Some economic leaders leaning toward Obama
LONDON — As Election Day looms in the States, some leaders in this global financial hub are leaning toward Sen. Barack Obama with hopes that his economic policies can help lift the world out of its fiscal doldrums.
It’s an about-face for the business people who have generally favored traditional Republican policies of less government regulation and oversight of world corporate finance.
The move toward Obama in some overseas business quarters stems from bleak economic realities worldwide and the substance of each candidate’s financial prescriptions, according to Joe Lampel, a professor of strategy at City University London’s Cass Business School.
"In the City currently, the great fear is of massive financial failure in the U.S. of banks or other financial institutions which will undermine their counterparts here and elsewhere," Lampel said.
It’s by no means a universal consensus, but "Obama is viewed with greater favor," he said.
In particular, Obama earned endorsements from the Financial Times and The Economist last month.
"In responding to the economic emergency, Mr. Obama has again impressed — not by advancing solutions of his own, but in displaying a calm and methodical disposition, and in seeking the best advice," the Financial Times wrote in its Oct. 26 endorsement. "Mr. McCain’s hasty half-baked interventions were unnerving when they were not beside the point."
Among other global finance concerns, the ballooning U.S. budget deficit worries European business leaders because the dollar is the world’s reserve currency, Lampel said.
U.S. deficit spending results in a weaker dollar on the global stage, which can appreciate currencies like the euro. This currency appreciation against the dollar makes exports more expensive for these countries, resulting in lower economic growth and job loss over time, Lampel said.
Obama’s stated willingness to raise taxes on Americans making more than $250,000 signals that he’s serious about fiscal prudence, Lampel said.
"Whether he’ll be able to do it, we don’t know," he said.
Ayse Dickson, who recently retired from the investment banking business, said Obama is a better pick in the eyes of London’s business world because deregulation in the past decade harmed England and the U.S., and hedge funds were never regulated at all.
McCain would follow President Bush’s economic plans, she said, and the global financial markets don’t need more of the same.
If the world’s economic forecast wasn’t so dire, business leaders might be inclined to follow a conservative candidate and the promise of less regulation in the name of policy continuity, she said. But combine today’s reality with inaction by the Bush administration, and financiers are looking for other options.
The candidates’ economic plans have become just as important to global business leaders as they are to voters in the States, and victory may lie with the candidate who can better sell a plan to get things back on track financially, Lampel said.
"It looks to me that Obama can project that," he said.