Insights
Looking Past Election Day
The current election has revealed deep division and mistrust in our country, but it is not the first polarizing presidential contest. The election of 1800, pitting incumbent John Adams against Thomas Jefferson, was an emotional and hard-fought campaign. Each side believed that victory by the other would ruin the nation.
The Adams Federalists attacked Jefferson as an un-Christian moralist whose sympathy for the French Revolution would bring guillotines to the banks of the Potomac. Jefferson and the Democratic-Republicans denounced the strong concentration of federal power under Adams’s presidency, and warned that the Federalists’ ultimate goal was to crown Alexander Hamilton as King of America. The Democratic-Republicans specifically objected to the expansion of the military, the attack on individual rights in the Alien and Sedition Acts, and new taxes and deficit spending used to support broadened federal action.
That election was a convincing victory for the Democratic-Republicans, who claimed the White House and swept both houses of Congress. The presidential result was not without drama, however. The election of 1800 exposed one of the flaws in the original Constitution: members of the Electoral College were instructed to cast two names for President with the idea that the candidate with the most votes would become President and the candidate with the second most, Vice President. As it turned out, running mates Jefferson and Aaron Burr tied for the most electoral votes.
The election was then put in the hands of the outgoing, Federalist-controlled House of Representatives, which, after 35 tied votes, ultimately elected Jefferson on the 36th ballot. Most Federalists preferred Burr, but one of them, Alexander Hamilton, prevailed to secure the presidency for Jefferson; the man he felt was the lesser of two evils.
Hamilton stated:
Mr. Jefferson, though too revolutionary in his notions, is yet a lover of liberty and will be desirous of something like orderly Government. — Mr. Burr loves nothing but himself – Thinks of nothing but his own aggrandizement — and will be content with nothing short of permanent power in his own hands. –No compact, that he should make with any passion in his breast except Ambition, could be relied upon by himself. — How then should we be able to rely upon our agreement with him? Mr. Jefferson I suspect will not dare much. Mr. Burr will Dare every thing in the sanguine hope of affecting every thing.
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The election of 2016 has been incredibly stressful for citizens and candidates, and it is not an exaggeration to say that our democratic system of government is stressed out as well.
Our newly-elected or re-elected officials will inherit an economy with six years of continuing job growth and an unemployment rate below 5%. But these numbers don’t capture those displaced by innovation or policy, or those who have given up looking, for whom the recovery has been less than complete. There are unanswered questions about declining measures of worker productivity and entrepreneurship. Unresolved healthcare and education policies contribute to our economic challenges, and more importantly contribute to the feeling of being left behind by the economy and the government.
In the near term, a president has little control over policy or the economy. But he or she can set a positive tone by reaffirming that our president and our congressmen are representing us, rather than looking out for themselves and those who contribute to their campaigns. The strength of our Constitution, our way of government, is our belief in the unwritten rules of conduct that go along with it – liberty, tolerance, equality under the law. Our leaders can start by addressing economic inequality, as well as the health and safety of the electorate. There are no quick fixes, and sacrifices will be necessary. What we desperately need is a sense that we’re all in this together, and to know that we’re capable of making progress.
For the markets, the consensus best-case scenario is a Clinton win, with split or Republican control of Congress. This is because markets are most comfortable with a continuation of the status quo, especially in terms of international trade and regulatory policies.
Irrespective of the outcome, we will be watching how our global political and trade relations evolve. It would be foolhardy to throw away the stable, cooperative equilibrium we have with Europe, Japan and China on these fronts. We are still in win-win mode with much of the world. There are no stable we win – you lose relationships (see Brexit). Lose-lose is truly a worst case scenario.
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As the first peaceful transition of political power between opposing parties in US history, the election of 1800 had far-reaching significance. Jefferson appreciated the momentous change and his inaugural address called for reconciliation by declaring that, “We are all Republicans, we are all Federalists.”
The Jeffersonian belief that government must be accountable to the people would dominate American politics well into the nineteenth century, and remains essential today. Jefferson proved to be one of our greatest Presidents. May tonight’s winner bring us together as he did.
