One on One with Kim Wallace, Chief Political Strategist at Lehman Brothers
Tuesday, February 05, 2008SUSIE GHARIB: Today is the biggest primary day in U.S. history and it could be a defining one for the 2008 presidential race. Joining us now for analysis of what to expect, Kim Wallace, chief political strategist at Lehman Brothers. Hi, Kim.
KIM WALLACE, CHIEF POLITICAL STRATEGIST, LEHMAN BROTHERS: Hi, Susie.
GHARIB: So by tomorrow morning will we have a clear cut nominee for the Democrats and the Republicans?
WALLACE: I doubt it. I think by noon you'll know who won most of the delegates in the counting for today, but my sense is that the contest is going to go on through at least the first quarter, especially on the Democratic side, possibly on the Republican side.
GHARIB: Kim, as the nation's economic situation worsens, does that play in favor of any particular candidate?
WALLACE: Not really because all the candidates will soon be addressing the economy. On the Republican side, they've been slow to separate themselves from the Bush economic policies of the past six years, but my expectation is that will change quickly. On the Democratic side they've been talking about economic stimulus programs, but nothing like the magnitude that's being discussed in Washington now.
GHARIB: But in terms of any specific plans, we're seeing polls every day coming out saying that Americans are so concerned about the economy. Will we start getting some specifics from the candidates on their economic plans?
WALLACE: I doubt it. The piece you had in front of this interview shows why. Whether you're talking about the state of Maine or the state of Michigan, the jobs that are being lost or devalued are very difficult for Washington to address from the policy standpoint of fiscal tools.
GHARIB: Go ahead. Elaborate a little bit more on that.
WALLACE: It's just very difficult to confront what's going on in the global marketplace from Washington, DC through fiscal policy and hope to reverse the effects of the global marketplace in a short period of time.
GHARIB: So you don't see the candidates even addressing any issues like what to do about housing?
WALLACE: Well, they've started talking about housing, but not in a significant way. The administration has taken the lead there and thus far the administration has signaled that it's going to approach the housing situation by continuing to encourage the Fed to cut the Federal funds rate, to reform the FHA, the Federal Housing Authority and to also increase the loan limits at Fannie, Freddie and the FHA, so that people hopefully can refinance their loans at a better rate.
GHARIB: Usually there is a candidate that Wall Street and corporate America really favors. Is there someone this time that is a clear-cut person that Wall Street would like to see get elected?
WALLACE: I don't think there's any one clear-cut. They all appeal to the market in different ways. In terms of just pure market and economics, probably former Governor Romney would be the favorite of most of the Republicans in the market, but as I said before,, all of the candidates have a piece of Wall Street to which they appeal.
GHARIB: Well, just a little bit more about Mitt Romney. What it is about him that the business world finds attractive?
WALLACE: Two aspects of his life. I think one, his experience in the capital markets as a bank consultant, and then two, his chief executive experience in the state of Massachusetts and then his ability to manage the winter Olympics out of Salt Lake City.
GHARIB: What are you telling your clients and investors of how to handicap this election?
WALLACE: Don't bet early. One of the beautiful aspects of the 2008 electoral process is that it's wide open. We don't have an incumbent from the White House, that is a sitting president or vice president running on the ticket for the first time since 1952 on either side. That means that the candidates have had to go through a grueling process of introducing themselves, discussing some of the ideas that they'd like to implement when they get to the White House and exposing themselves to the process that we've seen unfold since Iowa. It's been very exacting.
GHARIB: All right. Thank you so much, Kim. We really appreciate you coming on the program.
WALLACE: Thank you, Susie.
GHARIB: My guest tonight, Kim Wallace, chief political strategist at Lehman Brothers.
