett/bartlett200310290853.asp.
- Bresiger, Gregory, (2001). "The Fed and Politics." Retrieved Nov. 21, 2006 from the Web site for the Ludwig von Mises Institute at http://www.mises.org/story/746.
- "Clinton gave us the largest tax increase ever" (No Date). Retrieved Nov. 22, 2006 from the Web site for You Debate at http://www.youdebate.com/DEBATES/clintons_tax_increase.HTM.
- "Eisenhower, Dwight D." (No Date). Retrieved Nov. 22, 2006 from the Web site for the Encyclopedia Britannica at http://www.britannica.com/eb/article-200029/Dwight-D-Eisenhower.
- "Fact Sheets: Taxes" (No Date). Retrieved Nov. 22, 2006 from the Web site for the U.S. Treasury Department at http://www.ustreas.gov/education/fact-sheets/taxes/ustax.shtml.
Cite this Article Review:
"Elective Economies" (2007, September 19) Retrieved October 23, 2020, from https://www.academon.com/article-review/elective-economies-98358/
""Elective Economies"" 19 September 2007. Web. 23 October. 2020. <https://www.academon.com/article-review/elective-economies-98358/>