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Wells Fargo chief portfolio strategist Brian Jacobsen argues government policy and uncertainty is serving as the biggest drag to the U.S. economy.
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He's downgrading 28 Spanish banks yesterday did the same to the Spanish government earlier in the month despite all that fell.
Our first guest here on markets now today says the problem for us here the United States isn't necessarily.
Europe.
It's our own politics Brian Jacobson chief.
Strategist at wells Fargo's you're not in the blame Europe -- it seems so easy for.
-- -- maybe Europe and they're like the whipping boys these days and you can either blame the weather you can blame Europe but really I think that would face the biggest obstacles facing our economy this economic recovery is really coming out of Washington DC just the policy paralysis the fact that we don't have any -- -- to what the tax code is going to be like next year.
I think a lot of that is actually serving as a significant economic drag on the US economy he think about exports of the United States to Europe to the European Union.
In goods it only -- about one point 75% of our gross domestic product so even if you airport closed down which they're I don't think they're going to do.
If we don't we have an economic -- -- about a two percentage points but yet that tax increases that could hit the US economy could service probably three percentage point economic -- Part of that obviously is what happens in congress and it could happen before the presidential election but the betting is that -- should look at the growth credit -- the United States but the other part obviously in an election year.
Is what happens in the presidential race we had this poll yesterday we talked about.
And it was kind of interesting it showed basically six in ten people if he did a poll six in ten people didn't care who won the election.
-- their view was it didn't matter for the economy.
Do you think that's true because or did you think it just matters that we have an election and get past it or does it matter more who wins for economic growth.
Yes that's a great question and some people look at -- history of the stock market performance and say that -- on the market is usually up when a Democrat is in the White House and usually.
-- -- as -- -- not entire lighthouse but also the composition of the congress and the senate and I actually think that in terms of what matters more here.
Is who is in congress and who's in control the senate because really that's I think where the logjam is.
If President Obama is reelected or if we get governor Romney elected I think that pretty much they're going to take their cue from congress and so to me what really matters the elections that -- most are in the senate and the house.
However many years ago we probably would have agreed and it just wouldn't put out there as gospel that quote unquote gridlock is good in other words if there's a Republican in the in the White House -- And this -- democratic -- President Clinton and Nell.
Because there's so much if things -- so polarized is the opposite true that markets would be better served to have one party in control and get things done.
I think that it wouldn't it markets would be better served and I think the economy would be better served mainly gridlock is good provided you're on the right path -- if we're walking down the wrong -- -- -- problem is does that matter which party.
What is it just matter that you -- -- didn't go back to previous question.
Sure well I think that the policies matter more than the parties themselves and so I look at the underlying issues what are they advocating in terms of tax rates in the such.
And I really don't think that this is the appropriate time to be increasing anybody -- anything they anybody's taxes whether they're millionaires are not so that would be the Republican.
