Why the US election is a cliff-hanger for all of us

The older families in Washington are known as "cave dwellers". In this town of insiders it is hard to break through that social barrier, but one woman from the Mid-West, Marjorie Post, did it, and the best view of the Washington Monument is now to be had from her lawn. Marjorie made General Foods the conglomerate it is today; it was she who had the bright idea of buying Mr Birdseye's backyard frosting business, and turning it into something big. It is worth wondering why a woman of such consequently colossal wealth became so fervent a Democrat.

The older families in Washington are known as "cave dwellers". In this town of insiders it is hard to break through that social barrier, but one woman from the Mid-West, Marjorie Post, did it, and the best view of the Washington Monument is now to be had from her lawn. Marjorie made General Foods the conglomerate it is today; it was she who had the bright idea of buying Mr Birdseye's backyard frosting business, and turning it into something big. It is worth wondering why a woman of such consequently colossal wealth became so fervent a Democrat.

With the divisive politics we are used to in the UK, it is often said that there is little difference between Democrats and Republicans. I've spent the last fortnight in the bosom of the Democratic camp in Washington, New York and Florida. While the point may or may not have been true in the past, I believe this election is different. It has been fought on a very real battle line - a budget surplus which can either be given away in tax cuts or used to target social spending. This is a real choice, and the outcome must have significant implications for all of us.

It wasn't until the end of this week that there seemed to be much interest at all in the markets. Balanced analysis is never helped by the fact that Wall Street is so solidly Republican. Apart from the likes of Lawrence Fish, the chief executive of Citizens' Financial (owned by our own Royal Bank of Scotland), there aren't too many Marjories around these days.

What interest there has been in the market has been stock-specific. Wall Street has a long list of Bush stocks - i.e. the companies that would do well from a Republican victory. This list includes most of the drug stocks (already up 40 per cent from their March low as Bush crept up in the opinion polls), as well as tobacco and defence stocks. The Gore list is a bit shorter - confined to a handful of financial stocks, like Fannie Mae, who are thought to have a special relationship with the Democratic Treasury.

Overwhelmingly, there has been a tacit assumption that the market, indeed business in general, would do best from a Republican victory. This might seem a bit unfair, given that we are in the midst of unparalleled prosperity and fiscal stability, but the Republican line is that this is all down to "St Alan" (Greenspan) at the Fed.

Nevertheless, it is surely worth questioning precisely what the effect of Bush's fiscal proposals would be. His desire to increase defence spending and cut taxes significantly has certainly led to a queasy bond market. One observer has even gone as far as saying that the era of tight fiscal discipline could now be over and interest rates on the way up. The alternative of a Democratic president and a Republican congress would instead lead to a combative partisan process that could force fiscal restraint.

It never ceases to amaze me that America, the richest nation on Earth, contains some of the worst examples of public squalor. This is most true of the God-less "boros" that surround New York - the housing "projects" with levels of poverty that would not seem out of place in the Third World. It is clear also in the weak infrastructure and the compromised health service. It is even true of an educational system that by many measures delivers a level of education lower than that of every other First World country (take the 30 per cent of Americans who can't find the US on a globe). This is the real issue confronting America today - public squalor in the midst of private affluence.

The endless commentators who observe that it doesn't matter who wins this election are missing this crucial point. Leaving aside the issue of fiscal discipline, social problems must inevitably have economic consequences - it's just a matter of time. Marjorie understood that. And in this era of globalisation, does anyone seriously doubt that where America leads, we will follow?

The state of Florida has come to hold the future of the States, if not the world, in its hands. I started this week in Palm Beach County, where the unfair balloting allegations are centred and where the social divide is clear. As we waited for Al Gore's final speech, I saw a well-fed Palm Beacher, chewing on his cigar, pull up in an open-top stretching half a block. Bush/Cheney posters were stuck all the way along the side. I thought of Gore's claim that the main beneficiaries of the proposed tax cuts would be those earning over $300,000 a year. Do they really need the money?