Sunday, October 31, 2010

Carnival of Divided Government
Tres et Quadrâgintâ (XLIII)
Special Scary Halloween Edition

Welcome to the 43rd edition of the Carnival of Divided Government - The Special Last Carnival Before the Midterm Election Scary Halloween Edition. And what could be scarier than the Republicans back in majority control of Congress? Only one thing that I can think of... One Party Rule with either party in control of the executive and both legislative branches. That just creeps me out.

Since we are now posting the carnival more frequently to keep up with the accelerating blogospheric activity on this topic, we changed the format to make pulling this together a bit easier. The focus is on more quantity and not too much commentary. The idea is to see how many quality Divided Government references we can list since last weeks carnival. As it turns out, I cannot resist weighing in with comment or two of my own.

Carnival of Divided Government

As explained in earlier editions, we have adopted Latin ordinal numeration to impart a patina of gravitas reflecting the historical importance of the series. In this the Carnival of Divided Government Tres et quadrâgintâ (XLIII), as in all of the CODGOV editions, we select volunteers and draftees from the blogosphere and main stream media writing on the single topic of government divided between the major parties (leaving it to the reader to sort out volunteers from draftees). Consistent with this topic, the primary criteria for acceptance in the carnival is to explicitly use the words and/or concept of "divided government" in submitted posts. A criteria that, to our endless befuddlement, is ignored by many of the bloggers submitting posts, which sadly results in The Dividist reluctantly ignoring their fine submissions. Among the on-topic posts, essays and articles we choose ten or so of our favorites for commentary and consideration. We hope you enjoy these selections.

Jesse Zwick, writing in the Washington Independent, captures the new and old media gestalt this week with the headline"Debating the Virtues of a Divided Government":
"With most pundits predicting a GOP takeover, cue the debate about whether a divided government will produce some much-needed compromise or grind things to a halt. In the New York Times op-ed pages today, David Brooks argues that “the road map for his recovery is pretty straightforward,” while Paul Krugman’s main takeaway is, “Be afraid. Be very afraid."
To the surprise of no one, The Dividist weighed in on the increasing divided government debate, noting Krugman's absurd "partisan freakout", and "Defending Divided Government" against a new wave of attacks from lefty bloggers and academics.

Jame Moldenhauer writes a letter to the editor of the Las Vegas Sun, making the very reasonable assertion "A more divided government would be improvement":
"...from a personal-experience point of view, a divided government appears to be better for the country. In my lifetime (and I’m 60 years old), the best times in a variety of ways were the 1980s and 1990s, decades in which shared power was more the rule than the exception. I remember vividly the first two years of the Clinton administration. One party was in control of both the executive and legislative branches and we had hideous legislation and laughable appointees (sort of a mild, relatively innocuous precursor to the past 21 months). So, let’s have more divided government!"
Charles Rowley speculates on his blog about what happens if: "If Obama's coalition fold on November 2":
"Public choice suggests that Option 3 will not be chosen, by either President or by the GOP, because it offends against the principle of pandering to concentrated interests while offlaying the costs onto the dispersed general population. Sometimes, however, divided government succeeds where unified government cannot, in achieving welfare-enhancing outcomes."
Benson at Prudent Investor Newsletters offers more treats than tricks in a well footnoted post reviewing potential consequences of Tuesday's election in "Rebalancing Political Power And Possible Implications To The Financial Markets":
"And how should a divided government fare for the financial markets? Based on past performance, they would seem favourable... But if the chances of reduced government intervention in the economy are increased from a political gridlock, then the new political arrangement would likely boost business confidence, and thus becomes a positive influence, rather than undermine it. And only the politically blind and those addicted to unsustainable inflationary big government would see this as some fictitious horror tale. And as before, they will always miss out being right."

J.D. Tuccille of Disloyal Opposition found a way to make a good choice (voting for divided government) out of the two bad choices offered as his candidates for Congress in "I've already broken my campaign promise":
"I voted for the Republican douchebag over the Democrat harpy. I’m not enamored of Paul Gosar, who has positioned himself as a social conservative in addition to his au courant, Tea Partyish support for free markets and smaller government, but incumbent Ann Kirkpatrick voted for the porculus bill and Obamacare, and that’s really all I need to know about her. Basically, I voted for divided government that will occupy its time entertaining us with angry gridlock rather than hurrying us over the brink and into the abyss."
Anne Kornblut writing at the Washington Post quotes Governor Bill Richardson of New Mexico who finds a silver lining for Democrats while noting "Obama may follow Clinton's model"
"...some Obama defenders say the president should look to the previous Democratic president as a model. "I do see a similarity to the Clinton experience," said Gov. Bill Richardson of New Mexico, a Democrat. "The divided government result, if it happens, is good for the president, because he now has some potential enemies but he also has some potential partners to get things done where he didn't have them before." Using the dreaded "t-word," Richardson said: "It gives President Obama a chance to triangulate on several issues of importance that he's going to need to get through the next two years."
Steve Chapman makes the case for divided government by kicking off his Chicago Tribune column with the inverted adage that is the name of this blog, saying it is time to "Divide the power":
"Divided we stand, united we fall. I know, I've got the old adage backward. But when it comes to solving one of the biggest problems looming over the nation — the federal budget deficit — backward could be the best way to go...

Still, divided government offers tightwads grounds for hope. The biggest one is historical. William Niskanen of the libertarian Cato Institute, who headed the president's Council of Economic Advisers under Ronald Reagan, notes that over the past 60 years, federal spending has risen least when one party occupied the White House and the other had control of at least one house of Congress.

Why would that be? It can happen because the parties cooperate in attacking the deficit, as Democratic President Bill Clinton and Republican House Speaker Newt Gingrich did — producing the now-unimaginable feat of a budget surplus.Or it can happen because they disagree on giant undertakings, leaving them to wither on the vine. Niskanen says that when one party has all the power, our leaders are more likely to enact a huge new entitlement (like Medicare under President Lyndon B. Johnson and the Medicare prescription drug benefit under George W. Bush) or plunge into an endless war on the other side of the planet (again, Johnson and Bush)...

After all the angry charges and negative ads in this campaign, Americans may feel, with even more vehemence than usual, that they don't trust either party to exercise power responsibly. The only consolation is that with divided government, they don't have to.”
Ross at Ella's Deli is a bit disillusioned about the political process and election, but is applying that cynicism productively with a vote for divided government in "upcoming election...":
"I'm a fan of divided government and I really lost it with the Dems in the manner they rammed that bill through. So, having at least one house or both under the opposition's control is a good thing. HOWEVER, I have no faith that the Republicans will learn any lesson or be any different than they always are, new Tea Party candidates or not. I've always been disappointed when the other party seizes control and continues to be douchebags. No longer. Now I expect it. "
John Sides is at it again at The Monkey Cage and The Hill's Congress Blog, with his second entry in a week (Dividist response to first linked here) attacking the political foundation for supporting divided government. Here he wants to be sure that everyone knows that "Divided Government is bad for Obama":
"Divided government creates gridlock. And when it does produce legislation, the president finds that legislation much less palatable than if his party were in control. Divided government also fails to make both parties equally accountable. Obama will get less of what he wants and pretty much all the blame if the economy and country are still in the doldrums two years from now...

Indeed, the political scientist David Mayhew has found that landmark laws are no less likely under divided government than under unified government. But here's the problem: we can't just count the laws that passed. We have to know what didn't pass. Political scientist Sarah Binder's book Stalemate does exactly that. She measured both the size of the policy agenda and the number of agenda items that failed to be addressed with any enacted law. Divide the latter by the former and you have a measure of gridlock. Binder found that gridlock increases under divided government...

Given the long list of items on President Obama's ostensible agenda -- such as climate change and immigration, to name only two -- his policy goals will likely be harder to accomplish under divided government. Congress will propose and possibly send him more bills that he opposes, and gridlock will often prevail."
This post deserves a detailed response of it's own, and I may revisit this at some unspecified point in the future. But for now, a few points. Whether or not you agree with the conclusion in the title, it still begs the question of whether or not what is good for Obama is good for the country. Particularly since much of Side's argument revolve around the purely partisan political consideration of whether Obama's re-election chances are are enhanced or diminished with divided government.

A careful reading reveals an almost tautological flavor to Side's argument against divided government. He starts with an unstated premise that legislation preferred to enable the activist liberal policy agenda of the Obama adminstration is in fact good legislation and good for America. This premise leads to a conclusion that gridlock is bad, because it prevents the President from getting the legislation he wants. Shock.

If there is anything that should be clear from the precipitous decline of the Democrat's fortunes over the last two years, it is that most Americans disagree that the kind of legislation steamrolled by One Party Rule Democratic government is good legislation. In fact, not even Democrats or the President will stand up and say either Porkulus or Obamacare are good legislation. The best they'll say is something like "It's not perfect, but its the best we could do under the circumstances." Americans want better, or nothing. Blocking bad legislation is a positive benefit of Divided Government.

Another problem with the Sides/Blinder thesis is that it rests on a contra-factual argument: Divided government is bad, he claims, because the legislation that passes under divided government is not as good as the quantity and quality of imaginary legislation that we would have gotten under the One Party Rule that did not exist at the time. Really. That is what he is saying.

I'll also be very interested in seeing what Sides has to say about the virtues of divided government two years hence. I know what The Dividist will be saying. The Dividist will be supporting the re-election of Barack Obama (or perhaps a 3rd Party run by Mike Bloomberg), in order to head off the any possibility of One Party Republican Rule. I suspect that John sides will be singing from a different hymnbook in 2012, having rediscovered the benefits of divided government. Note to self: Bookmark this.

Jason at The American Maxim is also reading many of the same posts, takes note of the recent rash of attacks on the divided government voting heuristic, and also finds them unconvincing in "Bemoaning Gridlock Government... and over thinking it":
"American say they dislike divided government. They say it leads to political grandstanding leaving little time left to accomplish much else. Well, it is either they who say this, or the pundits who claim to spake for them. Each presidential election cycle, candidates bemoan Washington gridlock, and that gridlock creates policy paralysis. There’s two things wrong with these observations: 1) It is not clear that divided government creates gridlock, and 2) It’s not totally clear (historically speaking) when gridlock does exist, it is always, or even usually, a bad thing.

Here are six examples to prove my point (many more could be added, of course, but these stand out as historical legislative accomplishments in a divided government).
  • President George W. Bush and the Democratic controlled congress expanded healthcare laws to fund low-income and elderly citizens.
  • President Bill Clinton and the Republican controlled congress overhauled the nation’s welfare system and balanced the federal budget.
  • President George H.W. Bush and the Democratic controlled congress enacted far-reaching federal laws to aid disabled citizens.
  • President Ronald Reagan and the Democratic controlled congress reformed the federal tax system.
  • President Richard Nixon and the Democratic controlled congress create new programs for federal environmental policies and programs.
  • President Dwight D. Eisenhower and the Democratic controlled congress established the interstate highway system.
I have cited my own political science scholar (not in person of course) and he concluded that divided government do about as well as unified ones in passing important laws, conducting important investigations, and ratifying significant treaties. (Morris P. Fiorina, Divided Government, 1992, pp., 86-111).

Political scientist David Mayhew studied 267 important laws that were passed during the time between 1946 and 1990. These important laws were just as likely to be passed when opposing parties controlled the White House and Congress. Divided government created the Marshall Plan and the 1986 Tax Reform Act."
I hope Jason does not mind my taking such a large excerpt of his analysis. He is reading many of the same articles I do, and arriving at a similar conclusion. My only issue is with the tentative and defensive tone of his thoughtful post, generally ceding the high ground to those who would have us a believe that only One Party Democratic Rule has the wherewithal to govern effectively. I also take issue with the first sentence in this excerpt. I don't know who the Americans are that Jason is talking to, but the Americans I talk to have a very different preference. Having lived through One Party Rule for eight of the ten years, first by the GOP, and most recently by the Democrats, they are fed up with both parties and looking forward to a divided government keeping the worst impulses of both parties in check.

To that point, the Orange County Register opines in an editorial on "What Tuesday's election might mean":
"Is divided government what works — and what Americans want? Many recall the 1990s, with a Democrat in the White House and Republicans running Congress, with some nostalgia, as the two parties prevented either from undertaking massive initiatives, and the private economy grew. We saw welfare reform, a capital-gains tax reduction, free trade initiatives and a budget surplus. One scholar observed in a recent editorial board that when government is divided, the free market is a little more free, to the benefit of all. Divided government may neutralize the worst impulses of each party — Republicans are less apt to enact a pro-business agenda of subsidies and incentives, and Democrats are less likely to overregulate and micromanage."
Peter Lawlor of Postmodern Conservative is making a repeat appearance in the carnival by ticking off some astute "Random Predictions and Comments":
"The most astute commentators (such as Chicago’s Chapman) see that Americans are thrilled with neither party right now. (They liked the Republicans back in 1994.) But they seemed more attuned to the advantages of divided government–both (and studies back them up) as a means of controlling spending and as a way of containing the evildoing specific to each side. The most cynical or angry American voters (such as some who go to Tea Parties) think that Bush and his Republicans and Obama and his Democrats were/are both irresponsible screw ups. So let incompetence and corruption counteract incompetence and corruption (as FEDERALIST 51 sort of says). "
Chuck Sweeny blogging for the Rockford Register Star looks past the election to anticipate the shape of things to come in "Gridlock may be on GOP's lips, but they'll have to compromise":
"Gridlock is maybe what Republicans say they want, but the reality of governing requires cooperation and compromise. Both parties need to ignore their screaming commentariat on Fox and MSNBC and do the people’s business. If we do vote for divided government on Tuesday, the message we’ll be sending is that we expect legislation to be forged that recognizes We are not a liberal country or a conservative country. We are a centrist country, but one that has a strong libertarian tendency that’s been a hallmark of our republic since 1776.
The Dividist agrees, and with that, we'll conclude this edition.

Look for the next edition of The Carnival of Divided Government Quattuor et Quadrâgintâ (XLIV) - Special Post-Midterm Postmortem Edition - intended to be published next Sunday 11-07-10. Submit your blog article at carnival of divided government using our carnival submission form.

Divided and Balanced.™
Now that is fair.

Carnival of Divided Government

Saturday, October 30, 2010

"The Economist" defends divided government from attack by hysterical Nobel Prize winning emo economist Paul Krugman

No sooner had I completed my heroic defense of divided government against a last ditch counter-offensive from partisan Democratic bloggers, when Paul Krugman launched a sneak attack from the far left flank. It was a classic Krugman tactic - an awe inspiring, world class hysterical hissy fit from the lofty platform afforded him by the New York Times:

Divided We Fail - Paul Krugman
"Barring a huge upset, Republicans will take control of at least one house of Congress next week. How worried should we be by that prospect?.. This is going to be terrible. In fact, future historians will probably look back at the 2010 election as a catastrophe for America, one that condemned the nation to years of political chaos and economic weakness... The economy, weighed down by the debt that households ran up during the Bush-era bubble, is in dire straits; deflation, not inflation, is the clear and present danger. And it’s not at all clear that the Fed has the tools to head off this danger. Right now we very much need active policies on the part of the federal government to get us out of our economic trap... So if the elections go as expected next week, here’s my advice: Be afraid. Be very afraid."
Whoa. Somebody get that man a Prozac. A Dividist's work is never done. After reading this, I started gathering resources to rebut, but found the article so incoherent and self-contradictory that I was struggling where to start. Fortunately The Economist made this job a whole lot easier.

Krugman's Prophecy of Doom - The Economist
'Mr Krugman's attempt to raise the stakes fails utterly. He spends most of his column-inches noodling about the ways in which our imminent divided government will not resemble the one that reigned in the fondly-remembered Clintonian golden age. In his last paragraphs, Mr Krugman finally arrives at the only really pertinent question: How would the Democrats' holding their House majority save us from the terrible fate he now foresees? Here's what he says:

"Right now we very much need active policies on the part of the federal government to get us out of our economic trap.

But we won’t get those policies if Republicans control the House. In fact, if they get their way, we’ll get the worst of both worlds: They’ll refuse to do anything to boost the economy now, claiming to be worried about the deficit, while simultaneously increasing long-run deficits with irresponsible tax cuts — cuts they have already announced won’t have to be offset with spending cuts."

Mr Krugman implies that if Democrats continue to control the House, we'll get the expensive "active policies" that will save us and avoid the expensive tax cuts that will prolong our woes. Of course, Democrats control the House now. This has not spared us Mr Krugman's vein-popping fits over the current Democratic government's disinclination to enact a second budget-busting stimulus.'
And that was not all... The money quote:
"It's a little sad, isn't it, when even our most eminent public intellectuals waste so much of their time, and ours, on baseless partisan freakouts?"
I think that pretty much sums it up. Except for what Nike Gardiner at the Telegraph had to say.

Paul Krugman and the last gasp of America's liberal elites - Nike Gardiner
"Not only is Krugman’s article one of the most ridiculous pieces of scare-mongering in the history of modern American journalism, but it is the pathetic whimper of a decaying liberal Ancien Regime that is spectacularly crumbling. It also illustrates just how out of touch liberal elites are with public opinion, as well as economic reality. The tired old blame Bush line no longer works, and as a recent poll showed, the former president’s popularity is rising again."
That first sentence above being the other money quote. That really says it all. Well, except for...
Krugman: The Only Think We Have is Fear Itself - Ed Driscoll
So what does it say when Krugman is sounding doomsday reports that the GOP winning Congress on Tuesday condemn America “to years of political chaos and economic weakness?” Let’s ask Krugman himself, circa 2000. In his essay “How to Be a Hack,” he sagely warned that it’s “still a good idea to tune out supposed experts whose minds are made up in advance.” I hope I’m not jumping the gun myself when I say that for once, Krugman’s advice sounds spot-on.
Paul Krugman says "This is going to be terrible" - Ann Althouse
"Hey, wait, I thought it was Democrats who liked to say Republicans are trying to scare us. Now, it's just Republicans are scary, and we hope you believe that they're scary to everyone, and not just to Democrats."
When Paul Krugman says the 2010 election means disaster, you can bet on the opposite happening - Mark Hemingway
"But far be it from me or anyone else to suggest that Krugman’s off his rocker when he says a Republican House of Representatives portends disaster. Birds gotta fly, fish gotta swim and Krugman’s gotta make terrible predictions. As we speak, he’s probably stroking his Nobel Prize and staring wistfully out the window — the leaves are pretty on Princeton’s campus this time of year — and contemplating the Xanadu we could have had if only we’d coughed up another trillion in stimulus. Let him indulge his fantasies. It’s better that way."
To be fair, the comments quoted in response to Krugman's column are all from right-of-center columnists and bloggers. OTOH, Google could not find anyone of note from the left trumpeting or even defending Krugman's column. Methinks even his liberal brethren are embarrassed about this particular screed.

Divided and Balanced.™
Now that is fair.

Friday, October 29, 2010

Rally to Restore Sanity and/or Fear gets twammed

As previously noted, we have determined that Taiwan animations are the future of all mainstream news and consequently, we are making them a regular feature of the blog. At least until they go the way of all emerging trends, becomes boring and disappear. Here the Jon Stewart / Stephen Colbert Rally to Restore Sanity and/or Fear gets the Taiwan animation treatment. I'm thinking we need a new word for stories that get this treatment. How about "twam" - as in "Jon Stewart gets twammed." Other suggestions welcomed.

I particularly liked the Stewart/Obama mutual back scratch sequence, as well as the Daily Show response:

The Daily Show With Jon StewartMon - Thurs 11p / 10c
Intro - Next Media Animates Barack Obama Interview
Daily Show Full EpisodesPolitical HumorRally to Restore Sanity

The big controversy with the rally is whether it is truly "non-political" as claimed by the organizers. Certainly, there are reasons to think it is explicitly political, ranging from the timing, the political proclivity of the organizers, Democrats recruiting volunteers at the rally, and President Obama's mutual back scratch interview.

Honestly I don't care. I'll watch it and just hope it is entertaining. I don't see how this rally can help Democrats as the mid-term election cake appears to be fully baked. It is just a question of how much icing to put on top. While the rally might help motivate their base, that is not the real problem for Democrats this election. Their problem is that they've lost the independent, moderate, libertarian center.

As regards the Obama interview itself, I thought it was tougher and more enlightening than most "real news" interviews I've seen. Full interview linked here. As is often the case these days, the harshest post-mortem criticism of the Presidential performance seemed to come from the left. Some reactions...

Taylor Marsh:
Talking with Jon Stewart last night, Pres. Obama didn’t say the words “unemployment” and “jobs” until around 27 minutes into the program. He even invoked Larry Summers, saying “Larry Summers did a heckava job,” which brought a wry smile from Stewart with the retort, “You don’t wanna use that phrase, dude.” Obama seemed to pause to recalculate, then said “pun intended.” But clearly it wasn’t."
Dana Millbanks:
Obama wore a displeased grin as Stewart diagnosed, with high accuracy, the administration's condition: "The expectation, I think, was audacity going in there and really rooting out a corrupt system, and so the sense is, has [the] reality of what hit you in the face when you first stepped in caused you to back down from some of the more visionary things?"

"My attitude is if we're making progress, step by step, inch by inch, day by day," Obama said, "that we are being true to the spirit of that campaign."

"You wouldn't say you'd run this time as a pragmatist? It wouldn't be, 'Yes we can, given certain conditions?'"

"I think what I would say is yes we can, but -- "

Stewart, and the audience, laughed at the "but." Obama didn't laugh. "But it's not going to happen overnight," he finished.

Try shouting that slogan at a campaign rally, dude.
Andy Ostroy:
Obama desperately tried to convince the studio and home audience that his administration, given the Bushevik shitstorm it inherited, has done a pretty good job, especially with the economy, jobs and health care. I don't disagree. It/he has brought the nation back from the precipice of disaster. But his closing-argument prowess left much to be desired. He was not presidential. He was not convincing. He was not assuring. And he let Stewart best him, on several occasions. The most notable being "I don't think you wanna use that phrase, dude!" when the president said his former chief economic advisor, Lawrence Summers, "did a heckuva job." Stewart was referring to Bush's infamous misguided praise of former FEMA head Michael Brown, who notoriously botched the government's Hurricane Katrina rescue and relief effort (not exactly sure though how I feel about Stewart calling the president "dude," but I lean towards an apology being in order)...

And when a clearly disappointed Obama said "Jon, I love your show...and I don't want to lump you in with a lot of other pundits" before admonishing him for not cutting him some slack on the economy, Stewart deftly returned with "Not to lump you in with other presidents" before reiterating voters' frustration with the slow pace of the recovery. It was one of Stewart's patented "Oh, snap!" moments and the primary reason he is so loved by his viewers. There is no one in the media who can be so biting in such a non-threatening, nice guy way.
It was an informative and interesting give and take. I can only hope the rally will be as entertaining.

(x-posted and post-dated from Donklephant)

Divided and Balanced.™
Now that is fair.

Thursday, October 28, 2010

Defending Divided Government

The good news - I am seeing more attention paid to the divided government meme from the main stream media than at any point in the four+ years that I have been beating the drum for this voting heuristic.

The bad news - As we close in on election day, much of the attention is in the form of an attack from the left on the intellectual foundation of the divided government voting rationale. This is problematical, because in two years they will all be making the argument for divided government. It won't look good. Truth be told, I don't really believe this is bad news. This is a case where any publicity is good publicity. Particularly since the arguments against divided government are so weak.

The reason for this recent spike in attention is not hard to understand. The Democrats biggest erosion of support from '08 to '10 is from the independent, moderate, centrist, libertarian vote. For the most part, these voters are not choosing to vote Republican in 2010 because they like the Republican candidates or because they suddenly have embraced GOP values. They are voting Republican to divide the government in the hope of reining in the Democratic agenda and restoring some semblance of fiscal rationality. The only surprise is that it has taken this long for the left to understand that their core problem was not ennui in the base. Their core problem is they have lost the center.

We rebutted an attack from academia a few days ago, now a new front has opened up in the the left-o-sphere and op-ed columns of the main stream media. Leading the liberal wolf pack attack is progressive journolist policy wonk Ezra Klein (you don't suppose this is being coordinated do you?) No matter, I don't really care. Let us deconstruct, starting at the source. Ezra Klein at the Washington Post dismisses the notion that divided government will result in lower deficits in "Handicapping the deficit under divided government":
"When you get concrete, in other words, it's much easier to see how divided government worsens the deficit and very hard to see how it reduces it. The vehicle for worsening the deficit already exists and has Republican support. The vehicle for reducing the deficit doesn't. And that's before we talk about health-care reform, where Republicans have supported both repeal and, more specifically, repeal of the bill's cost controls, either of which would worsen the deficit picture further."
To some degree, this is a red herring. The intent is to distract from the massive increase in federal spending under the last two years of One Party Democratic Rule, which was a primary contributor to the contemporaneous exploding deficit. Ezra does not speak specifically to the spending question, because he knows that the historic correlation of federal spending increases in the modern era when comparing divided and one party government is unambiguous and unassailable.

Divided government restrains the growth of spending. Full Stop. This has been documented beyond any reasonable doubt by economists and political scientists like Niskanen, Van Doren, and Slivinski. Klein does not really challenge this historical fact, instead he contends that extending the Bush tax cuts are more likely under a divided government, and no spending cuts can overcome that negative impact to revenue. This is nonsense. For one thing, the consensus in Congress to extend most of the cuts is as bipartisan as it gets. Even the administration supports extending most of the Bush cuts. After this election, it'll be practically unanimous. Moreover, the fiscal insanity of One Party Democratic Rule under the Obama administration has set the bar of improved fiscal responsibility very low. It will not be hard to improve on this:

I don't need to respond to Ezra's demand to name where the specific cuts will come from to know that the new divided government will find a way to improve on the 2009-2010 fiscal disaster. I will, however, make this counter offer should Klein find his way to my obscure corner of the blogosphere: I'll take your bet Ezra. You name the stakes. Should the GOP take the majority in either house of Congress, I'll bet the 2011-2012 deficit will be lower than 2009-2010.

Mathew Yglesia follows Ezra's lead, quotes a supporting article by Jackie Colmes in the New York Times, asks and answers the question "Will Divided Government Lead to Deficit Reduction? Will it lead to anything?":
"Jackie Calmes writes in the New York Times, however, that she thinks it’s unlikely a new GOP majority in the House of Representatives would lead to a bipartisan coalition for deficit reduction. She paints this picture in fairly broad terms whereby “incumbents otherwise inclined to make deals are now wary, Republicans say privately, mindful of colleagues who lost primary challenges from Tea Party candidates.” I think we should assume that Calmes is right, but I would put forward another hypothesis about this. There’s unlikely to be a bipartisan deficit reduction deal because conservatives don’t care about the deficit... But conservatives don’t favor deficit reduction. They favor tax cuts. When the budget was in surplus, both George W. Bush and Alan Greenspan defined the existence of the surplus as a problem for public policy—one that should be solved with tax cuts. You can’t compromise without some element of common purpose."
More nonsense. Yglesias uses Calmes article as a launching point for little more that an anti-conservative diatribe. Moreover, he ignores her concluding paragraph, wherein Calmes explicitly outlines a scenario whereby divided government leads directly to deficit reduction. It is not a very attractive scenario, but by itself refutes what both Ygelsias and Klein assert in their posts.

Yglesias should know better, as he cites David Mayhew's definitive work Divided We Govern earlier in the post. Mayhew showed that bipartisan legislative productivity in Congress is not correlated with the government composition but rather is correlated with a "palpable public mood for change". If the public really wants spending restraint and deficit reduction - the public will get it under a divided government. Right now, both Republicans and moderate Democrats understand that this is exactly what the public wants. And on that basis Mr. Yglesias - I'll offer you the exact same wager.

For Round two, Ezra Klein cites John Sides blogging at the Monkey Cage (h/t Ricketson), who is in turn citing the Ezra Klein and Matt Yglesias posts above. Sides promises a blogging series on what political science can tell us about divided government in "What Divided Government Does: Deficit Edition". His first finding in the series is a paper from James Alt and Robert Lowrey on which he bases some fairly extravagant claims:
"Based on their model and evidence, divided government usually makes deficits worse. Here's some of their theory about situations where different parties control each chamber, as is likely to result from next week's election... Their data come from the American states during the period 1968-87. Their central finding regarding divided government is:

'We show how, faced with an unexpected recession or inheriting a deficit, unified party governments not subject to deficit carryover laws might allow it to grow (if they remained in office) while those subject to such laws eliminate deficits more quickly. States with split legislatures also adjust less, regardless of the legal situation, in large part because divided legislatures do not appear to adjust revenues in response to surpluses and deficits.'

...The more general point from this piece: divided government makes it harder to reduce the deficit. Doing this often entails coordinating on unpopular choices -- something that becomes more difficult when opposing parties are simultaneously in charge."
Do I even have to say it? There is absolutely no basis for assuming what happens in a state government is applicable to what happens at the federal level. None. Zero. Nada. Sides is making a huge leap across a bottomless chasm carrying a finding on apples to support his sweeping conclusion on oranges. It is as ridiculous as studying hung governments in a parliamentary system in Italy, and claiming it is applicable to the US federal divided government (or vice versa).

From the beginning of this blog, I have been meticulous about applying historical and economic scholarship on divided federal government to a voting heuristic applicable only to the federal government. Unless there is scholarship that shows findings at a federal level can be applied at the state level and/or vice versa , this is just plain wild ass guesswork (not even Scientific Wild Ass Guesswork) by John Sides, and intellectual sleight of hand.

The historical evidence at the federal level does show unambiguously that federal spending is restrained under divided government compared to single party rule. Combine that with Mayhew's finding that legislation follows public demand for change - and I am confident in a different conclusion. Confident enough to offer John Sides the same wager that the deficit will be reduced under the next two years of divided government.

Finally, we return to Ezra Klein one more time. For his third post in three days attacking divided government, Ezra presents an interesting chart attributed to staffer Alicia Parapaino, and then tells us what to think about it:

"What you're seeing there is that it's not the composition of the government, but the growth of the economy, that drives the deficit. Wide gaps open up during the 1973, 1981, 1991 and 2008 recessions, and they close as the economy recovers."
Actually, Ezra, the more pertinent information "you're seeing there", is that the average rate of federal spending during periods of single party rule is much larger than during periods of divided government. The federal government has a direct impact on federal spending. The federal government has, at best, an indirect influence on GDP and the macro economy. So there is no reason to expect an explicit linkage between federal government deficits determined by the macro economy and government composition, except to the degree that it is influenced by the direct correlation with federal spending.

There is one other really obvious thing "you're seeing there" - The rate of increase in federal spending during these last two years of One Party Democratic Rule swamps everything that has gone before.

Which brings me to my sweeping conclusion (everyone else is doing it) of what the electorate's preference for divided government in 2010 is really all about...

Divided and Balanced.™
Now that is fair.

Monday, October 25, 2010

Markets, Economy, Gridlock and Maria Bartiromo

After the market close on Monday, Maria Bartiromo led a panel discussion on the long and short term implications of a GOP victory and divided government for the market and economy.

First up, looking at the long term, she interviews Brian Belski of Oppenheimer Asset Management. Belski pontificates on in-house analysis looking for correlations between parties in power and divided vs. unified government, with economic metrics like GDP, personal income, employment, corporate profits, and stock market performance.

Frankly, I don't understand why anyone would take this kind of analysis any more seriously than the Hemline Index or the Super Bowl Indicator. The flaw is easy to see. The federal government simply does not control the GDP, private employment, corporate profits, or the stock market. So why should there be any expectation that there is something meaningful to be learned by trying to correlate with parties in power? Yes, the government can certainly have an effect, even large effects on the economy and these metrics. Still, looking for a correlation on this one parameter among all the myriad macro-economic factors that determine economic performance is like trying to determine the relative effectiveness of redheads vs blonds emptying the ocean with a pail in the middle of a hurricane. It's just silly.

OTOH, studies that look for correlation between parties in power and those things that the federal government does directly control (spending, deficits, legislation, armed conflict, and currency) are interesting and informative. For that we can look to political scientists and economists like Niskanen, Van Doren, Mayhew, and Slivinski for answers.

Short term market effects around the catalyst of an election are a different story. Investor psychology and emotion (whether driven by fear or greed or both) can certainly drive market movement in the short term. As I've noted before, if a preponderance of investors believe that divided government is good for the markets, than it can become a self-fulfilling prophecy. That may be exactly what has been happening to push markets higher in recent weeks.

Maria leads a panel discussion exploring whether this expectation is already baked in the market and how long it might last.

If the GOP fails to take back at least one house of Congress, there are likely to be a lot of fearful and disappointed investors.

Perhaps it is worth considering a hedge position on election day. God knows the GOP has disappointed before.

UPDATED: Fixed spelling and typo mistakes. I cannot seem to fix the embed formatting for the CNBC videos. Oddly, it formats correctly in Chrome, but not in Firefox or Explorer. This is beyond my ken. Added more gratuitous Maria pics to go fishing for a Rule 5 link.

Divided and Balanced.™
Now that is fair.

Sunday, October 24, 2010

Carnival of Divided Government
Duo et quadrâgintâ (XLII)
Midterm Meme Momentum Edition

Blog mentions of "Divided Government" have tripled in last six months according to BlogPulse

Welcome to the 42nd edition of the Carnival of Divided Government - The Special Election Countdown Divided Government Midterm Meme Momentum Edition.

Since posting the carnival weekly in the run up to the election, we changed the format a bit to make pulling this together a bit easier. The focus this week is on quantity and not too much commentary. The idea is to see how many quality Divided Government references we can list since last weeks carnival. Turns out - quite a few.

Carnival of Divided Government

As explained in earlier editions, we have adopted Latin ordinal numeration to impart a patina of gravitas reflecting the historical importance of the series. In this the Carnival of Divided Government Duo et quadrâgintâ (XLII), as in all of the CODGOV editions, we select volunteers and draftees from the blogosphere and main stream media writing on the single topic of government divided between the major parties (leaving it to the reader to sort out volunteers from draftees). Consistent with this topic, the primary criteria for acceptance in the carnival is to explicitly use the words and/or concept of "divided government" in submitted posts. A criteria that, to our endless befuddlement, is ignored by many of the bloggers submitting posts, which sadly results in The Dividist reluctantly ignoring their fine submissions. Among the on-topic posts, essays and articles we choose our favorites for commentary and consideration. We hope you enjoy these selections.

Peter Baker, writing in the New York Times, suggests "In Losing the Midterms, There May Be Winning":
"Divided government, of course, is rarely pretty, and a Republican victory would mean the end of some of Mr. Obama’s most expansive ideas, at least for now. If Democrats were frustrated pushing through their initiatives the last two years, they might soon look back at 2009 and 2010 as the glory days. "
Bill Berkowitz of The Smirking Chimp reports on the sentiment among Jewish voters and quoting Larry Sabato in "Larger Than Usual Block of Jewish Voters Appear Dissatisfied":
"Commenting on the congressional elections, Sabato said that "If 33 percent of Jewish voters say they prefer a GOP Congress, that tells me that the argument for 'checks and balances' has taken hold broadly, and that we are likely headed for divided government in some form."
Charles Gasparino is pumping his new book and is quoted in "Wall Street Will Back Obama in 2012":
"Wall Street’s support of Republican candidates in this year’s elections simply reflects the fact that it wants to be on the winning side, Gasparino, author of the new book “Bought and Paid For: The Unholy Alliance Between Barack Obama and Wall Street,” tells Newsmax.TV. It’s a hedge,” he says. “Wall Street likes divided government, but the question is will they support this president, and I believe in 2012 they will. They are telling me that they are willing to support him as much as they support a Republican."
The Rattlesnake blogging at Electoral Vote Predictor was featured in this Carnival last week, and secured a repeat appearance by subsequently linking back to this blog with "Some Statistical Analysis of Parties in Power":
"There is certainly some anecdotal evidence to support the notion that divided government works. The time period from 1995-2000 perhaps best illustrates this trend, as that period was typified by strong economic growth and a balanced federal budget while Congress was mostly controlled by the GOP and President Clinton was in office. Many would also site the period from 1983-1989, when Democrats controlled Congress and Ronald Reagan was in office, which saw a similar strong economic uptrend (although without the balanced budget, in that case.) All of this got me to there a statistical correlation between divided government and economic growth. "
I'll have more to say on the Snake's analysis later, probably as a comment on his post,. In a nutshell I don't trust any statistical analysis attempting to link broad economic performance or stock market indexes to parties in power (for many of the reasons that Mr. Snake lists as caveats). I am more interested in analysis looking for correlation in things that are directly under federal government policy purview, like spending, deficits and taxes.

Lambert at Corrente is looking forward to the midterms with fear and loathing, but finds a sliver of hope in "The mid-terms...":
"Personally, the minor hope that I have is that Rs win either the Senate or the House, and not both. Given the givens, a divided government that has ceased to function is the best option available, since the current government has done nothing but make matters worse. And the major hope that I have is that third parties, like the Greens, and NOTA do very well."
Alex Eichler wonders aloud at the Atlantic Wire - "Would Losing Congress Really Be So Bad for Obama?"
"Republicans are expected to clean up in the midterm elections, regaining control of the House and picking up a number of seats in the Senate as well. For obvious reasons, it's generally believed that this would be a bad thing for President Obama as he embarks on the latter half of his term. But some analysts think the challenges facing Obama wouldn't necessarily be so great--and that if he's canny about it, he could even turn a divided government to his advantage."
Bernie McSherry opines in the Great Speculation column at Forbes, suggesting we think of "Nancy Pelosi as Joe Frazier, John Boehner as George Foreman":
"The markets seem comforted that the new political regime may consist of a divided government that forces both parties towards the center. If the expected result comes to pass, regime uncertainty may be reduced as radical policy options are taken off the table. Traders appear to be anticipating that the shift towards a more certain future will help the economy get off the ropes and back into fighting trim.”
I quoted Adam Shell writing in USA Today and at in an expanded "Investors Still Love Divided Government" cross-post at Donklephant. He reinforces my earlier post by reporting that "Voters may sway stocks with possible policy changes.":
"Historically, divided government has been bullish for stocks because it results in what Wall Street refers to as legislative gridlock. And in the words of many Wall Street analysts and economists: Gridlock is good. An analysis of stock returns based on who controls Congress and the White House found that the Standard & Poor's 500-stock index has fared better when government is divided. The biggest gains, an average return of 14.6%, have been posted when a Democratic president has been coupled with a Republican-led Congress, Strategas Research Partners says."
Dale Williams of Free West Radio quotes Tunku Varadarajan (as I did) and comes to a slightly different conclusion explaining "My First Instinct as a Libertarian is an All-Consuming Contempt for Politics":
" I can see cheering for divided government on Election Night. I can see hoping for a GOP Congress to counter Obama’s historic expansion of the federal government. But there’s no reason a libertarian’s “first instinct” should be to root for Republicans (or Democrats, for that matter). And it’s certainly not obvious enough to merit an of course."
Joe Gandelman, founder and editor of The Moderate Voice looks into Larry Sabato's crystal ball and places his bets saying: "Republicans Are More Enthused":
"The most likely bet: The University of Virginia’s Larry Sabato’s contention that the overall numbers have not changed and that the GOP will get the House and possibly just miss the Senate. Possibly it can pick up the Senate too. Forget Dick Morris or other ideology based analysts and pundits. Follow Sabato HERE. He now sees the GOP as picking up House seats (they take the House) and 8-9 Senate seats (they don’t get the Senate). And Americans will get the divided government they often seem to prefer.

Least likely bet: Various theories that due to a painstaking ground game, the Democrats will somehow hold onto the House."

Doyle McManus of the LA Times is looking for a bellwether on election night, and determines it is to be found in "The Pennsylvania Story":
"Pennsylvania is a big swing state; it has voted for Democratic presidential candidates five times in a row, but often by small margins. Arlen Specter, the sitting senator whose seat is being fought for, left the Republican Party after Toomey mounted a conservative challenge, and then lost the Democratic primary to the more liberal Sestak. Many of the state's white, working-class voters wanted Hillary Rodham Clinton for president; they got Obama instead. Pennsylvania is increasingly post-industrial, but it's still been battered by the recession, with unemployment at about 9%...

According to the most recent polls, the race is too close to call. If I had to guess, I'd give Toomey the edge, based on the enthusiasm gap between the two parties' voters, but that's only a hunch. The outcome will depend, of course, on how many voters each side can turn out. Those numbers will tell us something about whether the Republicans' expected wave is a tsunami or merely a ripple — and whether the GOP will have a mandate for big change or merely benefit from Americans' disappointment with Obama and their long-held preference for divided government."
Chuck Todd weighs in on an MSNBC First Read compilation on the subject of "Checks and Balances":
"If Republicans take back control of the House and maybe even the Senate, it will return American politics to its standard state: divided government. In the 21 Congresses after LBJ’s presidency, one party has held full control of the House, Senate, and White House just six times. Also since LBJ, the longest one party has controlled those three bodies is just for four years (1977-1981 and 2003-2007). And get this: Every time a party has had control of the three bodies, it ended in a wave election for the other side (1980, 1994, and 2006). So is what we’re witnessing just American politics returning to its natural state? Indeed, our NBC/WSJ poll in late August found that 62% of respondents said it was better if different parties control the White House and Congress, while only 29% preferred one party in command of both."
Kevin Bogardus reports on an FTI Consulting Poll for The Hill, finding that while "Backing GOP, business leaders stop short of repeal of Dems' agenda":
"...while not pushing for repeal of either the healthcare or financial services bill, they say the legislation is having a negative affect on their business interests. Sixty-nine percent say healthcare reform is hurting their business while 65 percent say financial services reform is doing the same. “

Right now, businesses are choosing the status quo over calls for change. They believe the most favorable environment for them would be to slow down change, and they see that as more likely with divided government,” said Edward Reilly, CEO Americas of FD, the communications arm of FTI. That is backed up by other findings of the poll. For example, 63 percent say their business interests would improve if Republicans were able to gain control of at least the House, leading to a “divided government” scenario."
Hat tip to Ricketson who pointed us to this late addition in the comments. I found this to be a particularly interesting poll, as it reinforces Charles Gasparino's assertion (above) that Wall Street will support the GOP this cycle to get Divided Government, and will support Barack Obama's re-election in 2012 to keep it.

With that, we'll conclude this edition.

As noted before, we will continue publishing the Carnival weekly as we approach the election. Look for the next edition of The Carnival of Divided Government Tres et Quadrâgintâ (XLIII) - Special Scary Election Halloween Edition - next Sunday 10-31-10. Submit your blog article at carnival of divided government using our carnival submission form.

UPDATE: Added links, corrected typos

Divided and Balanced.™
Now that is fair.

Carnival of Divided Government