Election has negative impact on businesses

<p>While John McCain and Barack Obama tout their plans to fix the economy, local business people have been saying that the election itself is partly to blame for the economic downturn.</p><p>Business typically slows in an election year because of the uncertainty of who will win, they say, and picks up again when the election is over.</p><p>Adding to the problem this year is that the candidates have picked up on the constant doom and gloom reports about the economy as a campaign issue, further hurting consumer attitudes about spending, according to Jeff Davis, president of Falcon Financial Management.</p><p>Davis recommended after the stock market tanked in September that investors wait out the election before making any decisions about reallocating their portfolios because the market typically rallies after an election, as it did in 1992, 1996 and 2004.</p><p>"It doesn't matter who wins the election," he said. "All the market is looking for is certainty. Fifty percent of the country is ecstatic, 50 percent is unhappy. Today, 100 percent is unhappy."</p><p>J. Parrish, president of Coldwell Banker/M.M. Parrish Realtors, speculated in September that Election Day may bring the bottom of the local housing market and the start of the turnaround.</p><p>"It's the known versus the unknown," he said. "You can deal with whoever wins so long as you know what the situation is going to be."</p><p>Christopher Conner, certified financial planner with Cornerstone Financial Group, is less optimistic that the stock market will rally after the election.</p><p>"The market's concerned about both a Republican or a Democrat getting in because neither have sufficiently addressed the deficit," he said.</p><p>A bigger deficit now puts the burden of paying interest and principal on future taxpayers, according to Jay Ritter, finance professor at the University of Florida Warrington College of Business.</p><p>Based on policy statements, Ritter said, an Obama administration is likely to have higher spending and higher personal taxes on investments.</p><p>Conner said losing capital gains tax protections could result in a shift from stocks to tax-free bonds.</p><p>Whoever wins could also determine how various subsectors of the economy will do.</p><p>"How will health care and pharmaceuticals do if Obama gets in and tries to do something with the health care system?" Conner said. "How do military investments do if McCain gets in?"</p>