The markets are hunkered down not because of fears that Gore will pull it out, but because of the enormous uncertainty in the immediate future. Why take chances when it is more prudent to hedge? Especially given the possibility -- even if Bush seems the certain winner this afternoon when the recount is concluded -- that Gore's battalion of lawyers will proceed with their plan to challenge that outcome. Jack Quinn, one of the White House lawyers who defended the President in the impeachment process, last night said they are not simply in Florida to watch the recount, but to look for "tens of thousands of votes" that might be misplaced. If electoral war is declared in that fashion, Bush will probably be forced to push for recounts in Wisconsin and Iowa.
Against that ugly backdrop, what happens to the budget when Congress returns next week for a lame-duck session? My first thoughts yesterday were that the almost perfect equilibrium arranged by the electorate would produce more, not less, comity in the government, especially if Bush wins and can practice the kind of bipartisanship that brought him a landslide re-election victory in Texas in 1998. If Gore chooses to continue open, partisan war, as he appears to be doing at the moment, there will be much less chance for the budget process to complete itself with the tax changes being signed into law this year -- to take effect on January 1. Even if Bush wins, tax changes would be deferred to 2002. The loss would be only the first casualty of a Gore campaign to win in the courts with his trial lawyers what he could not quite produce with the voters.
It is really all up to Gore. The NYTimes today argues he does have a case to push, but warns him against pushing too hard. If he stops at just the right moment, which the country should know even if he doesn't, he will be in a perfect position to play the role of Shadow President over the next four years, and almost certainly get an automatic re-match with Bush. When presidential races have been this close before, the good loser usually has come back to win. Of course, Gore's lawyers will urge him to go all out, at $500 an hour for each of the 150 lawyers in his brigade. We have to assume there will be others -- including his supporters in the field -- who will find ways to advise him to accept the official results. As his campaign manager, Commerce Secretary Bill Daley, announced his displeasure with the work thusfar of the Florida election officials this afternoon, the indices on Wall Street dropped steadily.
In 1960, when Richard Nixon had good reason to believe the election had been stolen from him and that a recount in Illinois and challenges in Texas could prove that to be the case, he decided against that route. Most people remember him doing so because he did not wish to put the country through that meatgrinder, which would take many months. In his memoirs, Nixon reminds us he also did it for self-interest, knowing he would be cast as a sore loser and have his political career come to an end, certainly if he lost in his challenge. Vice President Gore, as young as he is, must be turning that thought over in his mind. If the matter is resolved satisfactorily, of course the dark clouds will part immediately, the budget will be whisked to the President in the lame-duck session, and an era of bipartisanship will commence.
P.S. If you are interested in my thoughts on Hillary Clinton's win, I have a memo on our website today, "Lazio's Crummy Campaign." http://www.polyconomics.com