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Impacts of Presidential Election on Economic Changes

Impacts of Presidential Election on Economic Changes

The presidential election in the United States of America is one of the most important activities that citizens await eagerly. All Americans engage in this important process after every four years. One person is allowed to serve no more than two four-year presidential terms after which he/she vacates the office. The two main parties that contest presidential election are Republicans and Democrats. The two parties have distinct political, social, and economic ideologies. Due to these ideological differences, every election is bound to bring about changes in many macroeconomic variables as well social transformations and alterations in political landscape of the country. The US President is one the most powerful persons in the world, and his/her policies have a great impact on the people's way of life. With the American population heading to the election in next year, the paper will seek to establish how different aspects of life will be affected either directly or indirectly by this process (Hershey, 2015).

Impact of Presidential Election on Consumer, Demand, Supply and Prices

The change of ruling regime has many effects on the economy as well as social and political landscape. The first macroeconomic variables that will be examined on how they are affected by presidential election are the consumer, demand, supply and prices of commodities within the economy. The demand for the goods and services declines since the government is the largest consumer, and during this period, this body is not fully functional. Due to the government functioning at minimum level, the demand for the products such as newspapers and other commodities that are essential to the government officials reduces and, as a result, the prices decline. The law of demand and supply takes effect in this situation as when the demand for the product is lower than the supply, the prices drop significantly. In most cases, the citizens wait for the election results in their houses, and this hurts some sectors of the economy such as the transport industry, since many people limit their movements in this period. Due to the market imperfections, some products become more demanded than others. A good example is the prices of crude oil in the economy. In the next elections, the cost of crude oil per barrel is considered to change, either reducing or increasing.

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Impact of Presidential Election on Production of Goods and Market Models

The other economic aspect that is affected by presidential election is the production of goods and market models. The ownership of the production facilities is influenced by the elections because a change of the regime causes transformations in the policies and the producers are not in position to determine how their activities will be impacted by the process. It leads to decline in production activities during the election period and after it. Market models are also affected by the election due to ideological differences (Baker, Bloom, & Davis, 2013). They are mainly influenced by the reduction of money in circulation conducted by Federal Reserve, which lowers the purchasing power and, as a result, the stock market activities drop significantly. In some instances, economic analysts have noticed the stock market doing better when a President from the Democratic side assumes the office rather than when the Republican candidate is elected. Many researchers stated in 2012 that any time a Democrat is in office, the stock market gains a significant index. Numerous studies conducted by different economists have shown little correlation between the mentioned growth and the party, to which the President who takes office belongs; this is because the market is self-regulated and not controlled by the government of the day.

Impact of Presidential Election on International Trade

International trade is affected by presidential election, because during this period, the government activities are minimal and, as a result, the checks and balances are not available. International trade involves imports and exports of the commodities. Presidential election brings about a change of individuals in the government, and this may cause uncertainty among the trading partners of the United States of America. The new regime may come up with new economic policies that regard to imports with the aim of discouraging it. Some of the economic approaches that may hinder imports to the country include an increase in customs duty and abolition of subsidies on some imported goods. Reduction of imports to the state brings about a positive balance of trade. In some instances, the policies implemented by a new President may favor doing business with some countries at the expense of other ones.

Impact of Presidential Election on Health Issues

The health sector is the most controversial issue that can determine which party will win the presidential election. It is because Republicans are keen to abolish the Affordable Care Act established by Obama administration since they refer to it as to the waste of resources. The issue of Medicaid program has brought a lot of different feelings among Republicans because they believe it is not economic viable (Booth, Wade, & Walker, 2015). In case the Republican candidate will win the presidential elections and assume the office, there will be changes implemented in the health sector, and this will entail the abolition of the Affordable Healthcare Act. The prospects of abolishing the Affordable Medicaid program have faced strong opposition from the general public who feel that the gain achieved will disappear. Obama administration has invested heavily in the Affordable Healthcare Act to ensure that low-income citizens are in a position to access quality health services.

Impact of Presidential Election on Immigration

Immigration issue is the other crucial pillar that is likely to be affected by the presidential election. In a recent CNN interview with Hillary Clinton, who is struggling for the presidential post, the candidate stated that she would encourage deportation of any person who is deemed to be a threat to American society. From her allegations, it was clear that once elected, she would advocate the deportation of immigrants from the country (Dye & Gaddie, 2012). Immigration policy in the United State of America has faced criticisms due to allowing entry to people with malicious motives towards the population. In the recent past, a large percent of atrocities committed in the United States were perpetrated by foreign individuals. Changing of the President can lead to alterations in the immigration legislation and new stringent measures that are likely to be implemented can make it difficult for many foreign citizens to acquire permanent residence in the United States.

Impact of Presidential Election on Financial Markets

Financial markets within the United States of America are mainly affected by the process of presidential election since the traders are anxious about the proceedings within the country. Financial markets include the debt and equity aspects. These structures are highly sensitive to the fluctuations of the market and how the traders feel about the situation on it. In the time of the presidential election, there is a lot of uncertainty surrounding the economy, and this affects the volume of trade. In most cases when Democrats win the election, the financial markets register gains regarding profitability, unlike in a situation when the Republican candidate assumes the office. Financial markets are crucial to the economy since they provide a platform in which agents with surplus resources meet those will deficit of resources.

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How the Presidential Election Shapes Leadership

The role of political leadership is also impacted by the election of the President, and this is because the incumbent President has to vacate office to create space for new administration. A change in political leadership is eminent because new people will bring new ideas that will result in the new way of conducting internal and external policies (Linzer, 2013). The presidential election leads to implementing new ideas about governance and how people engage with the government.

My Impression and Lesson Learned

My impression is that presidential election is an important process in the public life of the United States of America. The election is conducted every four years, and people are eager to elect the candidate who has ideas that will improve their living standards. Having attended some of the campaign sessions of both Democrats and Republicans, I was able to understand the intensity of the process and what it means to the public to go for elections. As a student of economics, I have come to realize that the election period affects the economy directly. In some instances, the financial markets have incurred losses due to election as the investors’ confidence in the market is usually low in this period. The outcome of the election affects the living standards of people because the incoming government may have poor and controversial economic policies that may influence the wealth generation negatively. Some examples of the controversial policies that may impact on the growth of gross domestic product are increase in taxes and creation of the unfavorable environment to conduct business. The citizens need to practice the spirit of sobriety when electing their President because the outcome of the election determines the welfare of the society in general as the President takes responsibility for all the matters affecting the country.

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