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Last Updated: Friday, 5 November, 2004, 09:27 GMT
Bush's economic challenges
Stephen Evans
By Stephen Evans
BBC North America business correspondent

George W Bush
New day rising: the US awaits George W Bush's economic plans
Whatever else the US presidential election has done, it's got rid of a mass of uncertainty - and markets don't like uncertainty.

Stock prices jumped after the Bush victory but it's hard to know how much of that euphoria was because investors think Bush will be better than Kerry, and how much it was simply a gasp of relief that we now know where we stand.

Some bits of the economy are relieved, though. Detroit may be solidly Democratic but some auto-maker executives were worried that Mr Kerry would have been a lot tougher on emission standards than Mr Bush.

The Democratic challenger had recently sponsored a Senate measure that would have tightened the regulations and the auto companies feared he would enact such legislation from the White House.

Military suppliers had been worried by a Kerry victory - there was a sell-off of stock in defence companies when the exit polls falsely showed a strong Kerry performance.

The true test of whether Mr Bush is good for business will come with the fate of the economy. If he cuts spending to rein in the deficit, then growth may suffer

In truth, though, it is by no means clear that Democrats are more peaceable in office than Republicans.

Mr Kerry would have faced the same situation in Iraq and there is an argument that parties of the left sometimes have to prove their toughness whereas parties of the right don't. It's impossible to say.

Shares of military companies did rise on news of the Bush victory, but the euphoria could be short-lived.

While President Bush's re-election and the return of a Republican majority in Congress assure a robust approach to Pentagon spending, the growing budget deficit and the costs of the war in Iraq could put pressure on the Pentagon budget.

Tax plans

The other industries to benefit from a Bush victory are likely to be the health-care and pharmaceutical companies.

They gave $26m to the Republican election effort because they disliked Mr Kerry's plans to allow the government to bargain with drug makers for a better price for medicines for Medicare.

Mr Kerry would also have allowed cheaper drug imports from Canada.

Privatizing parts of the provision of pensions and social security might benefit financial companies. Mr Bush's tax plans are also likely to mean an easing - or not a Kerry tightening - of taxes on dividends.

In truth, though, this kind of calculation of gainers and losers is meaningless - or at least not as meaningful as it might seem.

If one candidate would bring more economic growth than the other, then it doesn't really matter which particular companies or sectors end up gaining or losing. Fast growth is good for all.

Sound strategies?

The true test of whether Mr Bush is good for business will come with the fate of the economy. If he cuts spending to rein in the deficit, then growth may suffer.

Individual business leaders tend to judge politicians by their policies for a particular industry (widget-makers like tax relief on widgets).

A better yard-stick would be how beneficial for the whole economy a party's policies might be (sound economic policies benefit everybody, including widget makers).

And whether Mr Bush's overall economic strategy is sound remains unproven.

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