FORTUNE — What will the economy and the stock market do between now and the election? Simple question gets a simple answer: Who knows. That may not be a very satisfying response, but it does have the virtue of being true. Now that I’ve stated the obvious, I can point to some other facts that sometimes get lost in all the noise—and make a supposition or two. Sometimes it’s helpful to take a step back and not get caught up in every economic twitch.
First, we are still in a long, slow, uneven recovery from the biggest (we hope) economic downturn of our lifetimes. Of course it will take time and be fitful. We should also remember that while the U.S. is slowly climbing out the Great Recession, Europe is still mired in it. And while we thought China had largely dodged the downturn, now it too is being banged up by the ripple effect of the ‘08/’09 period, particularly by Europe’s tepid economy. (China of course also suffers from what I’ll call “holding-patternitis” as the nation is so focused on the leadership changeover occurring right now.)
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Second, you hear some Republicans saying, “Hey, no fair! Obama, Geithner and Bernanke are doing everything in their power to pump up the economy.” Really? Is it only self-interest that compels the President, the Treasury Secretary and the head of the Federal Reserve to try to stabilize and boost our economy? The point is these three are on the case every day before, during and after the election. You might not agree with their methods, but who doesn’t have the same ends in mind, i.e. our well-being. Only the most cynical partisan, that’s who. And by the way, I will make the same argument during the next Republican administration.
So what is going on right now with the economy? Well no question things have turned sour the second half of this year. But there are some bright spots. (Have you noticed the stock market is up 14% year to date?) Yes QE3 could make a difference and manufacturing may be perking up. But to me the biggie is housing. It is almost unassailable that the U.S. housing market is finally in recovery mode. About time. Depending on how you measure, we’ve been in a six-year decline. A recovery here is important for a number of reasons: First, housing is a huge piece of the economy and a big slice of many Americans’ net worth. Housing was also at the heart of the economic meltdown. And the housing market is important psychologically, i.e. for confidence. This hasn’t been lost on the market. The stock of homebuilder Lennar, for instance is up 75% year to date.
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Finally I would like to point out that the biggest problem the U.S. faces, and indeed this holds true for Europe and China, is not economic, but is instead political. In fact the bigger the political problem, it seems the bigger the economic problem. To wit: Europe’s political problems, i.e. the EU, are the most vexing, and it has the worst economy. The U.S. has a strong political system, but lately been afflicted with a serious case of gridlock. And when China affirms that Xi Jinping is the new lead horse, the country could be off to the races again. (Of course the situation in China is more complicated than that, I’m oversimplifying to make a point.)
So while we don’t know what the market and the economy will do between now and November 6, I think it helps to put our current situation into context.