So Barack Obama is back in the White House. He’s throwing a victory party: the Republicans are throwing coffee cups at each other.
Over the next few weeks there is a going to be any amount of analysis of the result and its impact on the next few years. Plenty for the body politic to digest – and there are obvious implications for the US and world economies as well.
But surely it has nothing to do with us? Events in Washington, interesting as they are, aren’t going to affect our businesses in North Yorkshire are they? Actually, I think they might. And I certainly think there are five clear lessons to emerge from the election which are useful to every owner of an SME.
1. First of all, the basics are always going to matter. Just as they did in 2008, Obama’s team got their vote out. His share of the popular vote (assuming Florida ever bothers to declare a result) declined by only 2% from 2008 to 2012 – a remarkable achievement given the economic downturn. Doing the little things and paying attention to the small details will always matter – whether it’s politics or business
2. We’re in for a bumpy three or four months. If you haven’t yet heard the term ‘fiscal cliff’ then you will do. A huge swathe of tax cuts introduced by George W Bush – and extended by Obama – is due to end. If Obama can’t hammer out a compromise with a Republican Congress, then there’s a danger that the US economy could slip back into recession, with inevitable consequences for the world economy. If you’re planning some major investment, it may be worth waiting to see if we’re all going to tumble over the American cliff.
3. Not much is going to change. Assuming the fiscal cliff is safely dealt with – and it’s Obama’s number one priority but you can bet your life it will go down to the wire – then economic policy will remain largely as it has been. Obama’s re-election means that Ben Bernanke will stay on as Chairman of the Federal Reserve. Romney would have sacked him, but now it looks like quantitative easing will be used again if needed, and interest rates will stay low for the short to medium term.
4. You cannot ignore demographics. The fastest growing ethnic group in the USA is Hispanic and 60% of them voted for Obama. Not surprisingly he captured 93% of the African-American vote. Meanwhile, as one commentator put it, the Republicans ‘stumbled around looking for angry white men.’ Whatever business you have, it’s going to be affected by demographics. The population ages and its make-up changes: that’s true in the UK as much as in the US. And it presents opportunities as much as it presents threats.
5. If your message is wrong, it doesn’t matter how much you spend. I think the demographics were the biggest single reason the Republicans lost the election – but there’s no doubt at all their message was deeply unappealing to large sections of the electorate. This was particularly true for some of the far-right candidates for the Senate who managed to lose women voters in record numbers. No-one doubts that these candidates were well funded – spectacularly so in some cases. But if your story is wrong, if it repels the people you’re trying to attract, then it doesn’t matter how many times – or how expensively – you tell it.
Most of this post was written at 30,000 feet as we flew back from Australia. From Monday I’ll be back on Yorkshire’s terra firma and can’t wait to get started again. And the blog will be back to its normal Friday, instead of sneaking up on you at the weekend. Look forward to seeing you all soon…