It sets us up for a couple more months of policy gridlock, at a minimum.

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In politics, the consequences are policy gridlock.

FORBES: Connect

Such competition, as in business, usefully disciplines the public sector, even as it can lead to policy gridlock (as noted about India in this space last issue.) And the competition is real: Around the world we see a remarkable number of closely fought elections with high stakes.

FORBES: Seesaw Balloting

Yet the economy, and the stock market, faces important obstacles, including a flare up of the European sovereign debt crisis, tight fiscal policy, and the potential of further gridlock in Washington.

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The timing gives governors, especially those jockeying to be seen as leaders of their respective parties, the chance to point to their stewardship of tight state budgets and policy agendas as Washington is mired in gridlock.

WSJ: New generation of governors seeking the limelight

But the case for gridlock can be less convincing when it comes to foreign policy.

ECONOMIST: Christopher Cox and the Chinese dance

Policy uncertainty has diminished in the aftermath of the elections, but gridlock in Washington is as real a possibility as it was in 2011 during the debt ceiling debate.

FORBES: Romney's Defeat Means Treasuries May Fall Below 1.5% On Fiscal Cliff And Bernanke