Which Stocks Could Win, Lose in Election

Editor's note: This column by Doug Kass is a special bonus for RealMoney readers. It first appeared on Street Insight on Nov. 6 at 8:16 a.m. To sign up for Street Insight, where you can read Kass' commentary in real time, please click here.

It's been a season of unusually hateful and offensive attack campaigns filled with tiresome cliches by both parties, in which every gaffe or outrageous TV ad immediately appears for all to watch on YouTube (most notably in Tennessee, New York, Massachusetts and New Jersey).

Voters are disillusioned with these campaigns, and there are increasingly anti-big-business sentiments, a hunger for change reflecting the economic anxiety facing middle-income and working-class Americans and a growing unpopularity of the war in Iraq. As a result, the general turnout tomorrow will be relatively low by historic standards and will be skewed substantially toward a better turnout among Democrats vs. Republicans.

Stated simply, the Democrats are energized, while the Republicans are not. (This is particularly true for the religious right.) In marked contrast to 2004, the lack of participation by the conservative wing of the Republican Party (after a succession of moral issues with former Rep. Mark Foley and now Rev. Ted Haggard) suggests that the schism between "profit and pulpit" within the GOP will be the most significant single development affecting the 2006 campaign.

Republican Party on the Defensive

The 2006 election will be a referendum on the economy and on Iraq. Inflation in food prices, tuition expenses, health insurance premiums, sky-high home insurance premiums and the loss of American jobs (according to the AFL-CIO, 40,000 U.S. plants have been closed and about 3 million manufacturing jobs have been lost) seem likely to strike a chord with the electorate.