DC gridlock is a good thing: Hank Smith

Yahoo Finance

A poll released yesterday from the Wall Street Journal and NBC News says that 76% of American’s don’t think their children will be better off than they are. 71% of those polled say they don’t think the country is headed in the right direction.

Yahoo Finance asked Hank Smith, chief investment officer at Haverford to weigh in on these numbers

“Doesn’t everyone in each generation say ‘I’m worried about the next generation having it as good as we do?’” Smith says. “That’s just human nature”

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Smith contends, given headlines full of doom and gloom have gotten the best of the American public and numbers like these are just the result of this mental state.

“I think you have to trust that innovation, technology is going to be in place to make this next generation have it better than we do,” Smith says.

Still, if Americans truly believe the country is headed in the wrong direction there is a little election coming up that will allow them to do something about it.

“The founding fathers got this right,” Smith says, referencing the fact that members of the House of Representatives only serve a two year term. “Despite all the money that goes into politics it means the needle can’t get stuck at one extreme for that long,” he argues.

Americans, however, have a track record of complaining about their leaders, especially Congress, and giving them a pass come election time. So what if the next Congress is a unproductive as this one?

“I think gridlock is good for the economy because it creates more certainty,” Smith says. He points to legislation like Dodd Frank causing more confusion than it does reform. “We don’t even know what’s going to be written let alone trying to interpret what has been written.”

And through it all, despite bad headlines, gridlock in Washington and an American public pessimistic about their future, Smith believes “corporate America is the shining star coming out of the financial crisis and recession.”

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