.If the elections in November look like they are going to go bad for the Democrats, I figure that Obama will just push the Congress to enact an extension of most of the Bush tax cuts (along with some increases for the wealthy in order to feed the class-envy engine).
The lack of certainty regarding what is going to happen to taxes on January 1st is a big drag on the economy and the stock market. A positive announcement of an extension will dramatically improve both -- and decrease the number of Democrats that will be kicked out.
Once the election is over, it is back to business as usual. Expect major tax increases in the first half of 2011, along with another economic dump.
Unless the Republicans take over.
Friday UPDATE: Others see this happening too:
"Congress and the White House may throw a curveball and roll out a tax cut ahead of the midterm elections rather than boost stimulus spending to aid the struggling economy, Harvard University History and Business Professor Niall Ferguson told CNBC Friday."