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I am so glad that election season is over. Campaign appeals crowded the music on my radio, crowded my favorite TV channels, and crowded the landscape in our neighborhood. Bring back the detergent ads, will you?

Election season has gotten a lot longer and more expensive over the years. It now lasts almost 18 months, and a recent estimate placed a $5.8 billion price tag on the Presidential and Congressional campaigns. I will leave it to you to determine whether the investment was productive.

At the end of that long trail of time and money, President Obama was re-elected in a close vote. The margin, while small, was sufficient to head off recounts and battles over the legitimacy of ballots. (An extended stalemate would have been very challenging for our markets and for our national credibility.) The President won both the popular vote and the electoral vote; some had expected a split decision which would have made it hard to govern.

The composition of the new Congress will be very similar to the old one, at least in terms of party affiliation. House Speaker Boehner was quick to observe that his body had received a mandate from voters no less significant than the President received.

The close of the polls is not the end of the story, though. The victors will now enter what promises to be a very crucial chapter in our economic history. The timeline for the weeks ahead looks something like this:

November 13:         Freshmen elected to Congress arrive in Washington

November 14:         Congressional leadership elections

November 17-26   Thanksgiving recess

December 15        Tentative beginning of Holiday Recess

January 3             113th Congress seated

What this suggests is that it may be another several weeks before serious fiscal discussions can begin. And even if the lame duck session is extended past somewhat past December 15, there will not be a lot of time to tackle issues on which consensus has proven elusive.

In the aftermath of the election, here are some things that we’ll be watching for.

• Action on the fiscal cliff. Will the two sides retreat to their corners and plot to undermine the other, or will there be meaningful movement towards compromise? Investors and business people have spent a good bit of time in a holding pattern awaiting clarity on fiscal issues, and further delays will be detrimental to economic performance.
  
  Given the timeline above, and the risk to those who might openly favor compromise, it may be some time before we know if there is movement. We expect agreement on several issues in the short-term, with broad tax and entitlement reform deferred. The biggest cans of them all are likely to get kicked down the street.
  
  
• Key cabinet appointments. Most observers think that Treasury Secretary Tim Geithner will conclude his service at the end of this year. His successor will inherit the responsibility for managing the national debt through the fiscal cliff discussions, and for closing a long list of open regulatory issues.
  
  
• Selection of Congressional leaders. Both parties have harder fringes and more moderate centers. The choice of leaders could signal how tough a stand each side will take in upcoming negotiations.
  
  
• Signals on Fed leadership. While Chairman Bernanke’s term at the helm has more than a year to run, the administration will likely give thought to the position in its early months. Soliciting the Chairman’s intentions will be a good first step; if he is open to staying, the appointment will likely not be twelve months in coming.
  
  
• Local impacts. While lost in the mania which surrounded the Presidential race, the outcome of local elections and ballot initiatives will have important consequences. While overlooked in all of the discussions of national issues, state and local budgets are under tremendous pressure and threaten the vitality of the economic expansion.
  
  
• We continue to think that the size of the stakes and the distance until the next election make an accord between Congress and the President possible. Without one, we could be looking at a very challenging year ahead for the economy. We already have to overcome the loss of all that campaign spending.