10/24/12 – Middle of the Road

Posted by Brad McMillan, CFA, CAIA, MAI

This entry was posted on Oct 24, 2012 12:15:52 PM

and tagged Politics and the Economy, Yesterday's News

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“Standing in the middle of the road is very dangerous; you get knocked down by the traffic from both sides.” — Margaret Thatcher

Margaret Thatcher is not usually associated with the middle of the road, but I have always liked the above quote. And, indeed, there is no question that the middle of the road may be the place to be in American politics.

I’m thinking about this because of a couple things I have written about but had not considered together. First is the return of the Romney campaign to the middle. It is a smart and expected move, but I had thought there might be more kicking on the right when he did so; in fact, not so much. Perhaps the right is looking more at actually winning than at ideological purity. Perhaps the extremes are becoming less popular.

What makes me write this today specifically is a story on page A4 of the Wall Street Journal (WSJ), “Bachmann Fights for House Seat.” Michele Bachmann, a former Republican Tea Party presidential candidate, has seen her margins erode in her current campaign for Congress and may actually lose. This is in spite of apparently outspending her opponent, a first-time candidate, by several times.

The second story that I think is relevant here is the campaigns’ pursuit of women voters. On the same page of the WSJ is an article titled “Campaigns Court Women.” The issues it highlights are jobs and women’s health, not the ideological positions typically associated with either right- or left-wing political movements.

Finally, this leads us to the importance of the battleground states—where the electorate is so evenly balanced that no one knows what the results will be, never mind that said results will determine the outcome for the country as a whole. This also supports the notion that the race will be won in the middle and that whoever wins will also have to govern there.

Obama won in 2008, in part by promising to move past partisanship and ideology. To the extent that he has failed in that, it has created an opportunity for Romney to claim that mantle, which he has clearly attempted to do in the debates. I think this is a positive thing, and if Romney wins and follows up, the country will benefit. If Obama wins, I think he also will need to move more toward the center if he wants to govern effectively.

Although the end of ideology has been proclaimed many times, we certainly are not there today. With the campaign ending up in the middle, though, and particularly with Mitt Romney now praising Bowles-Simpson—a bipartisan initiative created by the Obama administration—there may be a de facto recognition that actual solutions will have to come from the center. If you look at the best estimates of the Romney plan, it looks distinctly like Bowles-Simpson.

The fact that many things are starting to converge on the center suggests that the center may not only hold but become the place to be.

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