Business and government: the winners and losers of the US election

November 6, 2012
Obsession
US Election
November 6, 2012

Republican presidential candidate Mitt Romney has touted his experience in private equity as an example of how he’ll benefit the corporate world. But would most big businesses win from a Romney victory? Incumbent President Barack Obama isn’t welcome in many board rooms; he talks of higher taxes on the wealthy and more regulation. But will some corporations be on the receiving end of his proposed spending on infrastructure, education and more? Here’s a breakdown of which industries would win or lose the most under each candidate:

Obama’s winners, Romney’s losers:

  • Healthcare: The Obama administration’s controversial healthcare plan has one obvious and huge beneficiary: the healthcare industry. Even though it caps the percentage of costs insurance companies can claim as “administrative expenditures,” most of the nearly 50 million uninsured Americans will become insured practically overnight. That will mean more demand for medical products, from pharmaceuticals to medical devices to the technology and research that helps companies come up with new drugs.
  • Green energy: Obama has taken heat for his support of now-bankrupt solar-cell manufacturers like Solyndra and A123. Yet many other companies—among them, the electric-vehicle maker Tesla—have fared better, and continue to benefit from regulations for increasing fuel efficiency (not to mention from high prices for fuel). Romney has harshly criticized many of these investments, and would probably chop funding to small clean-energy innovators.
  • Real estate: Like it or not, the Federal Reserve’s policy of buying up mortgage-backed securities is finally getting the financial sector to make mortgages again. Obama has stood behind the Federal Reserve’s efforts—whereas Romney has criticized them—suggesting that victory for the incumbent will lead to the same policies in the future—good news for anyone in the housing business.
  • Construction: A pick-up in housing boosts the construction sector. Also, Obama favors infrastructure spending led by the federal government, whereas Romney has said he favors more spending by states, which would mean less money available overall.

Romney’s winners, Obama’s losers:

  • Oil and gas: Romney champions American energy independence, pushing for environmentally questionable practices like fracking and offshore drilling that would diminish America’s exposure to oil prices from overseas. Not surprisingly, energy and natural resources companies have thrown $13.6 million behind Republican candidates—Romney included—and just $2.2 million behind Democrats.
  • Financial institutions: The last four years have been embarrassing for Wall Street. After supporting Obama in 2008, bankers have increasingly turned towards Romney, who they believe will eliminate many of the regulations put in place after the crisis that could curtail their business. A poll found that 72% of Wall Street employees also believed that a Romney victory would improve their pay packages.
  • Weapons manufacturers: Romney has vowed to increase defense spending by $2 trillion. These plans are still fuzzy; the candidate has said he would add 100,000 new troops, though that later turned out to mean that he merely wouldn’t cut 100,000 personnel as Obama has promised to do. Under Obama, 2012 has in fact been a great year for defense spending, but the president has shown he’s more inclined to cut troop levels and spending on new aircraft and ships than to cut social programs.

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