Woke up this morning after a great election night and realized that my class papers are still due this week. Welp...
Control of the House, of course, will remain with Republicans, though not without losing several seats. Eight of the 12 undecided seats are projected to go to Democrats as of this afternoon (AZ-9, AZ-1, CA-7, CA-36, CA-52, FL-18, NC-7, UT-4). LA Times is reporting that of the 87 Republican freshmen in that election, just nine have lost their bids for a second term at last count. There is a common perception that the freshman class was stocked with Tea Party-ers, but just 19 of 87 GOP freshmen joined the Tea Party Caucus after the 2010 landslide. Two freshmen Democrats, Reps. Mark Critz of Pennsylvania and Kathy Hochul of western New York, also lost last night.
Of the 60 members of the Tea Party Caucus, 46 have already clinched victory. Four others, including Michelle Bachmann and Allen West, remain in races too close to call - though Bachmann is expected to keep her seat while West may lose by a narrow margin of only several thousand votes. Six Tea Party caucus members were defeated at the polls, plus another seven who retired, lost a primary or sought higher office. Both tea party candidates who ran for the Senate, Reps. Denny Rehberg of Montana and Todd Akin of Missouri lost, while Rep. Mike Pence won his bid for governor of Indiana.
The market this morning saw a deep and sudden drop in stocks, and pundits have blamed Obama's re-election or the continued Republican control of the House. As always, it's more complicated than that. The European Commission released its economic outlook this morning with several lowered projection for Europe's recovery, including bad more news for Spain and a slump in the euro continuing into 2013. But that appears to be more an issue of bad timing than the core cause of the tumble in prices. Some markets such as fossil-based energies and health care (the parts not on board with Obamacare) are reacting to Obama's second election, but that also doesn't explain the size and breadth of the dip. Investors overall seem to be responding more to the looming "fiscal cliff" that Congress has yet to address, writes Jonathan Cheng of the WSJ, and the now-apparent fact that the arrangement of the House-Senate-White House will be the same as it was the last time we almost drove our finances and economy off of a cliff. The uncertainty surrounding the government's ability to avoid sequestration in January - that brutal automatic cuts that will triggered if no compromise is made by the new year - will only be resolved if some political factor has changed (like the tea party mandate, or senate democrats willingness to make changes to medicare), and the new Congress and the president can finally work together.