The worst outcome in tomorrow’s Iowa caucuses for the stock market and economy would be victories by Mike Huckabee and John Edwards.
Both are anti-business, anti-Wall Street, and anti-CEO. They would employ government regulation, and perhaps taxes, to work against free-market forces.
Both are anti-trade. Both are tax-and-spend. (Governor Huckabee has tried to inoculate himself against the tax charge with his Fair Tax national sales tax idea that would go nowhere in Washington.)
The key point is that Edwards and Huckabee are the left-wing populists in the campaign on economic policy. Their victories would send up a red-flag warning signal to a stock market already beleaguered by worries about an economic slowdown and the ongoing subprime credit problem.