Yesterday's election marks the end of a string of economy-destroying ideas that stretch back to 1980. America rejected the idea that it's right to run a government of the rich for the rich. It figured out that when you cut taxes for the top 1%, run record deficits, double the national debt, and eliminate regulation, you don't get trickle down, you get meltdown. Barack Obama's election means that these ideas are history.

What will replace them? Obama has already discussed economic stimulus, middle class tax cuts, mortgage modification, a moratorium on foreclosures, infrastructure spending, wider health care coverage, and investment in alternative energy.

But the 43rd president left Obama with a challenge -- to figure out the underlying problems with the current financial system and rebuild it in a way that will work in the short and longer term. Obama must come up with new ideas on which to rebuild the crumbling ruins he's inheriting.

To do that, he will create a team of experts from both parties. That team should analyze the sources of the problems that beset the economy and financial system. And it must agree on principles which can be used to craft legislation that will rebuild the financial system. As I've posted, I believe what they'll find is the need to create a system that ends securitization. limits leverage, delivers transparency, ties compensation not to deal size but to long-term profitability, and builds firewalls between markets around the world.

Investors may not support Barack Obama, but they do expect him to be the next president of the United States. The smart ones do anyway.

If the polls are to be believed, Obama should easily defeat John McCain. Even the ultra-conservative talking heads on CNBC seem to have accepted this reality. Carl Quintinilla recently asked Pennyslvania Senator Bob Casey whether Obama will be "pulled to the left" if the Democrats win in a landslide. Why not ask Casey, who is pretty conservative as Democrats go, about Obama's five-year plan? I guess it's no surprise that the business network has Steve Forbes as a guest host on "Squawk Box." The Arizona senator needs all of the help he can get.

The market already -- wrongly in my view -- views Obama as a tax-and-spend liberal ready to suck away their capital gains and wrap America in bubble wrap to protect it from the ravages of world trade. The truth is more complex than these stereotypes. Obama plans to cut taxes for most Americans and favors fair trade policies. Markets, however, anticipate the future and people are scared. That explains why the Dow Jones industrial average is down more than 29%.

I realize that it's not a reason to pick a president, but if you care about your stock portfolio, you'd be better off with a Democratic president. How so? Peter Siris of Guerrilla Capital has run some numbers -- comparing an investment of $10,000 in the S&P 500 under Republican administrations to the same investment under Democratic ones. He permitted me to preview these numbers which will run in his New York Post column on November 3rd.

Since 1929 both parties have controlled the White House for 40 years and Siris estimates that the $10,000 would be worth $11,733 under Republican administrations and $300,671 under Democratic ones. According to Siris, "for whatever reason, Republicans have been in office during the three worst stock market declines: The Great Depression, the early to mid-1970s, and the current market."

That may sound interesting but what about recent presidents? Under the Clinton administration, the S&P 500 rose the most in the last 60 years -- up an average of 17.4% per year. The only president who posted a negative performance is a familiar name -- George W. Bush -- under his administration, the S&P 500 has fallen 27% from 1,342 to 979. It's an exceptional record and one that I hope will never recur.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

The global stock markets have lost $29 trillion dollars in the last year, cutting the average stock in half. But that's no reason for despair. Alaska governor Sarah Palin is running for vice president and she does not need to use her own money to pay for her liberal, elitist, anti-American, terrorist, gotcha-journalism wardrobe makeover or to fly her children around with her on junkets.

For that, she is confidently charging the Republican National Committee and the taxpayers of Alaska. How so? The RNC paid $49,425 for shopping sprees at Saks Fifth Avenue in St. Louis and New York; $75,062 for her to shop at Neiman Marcus in Minneapolis; and $4,716 on Palin's hair and makeup through September.

That's not all though. Alaska paid $21,012 for personal junkets like hotel and commercial flights so her three daughters could join Palin to watch the first dude in a snowmobile race, and a trip to New York, where the Palin attended a five-hour conference and stayed with daughter Bristol for four nights in a luxury hotel.

New York Sen. Charles Schumer must be feeling pretty giddy these days. As head of the Democratic Senatorial Campaign Committee, the New York Democrat may be on the verge of delivering a filibuster-proof majority for his party with potential pick-ups in such formerly reliably red states as Virginia, Kentucky and Mississippi. But now he's gone even further predicting that his party's presidential candidate Barack Obama would capture the White House with more than 300 electoral college votes. That's huge.

That's 30 more than Obama needs to win. By contrast, George W. Bush beat John Kerry in 2004 in the electoral college by 284 to 251. I am not sure whether any president has won the White House by such a large margin. But even by the standards of political hyperbole, this is a pretty grandiose claim. What's more amazing is that Schumer's Republican counterpart, John Ensign of Nevada, more or less agreed with him.

Speaking at the same National Press Club event as Schumer, Ensign said, "I don't think that there's any question that it's a tough election atmosphere for Republicans." The Republican went on to say that it's "possible" that the Democrats would win 60 seats. Faint praise for Republican candidate John McCain indeed.

Remarks like that probably send shivers up the spines of economic conservatives. The Wall Street Journal has warned about the dangers of the Democrats gaining control over the White House and the legislative branch. I don't think the world is coming to an end but I agree that concentrating too much power in the hands of one party may not be a good thing.

The growing power of the Democrats will play an important role in shaping major legislation such as the second economic stimulus package and any assistance to homeowners hurt by the housing crisis. We are entering uncharted and potentially dangerous waters.

Republicans and my colleague Aaron Katsman are trying to blame Democrat Barack Obama for rising gas prices. This is election-year politics at its worst.

For one thing, as the Washington Post and other independent observers note, drilling for more oil will do little to alleviate the pain U.S. drivers are feeling at the pump. The available supplies are probably not going to make much of a dent in our never-ending thirst for the black gold. Remember, the oil may not be as easy to get or cheap to process.

"Drilling off the coasts would increase U.S. oil production but have no short-term impact on gas prices," the Post says. "While some analysts disagree, an Energy Department report last year said production would not start until 2017 and have no 'significant' effect on prices or supplies until 2030."

An even more ridiculous idea floated by Republican John McCain is the so-called gas tax holiday, which has been roundly denounced by economists and Obama as a dangerous economic gimmick. Experts estimate that it would save the average consumer a whopping $30.

In November, Barack Obama will be elected president. People are fed up with George Bush and the Republican candidate wants to continue his policies -- tax cuts for the rich (even though he opposed them before), 100-year war in Iraq, etc. Americans know we can't afford a third Bush term.

President Obama will offer a middle class tax cut and raise the capital gains rate. This change will put more money into the pockets of consumers which account for 70% of GDP growth. And it will help balance the budget -- Bush's tax cuts have helped hit a record $410 billion deficit. Obama will also veto earmarks and implement pay-go rules which require a balanced budget.

These fiscally sound policies will strengthen the dollar which will help drop the price of gasoline and food. Obama will also create incentives to encourage investment in alternative energy. America knows that high oil prices enrich the enemy -- 15 of 19 9/11 hijackers were from Saudi Arabia -- our second biggest oil supplier. The sooner we can free ourselves of that devil's bargain, the safer we'll be.

For the sake of our economy, January 2009 can't arrive soon enough.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

I never thought I'd be doing a post praising John McCain's wisdom, but here goes.

In the midst of calls from members of both parties for a big government intervention in the mortgage crisis, John McCain said in a speech in Los Angeles that "it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers."

Exactly -- Senator McCain is saying what needs to be said but isn't being said because of election-year politics. Democrats and some Republicans appear to be making a bet that you will win very few votes by saying that some people should lose their homes.

He added that "Some Americans bought homes they couldn't afford, betting that rising prices would make it easier to refinance later at more affordable rates ... Of those 80 million homeowners, only 55 million have a mortgage at all, and 51 million homeowners are doing what is necessary - working a second job, skipping a vacation and managing their budgets to make their payments on time. That leaves us with a puzzling situation: how could 4 million mortgages cause this much trouble for us all?"