Back when Ronald Reagan beat Jimmy Carter, who currently has better stats than Barack Obama, there was one catastrophic outcome. I remember this because a large number of my previously rich relatives suddenly became the poor side of the family as the young solar industry collapsed without them. This almost feels like déjà vu as clearly a Mitt Romney win would have an adverse impact on the solar industry, but given what happened between the Obama administration and First Solar (in financial trouble), Abound Solar (failed) and Solyndra (failed), this is happening regardless as China takes over this market.
And now the administration is applying tariffs (taxes) to the Chinese solar industry, which actually works against solar adoption, and Romney being against taxes, will likely kill this effort suggesting he could save solar alternative energy use in the U.S., albeit save it for China. Go figure. Though, when you factor in subsidies even this outcome becomes muddier.
Depending on which candidate wins, a number of industries could actually benefit or be hurt by the result.
Traditional and Alternative Energy (Solar)
As noted above, the U.S. solar industry is dying and Andy Grove, who warned this would happen and tried to engage the Obama administration to prevent it, was disappointingly ineffective. At least he tried along with a lot of ex-Intel folks and a number of sitting CEOs, but to no avail. It is likely most solar production will move to China regardless of who wins and that will make the U.S. more dependent on China over time.
Romney would likely kill both the tariffs on solar and the subsidies, but China is expert at driving down prices and knows it is more important to keep plants running and fully staffed than it is to make profits, and the Chinese government is rolling in underutilized capital. In addition, it is competing with the U.S. to acquire traditional resources and if it were to subsidize its own panels, assuming it wasn't fined for dumping by doing it (which is happening now), it reduces the competition for the oil it needs, driving down its own energy prices and it keeps its plants operating at capacity and workers happy. (When workers get unhappy in China, they tend to revolt, which traditionally has had rather catastrophic outcomes for the deposed leaders.)
Romney would also likely increase domestic oil production, which would force China to lower prices even more to compete with traditional energy and further lower oil prices overall, suggesting the Chinese government would get even lower oil prices unless the oil-producing nations, as they have in the past, acted as a cartel to hold prices steady.
So while the U.S. solar industry is already collapsing and Obama is unable and Romney is unwilling to save it, if Romney wins energy prices (both for traditional and solar) should drop significantly as a result. Given the drop will be the result of increased domestic production, both the U.S. oil industry and the solar panel installation and maintenance providers should benefit more if Romney wins over Obama.
Currently, the U.S. electric car industry is led by Tesla and it has been the big beneficiary of electric car subsidies. Its latest car, the Tesla S, was able to drop below $50K due to the government subsides provided for it. Obama would likely continue these subsidies were he re-elected and Romney would likely discontinue them. Eliminating the subsidies near-term would hurt Tesla, the electric car market leader, significantly and likely kill off the other electric car firms coming to market.
However, Asian companies are getting local funding and have a more severe gas problem than the U.S. does, suggesting this industry wouldn’t entirely die out, but would simply move to Asia with Japan and China taking the lead for building new electric cars. This would help drive prices down for these cars if Romney were elected, while driving the jobs overseas.
So if Obama is re-elected, prices for electric cars would likely stabilize and firms like Tesla would remain relatively healthy. If Romney wins, prices would drop earlier, but Tesla and the related jobs would move overseas; however, those selling, servicing and insuring electric cars would benefit along with those Asian firms.
Programs like the high-speed rail are unlikely to survive if Romney is elected and this would have a short-term and potentially severe impact on local jobs. But it is unlikely these programs will survive until completion anyway given the length of time it will take to complete them and the likely changes in the administrations over the decade or so it will take to do so. Currently, the technology being used is mostly out of date so it won’t benefit the U.S. rail car and engine manufacturing industry long term. In contrast, China has more advanced technology (like Mag-Lev) and it is already marketing it all over the world. In fact, looking at what China is doing here compared to the U.S. makes me a little ill.
Google, the most aggressive firm backing self-driving cars is more aligned with Obama than Romney, but it increasingly appears more of a problem for the current administration than an asset. As a result, there doesn’t appear to be any assistance coming in from the U.S. government to help with it. Romney doesn’t appear interested yet and, thanks to these search results, likely isn’t a big Google fan. Post-election, should Obama prevail, he is likely to warm to Google again and become a supporter of this effort; Romney is much less likely to do this.
Despite Romney’s Bain Capital history, he is unlikely to promote offshoring any jobs. Over his political career, he has proven astute at providing what his constituents want and the folks who vote are a major portion of his political base. However, he would be far more willing to allow companies to offshore in order to maintain profitability and that would put him between a rock and a hard place unless he provides incentives for firms to hire locally. This would seem the likely path to making both groups happy and Romney, who flips positions with the political wind, is more likely than Obama to take this route.
Obama is more focused on saving manufacturing jobs than on saving IT jobs and he takes partial credit for keeping the U.S. auto industry from going under and for returning its strength. IT jobs in general would likely be better protected by Romney’s broader approach unless they are in manufacturing companies where Obama will be more focused and likely see the best results.
Wrapping Up: Who Wins?
Calling this is still more of a flip of the coin at this point, but typically being the most charismatic and the incumbent provides the strongest advantages in a U.S. election and both currently favor Obama, but a major scandal ("Fast and Furious") or misstep (Iraq becoming another Iran), would change this outcome and both are likely. Add to this the worsening economic news and a related need for change, I give Romney the edge today, but we are months away from election and Romney could still have a Sarah Palin moment and knock himself out of the race.