Submitted by Illinoisnoki1 on Tue, 08/17/2010 - 13:07

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The view from the Business Press suggests Obama is looking to redue Clinton's 1996 success in running against a Republican Congress.

By Joe Weisenthal, Business Insider

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Conventional wisdom is that markets like political gridlock, and so in theory investors should be cheering what seems increasingly likely to be a big GOP win in November. And by all accounts, the GOP will win at least in the House, as enthusiasm on the part of the GOP base is way higher than on the Democratic side.

As evidence, the losing candidates in some GOP primaries have been getting more votes than winning Democrats. 

But don't count on this being good for the economy -- at least not right away. Right now we still have a business and consumer sector thirsty for more stimulus, and it seems likely that a Republican sweep -- particularly a party with a mandate to cut the deficit – will usher in with it some kind of American version of austerity. (And don't hold your breath for tax cuts, because the administration still seems pretty clear that it's in no mood to keep the Bush tax cuts).

Of course, reforming the economy is a long-term project, and the benefits of lower spending and limited government interference in various markets will be good in the long-run.

Either way, Obama won't by too upset if the GOP has a election. It took the Newt Gingrich revolution of '94 to give Clinton the opposition he needed to revive his fortunes. Obama will be happy to face off directly against the GOP, especially if it's a party with a lot of Tea Party-like folks at the top.