What impact will last Tuesday's election results have on the US economy? Not much. With the economy heading south -- led by a deflating housing market -- there is little that Congress will be able to do to help. But history suggests that the economy would be better off with a Democrat as the victor of the just begun 2008 presidential race.

After my posts last week on the relatively weak performance of the Bush stock market and the investment implications of nominating Robert Gates as Secretary of Defense, several radio stations contacted me for my views on how a Democratic Congress would influence the economy. To prepare for these interviews, I've updated an analysis produced two years ago by Forbes -- not a liberal magazine -- which I used during a TV appearance on Wall $treet Week in July 2004. And I've tried to analyze the current forces likely to drive politics in the next two years along with interviews regarding the Democratic agenda.

Although Democrats will control Congress, they lack sufficient power for a Democratic agenda to take hold now. If the Democrats propose legislation which he doesn't like, Bush can veto it and Congress might not muster the two-thirds majority needed to override the veto. Moreover, with Bush trying to salvage his legacy and politicians from both sides of the aisle preparing for 2008 presidential runs, there is little -- beyond a possible increase in the minimum wage -- that is likely to change. Finally, GDP growth has been slowing throughout 2006, from 5.6% to 2.6% to 1.6% between the first and third quarters. This slowing trend will likely continue -- overpowering any policy initiatives that might emerge from Washington.

To put the current situation in a broader historical context, an analysis of post-war presidents and prosperity suggests that Democrats are better for the economy than Republicans. How so?