Read 'em and weep. USA "all in" with a bad hand.

For anyone interested in doing a deep dive into the state of the financial budget crisis facing the United States, you cannot do better than Mary Meeker's recently released report "USA Inc." Published under the auspices of venture capitalist Kleiner Perkins, it is detailed and comprehensive, yet clear, understandable and served up in digestible bites. It is well worth the time and effort.

The forward signed by Paul Volcker, George Schultz, Michael Bloomberg, Richard Ravitch and John Doerr sets the tone:

"Our country is in deep financial trouble. Federal, state and local governments are deep in debt yet continue to spend beyond their means, seemingly unable to stop. Our current path is simply unsustainable. What to do?

A lot of people have offered suggestions and proposed solutions. Few follow the four key guideposts to success that we see for setting our country back on the right path:

1. create a deep and widely held perception of the reality of the problem and the stakes involved;
2. reassure citizens that there are practical solutions;
3. develop support in key constituencies; and
4. determine the right timing to deliver the solutions.

USA Inc. uses each of these guideposts, and more; it is full of ideas that can help us build a better future for our children and our country."

Highly recommended. Every American should take the time to dig into this document. The Dividist skimmed it and was blown away. He expects to return often for deeper insights into the problem and as a reference for future posts.

At over 250 pages, with hundreds of clear and comprehensive graphs, it is impossible to do this work justice in a blog post. The Dividist is often (justifiably) accused of preferring thousands of words when a picture or a pithy paragraph would suffice. At least he is not the only one. In an attempt at exercising a little pontification discipline, in this post we will simply deal out a 5 card poker hand pulled from the hundreds in this presentation deck.

This busted hand should have been folded as soon as it was dealt. No one is buying the bluff now. Time to throw it in, cut the losses, and reshuffle.

Henry Blodgett says this is the only chart you need to understand why we are screwed. We cannot keep spending $5 dollars for every $3 we bring in.

It's the entitlements stupid. Spending is out of control and by 2025, entitlements plus net interest payments will absorb all of the USA's revenue. Yes, that is correct. In less than 15 years all taxes will go to interest and entitlements. As Mike Shedlock says "If that is not a shocking state of affairs, what is?"


We have to grow, but we cannot just grow our way out of the problem this time, as that presumption requires wildly unrealistic growth assumptions.

Taxing the rich cannot solve the problem. Taxing everyone does not solve the problem.

Unfunded liabilities are a crushing burden. We've got to lighten the load.

Net net. The Meeker solution, unsurprisingly, is all of the above. Spending must be slashed, unfunded entitlement liabilities must be reduced dramatically, and revenue must be raised. Yes, tax rates on the rich must go up, tax loopholes must close, and the tax base must also be broadened.

Make no mistake. There is something for everyone to dislike in her recommendations - right, left and center. The Dividist is no exception. Meeker actually advocates increases in Infrastructure, Education and Defense spending while slashing entitlements. The Dividist thinks nothing should be spared.

No matter. The Dividist is in.

Cut the bullshit.

Deal.

Divided and Balanced.™
Now that is fair.

A Happy New Year message from Peter Schiff: The value of your house is still 20% too high.

When an economic bubble bursts, normalcy cannot return until the pricing excesses wrought by the bubble are wrung out of the market. A recession is often the painful but necessary market mechanism that corrects the pricing distortion and consequent misallocation of capital that occurs in a bubble. When misguided government intervention prevents the mispriced asset class from fully deflating, capital continues to be misallocated and economic malaise lingers on. This is the takeaway message from Peter Schiff's Wall Street Journal editorial this morning:

"By all accounts, the home price boom that began in January 1998, when the previous 1989 peak was finally surpassed, and topped out in June 2006 was extraordinary. The 173% gain in the Case-Shiller 10-City Index (the only monthly data metric that predates the year 2000) in those nine years averaged an eye-popping 19.2% per year. As we know now, those gains had very little to do with market fundamentals, and everything to do with distortionary government policies that mandated loans to marginal borrowers, and set off a national mania for real-estate wealth and a torrent of temporarily easy credit...

From my perspective, homes are still overvalued not just because of these long-term price trends, but from a sober analysis of the current economy. The country is overly indebted, savings-depleted and underemployed. Without government guarantees no private lenders would be active in the mortgage market, and without ridiculously low interest rates from the Federal Reserve any available credit would cost home buyers much more. These are not conditions that inspire confidence for a recovery in prices. In trying to maintain artificial prices, government policies are keeping new buyers from entering the market, exposing taxpayers to untold trillions in liabilities and delaying a real recovery. We should recognize this reality and not pin our hopes on a return to price normalcy that never was that normal to begin with."

Later, Schiff defended his thesis on CNBC:

"... if Schiff is right, homeowners are looking at pain.We know that Schiff is a tad dramatic – some would say alarmist – but his forecasts are not without merit. In late 2006, Schiff predicted the housing bubble and resulting subprime mortgage crisis and in late 2008, he predicted the automotive industry crisis and the crisis in the banking and financial market."

Schiff's holiday forecasts have become a regular feature on this blog. As long as his prognostications prove to be more right than wrong (as we've seen over the last five years) it is a tradition the Dividist will continue to observe. The Dividist does not find it particularly difficult to appreciate the wisdom in this particular common sense analysis. In fact, the Dividist finds it much more difficult to understand how anyone could expect that a problem that was:

• Triggered by Federal government market-distorting social engineering policies intended to permit people to buy homes they cannot afford...
• Enabled by Federal Reserve Bank expanding the money supply and keeping interest rates artificially low...
• Fueled with massive deficit spending...

could be solved by:

• More federal government market-distorting social engineering policies intended to allow people to to stay in homes they cannot afford...
• Enabled by even more Federal Reserve Bank expansion of the money supply while artificially keeping interest rates even lower...
• Fueling it all with even more massive deficit spending.

Definition of insanity anyone?

Divided and Balanced.™
Now that is fair.

"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.

Good News, Everyone!

OK, I couldn't resist the title & pic combo. But it IS nice to finally see a small suggestion of a bright spot in the employment situation. Below is a chart from the Mercatus Center at George Mason U. regarding temp staffing contrasted with payroll employment.



While the short text implies the fall in temp staffing is a bad sign, I have a somewhat different take seeing the two stats together*. The fall-off in temps staffing coincides with a positive uptick in payroll hiring, which strongly suggests that an equilibrium is being reached in payroll staffing. To wit, it suggests that employers have reached a point where they have quit downsizing and insuring against further decline, and for the moment are feeling comfortable with fully staffing at their current levels of production.

That's a far cry from actual growth, mind you, but given the very expensive mandates already shoved down their throats (ObamaCare, new taxes and regs), the threat of more to come (more tax hikes and even more burdensome regs), the weak economy and ongoing workout of bad assets from the real estate and financial bubble-bursts, amd the enormous uncertainties associated with all of the above, it's a positive indicator of equilibrial stabilization, perhaps due to watchful waiting ahead of the elections. Which beats the hell out of further decline and IMHO is a positive indicator of reduced "double-dip" potentials.

If the "watchful waiting" hypothesis is correct, evidence of it will be found in market trends tracking the polls the closer we get to the elections, and in the election-reaction market movements the first week of November, as election results are confirmed.

[*--Pay attention to the somewhat different scales so as to not get the two levels confused as being the same. Also, for those not used to reading such things, please note that positive/negative is where the lines cross their respective 0.0% lines, not where the trend direction changes. Payroll jobs did not start upticking in early-'09, for example, that's where the rate of losses started reducing. But increases in payroll employment do not begin until the 0.0% point was reached in the uptick of the trend, roughly May '10. And temp staffing did not hit 0.0% until July '10.]

Investors Love Divided Government - Perception is Reality

The correlation (or not) of divided government, market performance, election expectations and investor psychology has been a recurring theme on DWSUWF since the beginning of this blog (see 2006, 2007, 2008 , 2009).

In yesterday's post, I quoted a couple of articles speculating on how markets might react should the Republicans retake either the House or Senate majority in the 2010 midterms. This was my comment on the articles:

"I am reluctant to link longer term market behavior to any policy or partisan mix in Washington. I've not seen any studies that show a believable, statistically significant correlation between long term market direction and Republican, Democratic, or divided governments. That said - in the short term it is less important whether there really is a correlation so much as whether investors believe there is a correlation. My sense is that most investors believe the stock market will benefit from Republicans taking control of either the House or Senate in the fall. With that expectation, a rising market could very well be a self-fulfilling prophecy."

Today, the Dow Jones rebounded 274 points, leaving many analysts scratching their heads after the unrelenting doom and gloom of the past few weeks. CNBC preempted Jim Cramer's show to broadcast a one hour special analyzing the day's market action. In this excerpt Ron Insana echoes that sentiment:


Money quote:

"All of a sudden there are some reports coming out saying the politicians are underestimating the possibility the Republicans take either one or both house of Congress. If that political uncertainty disappears and you get a Democratic President and a Republican Congress - that is the best combination for stock prices. It might also clear up the uncertainty that will allow corporations to hire people." - Ron Insana

Indeed it might. And like in the 2006 mid-terms - perhaps happy days will be here again (at least as far as the market is concerned).

The full unedited clip from CNBC is linked here.

Postscript:
Yes - Amanda Drury did, in fact, turn to the panel and ask "Double-D or not Double-D? What do you think?" I thought Insana was going to lose it.

Divided and Balanced.™
Now that is fair.

Carnival of Divided Government - Duo et Trîcênsimus -Special "No Special Day" Edition

Welcome to the 32nd edition of the Carnival of Divided Government- The duo et trîcênsimus June 15 Edition. DWSUWF has posted many special editions of this carnival over the last few years, including the recent Special St. Patrick's Day edition, Special Chinese New Year Editon, Special Bad Attitude Election edition, Special Halloween edition, etc. Today we post the "No Special Day" edition , as we are more than a bit late for the originally planned "Special Memorial Day" edition. This is best. Our carnival is a bit too cynical and flippant for as somber a holiday as Memorial Day. Of course, as this is the first "No Special Day" edition in over two years, this edition is more special than all the others.

As explained in those 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 trîcênsimus (XXXII), as in all of the CODGOV series, 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 DWSUWF reluctantly ignoring their fine submissions.

Carnival

We begin with Michael Kinsley and an op-ed in the Washington Post - "Change - You asked for it":

"High-church moderates like to claim that a government with the power split between the two parties is desirable. They even claim sometimes that the voters consciously choose divided government, or that they are sending a message that they want sensible compromise and are tired of partisan bickering, etc., etc. Moderistos do not explain how a particular voter would go about doing these things. (How would you even know which way to split your ticket to make sure that you're not just canceling out the votes of a fellow divided-government enthusiast?)"

Interesting. Apparently DWSUWF is a "high-church moderate." I don't even know what that means. More to the point Michael - while I have no idea whether many (or any) voters "consciously choose" divided government, I know they should. And it is just not that hard to figure out how to vote for divided government.

This particular "moderisto" divided government advocate has been explaining how to vote for divided federal government for a number of years now. It is really quite easy. In 2004, the divided government vote was obvious. It was a vote for John Kerry and failed. In 2006, the divided government vote was obvious. It was a straight vote for Democratic party legislators and succeeded. In 2008, the divided government vote was obvious. It was a vote for John McCain and failed. In 2010 the divided government vote will be a straight vote for Republican legislators and will likely fail to achieve that goal, but will hopefully close the gap in preparation for 2012. In 2012, the divided government vote will be for Republican Senators, and/or the Republican nominee for President. It very well may succeed, with Republicans retaking either the White House, or (more likely) the Senate, with the Dems retaining control of the House of Representatives (and maybe the presidency).

None of this is meant to imply that the divided government vote will always be obvious. Indeed, in 2007 DWSUWF addressed exactly this question - What if there is no obvious "divided government" vote? The updated answer:

If the "divided government vote" is not obvious, if reasonable people can argue about what the correct "divided government" vote should be, then there simply is no "divided government" vote for that election. In that circumstance, the moderate/libertarian divided government voting block would go "free agent." There are several easily identifiable situations where it will be completely obvious that there is absolutely no divided government vote. As a hypothetical example: Although the Democrats structural advantage in the Senate race in 2010 make it extremely unlikely that the Republicans can take either house, if the GOP were by some miracle able to retake the Senate, and the Democrats hold the House of Representatives, we would go into 2012 with a divided Congress that is likely to stay that way. This means the presidential vote in 2012 would have no divided government preference (assuming that historical incumbent advantages hold.) It simply does not matter which party the president belongs to, as the congress and the government would still be divided. In that case, the moderate/libertarian/dividist vote becomes "free agent" with a counter-intuitive preference for incumbents.

Whether we can succeed in restoring the greater fiscal responsibility and better governance that comes with divided government will depend on many factors. A critical factor will be whether "moderistos" of good conscience understand why it is important, and vote to make it happen. At least this blogger will continue to do what he can to promote the divided government voting heuristic. Hope this clears it up for you Michael.

Some Republicans have already picked up the gauntlet, recognizing and promoting what will likely be the best argument to vote Republican in 2010 and 2012. Pat Toomey is a Republican running for teh Senate in Pennsylvania. I have no idea whether he has any real prospect of succeeding, but I sure like what he is saying in this Harvard Crimson guest editorial, picked up by the Morning Call and linked by The Centrist - "History tells us one party rule often leads to excesses.":

"In the present age, we have experienced again the consequences of unchecked, one-party dominance. From 2001-2007, Republicans controlled both houses of Congress and the White House. At the height of its power, following the 2004 elections, Republicans had a 55-seat Senate majority and a 232-seat House majority. Some party leaders got carried away and pursued policies that grew their own power at the expense of American taxpayers. Their unlimited power led to runaway spending, an explosion in obscenely wasteful and parochial earmarks, a lack of transparency, and once again corruption that sent several Congress members to court and some to prison... Over the past five months, the Democratic monopoly has expanded the federal government by historic proportions. It began with further taxpayer-funded bailouts of Wall Street and the auto companies, then extended the bailout fever to the housing industry. After campaigning on a promise to end the Republicans' tenure of irresponsibility, full Democratic control in Washington has produced policies that reward rampant irresponsible behavior and penalize innocent and responsible taxpayers who are forced to foot the bill. Still, there's more. A unified Democratic government passed a partisan $787 billion stimulus bill and another $410 billion spending bill. After promising to end the Republican tenure of pork-barrel spending, these massive bills included titanic lists of pork projects. The projected budget deficit for the fiscal year 2009 grew to $1.8 trillion, or a shocking and nearly unprecedented 12.3 percent of our gross domestic product. They then proceeded to pass a new record-breaking $3.6 trillion budget for the upcoming year. Unchecked power pushes parties to excess regardless of which party is in power."

Too true. But unless a meaningful percentage of the voters ( 5-10%) start voting based on what politicians do as opposed to what they say (even if said politician is really really good at crafting and delivering what they say), we are still going to suffer the abuses, fiscal irresponsibility, bad governance and excesses endemic to single party rule.

The view from the Ivory Tower

Academics across the political spectrum have taken note of the apparent lack of any constitutional or legislative constraint on Obama's exercise of executive power under single party Democratic rule. Unsurprisingly, the left-leaning are much more sanguine about the Obama unitary executive, despite it being identical in overreach and carrying the same constitutional risk as the Bush unitary executive. Case in point, Sandy Levinson, who is beating the drum for fundamental constitutional changes to constrain the executive branch (among other perceived deficiencies) and blogs about his choice for president at Balkinization with the hand wringing post "Further notes on a constitutional dictatorship":

"..when presidents are not faced with "hostile majorities" in Congress, they can increasingly count--especially if Republican--on the lemming-like loyalty of congressional majorities who are especially delighted to provide not an ounce of the oversight that the naive might believe attach to a separation-of-powers system. And, of course, even when George W. Bush was faced with divided government in 2007-2009, he was still able to exercise quasi-dictatorial powers with regard to military and foreign policy. But enough of Bush bashing. After all, the President who seems determined not to hold any high-ranking member of that Administration accountable for disgracing the country and making us less safe to boot by adopting torture as a national policy is Barack Obama, to whose campaign I contributed and for whom I happily voted (and whose presidency, overall, still leaves me delighted). But surely we should recognize that the American version of "constitutional dictatorship" is built into our system and not simply a function of character. "

It strikes me as odd that Professor Levinson still manages only the most perfunctory expressions of concern at the identical exercise of quasi-dictatorial powers when it is this administration issuing edicts as opposed to the last. And as far as the "lemming-like" congress, I am failing to see the distinction that Levinson discerns between the "lemming-like" current congress and the "lemming-like" Republican congress under GWB. I can only surmise the good professor feels it is reasonable to be "delighted" with a "constitutional dictator", as long as he is in the right party.

Professor John Buck, blogging at Economic Perspectives, displays some frightening graphics on our collective accelerating debt, but offers some mushy thinking when he questions "The virtues of politcal dissension?":

"A glance at the annual change in the U.S. public debt since 1940 suggests the abandonment of fiscal responsibility can more easily be blamed on the ascension of supply-side economic doctrines with the election of Ronald Reagan in 1980 and the popularity of tax cuts, rather than the lack of divided government from 2001-2006. Using the Welches´ questionable logic, one could just as easily have argued the opposite point - that divided government is detrimental to the economy. In the recessions of the early 1980s, the White House and Congress were controlled by different parties. The same can be said for the 1990-1991 recession. The 1992 elections when Bill Clinton won the presidency and Democrats gained control of the House and Senate initiated a decade of prosperity and economic growth. So which is it? I think the answer is there is no correlation between economic prosperity and whether the U.S federal government is divided."

Like any good partisan, the professor does not permit facts to get in the way of a grand sweeping conclusion that confirms his partisan bias. There is a clear correlation between divided government and reduced rate of spending increases and growth of federal government. This has been documented by economists like Niskanen and Slivinski among others. I actually thought the correlation might have been broken when Obama took office, and indeed it would have if Obama had lived up to his moderate campaign rhetoric. While the rate of federal spending increases under the last two years of divided government in the Bush administration were less than the previous six years of profligate spending by the single party Republican government, it certainly was still an easy target to beat if Obama chose to demonstrate any inkling of fiscal responsibility. He did not. Instead he chose to steamroll the Democratic House of Representatives stimulus pork barrel spending plan through Congress and the wildly irresponsible massive deficit increases of the Democratic budget, saddling the country with back breaking debt that cannot be repaid without devaluing the currency. His disingenuous rhetoric about halving the deficit and advocating "paygo" is laughable after forcing through a budget that quadruples the budget under a suspension of "paygo". But he gets a free pass from the professor. After all, as the professor concludes in his post, it is really not about facts or policy, but "What matters is the INDIVIDUALS in positions of power...". In other words, everything is ok, as long as Obama does it. Even if it is the exact same or worse policy as George W Bush.

At the Library of Economics and Liberty, Professor Arnold Kling reaches a depressing conclusion in his post "Why I fear a one party state.":

"I am not upset with political trends because I want Republicans to win. I am upset because I foresee a one-party state. Even if neither party is particularly libertarian, gridlock and competitive checks and balances are better for libertarians... as hard as it is for many people to admit it, the political equilibrium of competitive balance is gone for the next decade. For now, the only two elements of the political system are Progressive Corporatism and The Resistance. And the latter does not amount to much yet."

FWIW professor, you can count DWSUWF in The Resistance. It still does not amount to much. Yet.

Professor Kling's co-blogger at Econlog - Professor Bryan Caplan - is willing to put money on his somewhat less pessimistic prognosis in his post "One Party Democaracy is not coming.":

"There is also some evidence that unified government is less libertarian than divided government (see here and here for starters). I should add, though, that the effect is not huge, and Singapore is a striking counter-example. Nevertheless, I disagree with Arnold's claim that one-party democracy is likely to happen in the U.S. He assures us that, "it is quite easy for a one-party government to emerge when there are ethnic blocs and a large public sector relative to the private sector."

Small comfort, but a comfort nevertheless.

For additional comfort we might look to Jennifer Rubin writing at Commentary who looks at a Gallup poll and infers that "Independents Seem to Like the “No” Crowd":

"It might be that independent voters think back fondly on the days of divided government, when gridlock protected them from political extremism and the passage of every bad idea that popped onto the majority party’s agenda. It may be that all that spending and debt really has rubbed them the wrong way. Or maybe all that “We won, lock out the Republicans” stuff isn’t what they had in mind."

Flap at FolloseusFlaps Dental Blog looks at a more recent Gallup poll and comes to a similar conclusion in his post "Political Party Affiliation Now Tied – 11 Point Swing Towards GOP":

"Quite an interesting trend if this poll is not an outlier. Interestingly, the same thing happened after Bill Clinton was elected President. In 1994, the first election after Clinton’s 1992 election, the GOP captured the House majority for the first time in over 40 years. Is the reason that American voters prefer divided government with no one party in complete control or has there been a Democrat, Obama overload?"

The Republicans likely are too deep in a hole to climb out in the mid-terms, but if they can narrow the gap it will bring us closer to a divided government in 2012. However, it would be very helpful for the GOP to follow the first rule of holes - stop digging.

Here comes the Judge

Divided government occurs when one party does not exercise control of both the executive and legislative branches. As observed by Professor Levinson, constitutional separation of powers break down when "lemming-like" majority Congressional Democrats abrogate their constitutional oversight responsibility over a Democratic President, as is happening now, just as when "lemming-like" majority Congressional Republicans abrogated their oversight responsibilities under President Bush. Without divided government, only the Judicial branch offers any hope of imposing constitutional constraints on the the power of the presidency.

After eight years of Bush judicial nominations, the silver lining under the dark cloud of our current single party government was the prospect of balancing appointments to the judiciary in general and the Supreme Court in particular. As I've said before, my fervent hope is that Obama will appoint judges who will declare many of his administration's actions on civil liberties unconstitutional - particularly in the area of habeus corpus, search and seizure, surveillance, and detentions without trial. To that end, based on what I have seen thus far in the MSM, DWSUWF supports the Sonia Sotomayor nomination to the Supreme Court.

The nomination has prompted some disparate divided government musing across the sphere.

According to David Stras writing in SCOTUS Blog, absent moderating influences like divided government, Obama has a virtually free hand in this selection. Such are "The politics of the Sotomayor nomination":

"As I have outlined in my essay in the Northwestern University Law Review, the traditional indicators of political constraint in this process–such as the presence of divided government, a short time until the end of a President’s Term, the preferences of the median and filibuster pivots of the Senate, the approval ratings of the President, and the criticality of a particular nomination to the composition of a court–all pointed in favor of a relatively unconstrained choice for President Obama... it is extraordinarily likely that Judge Sotomayor will be confirmed in time for the first Monday in October."

The man that Judge Sotomayor is likely to replace on the court, Justice David Souter, had some cautionary comments worth considering in a recent speech. I found his comments particularly resonant when considering the young Obamites delighted with the unconstrained power being wielded so freely by their favorite "constitutional dictator". As reported by the Washington Times:

"Supreme Court Justice David H. Souter on Wednesday warned that America's civic core is floundering in an address to the nation's judicial leaders, including two women considered potential successors for the retiring justice. Mr. Souter said the nation's troubles in educating citizens about the importance of democratic principles and the philosophy of divided government are a threat to democracy. "It is being lost," he said Wednesday afternoon at Georgetown Law School. "It is lost if it is not understood."

Finally, frequent carnival contributor, humorist and limericist Madeleine Begun Kane also weighs in on the nomination with "Karl's Roving Standards" posted at Mad Kane's Political Madness, saying, "While this doesn't use the phrase "divided government" it's very much about its effect on U.S. Supreme Court nominations." Hmmm.... Ok Mad... Lets see:

Karl’s Roving Standards
By Madeleine Begun

Kane Rove’s memory’s certainly short.
Back when dealing with names for the Court,
He said Dems must not nix
Any Bush judgeship picks
Based on views that they failed to support.

But now that the tables are turned,
He says Dem nominees must be spurned
If Republicans think
That their politics stink.
Consistency? Karl? Unconcerned!

Madeleine is a wonderful political humorist and I love her work, even when I disagree with her politics. However, whenever a partisan accuses another partisan of hypocrisy, as the talented Ms. Kane does here, the riposte is always absurdly easy to craft - just flip-flop the argument or in this case - the verse:

Citizen Kane's Court
by mw

Kane’s memory is equally short.
Back when dealing with names for the Court,
She demanded Dems nix
Any Bush judgeship picks
Based on views that she failed to support.

But now that the tables are turned,
She feels no nominee should be spurned
as long as Madeleine is feeling
their politics are appealing.
Consistency? Mads? Unconcerned!

Finally, Bobo at The Bobo Files had some nice things to say about our efforts here and some thoughtful comments on the problems with our two party system in his post "Not all great minds should think alike.":

"I’ve been following Divided We Stand, United We Fall for quite some time now - he contributes to The BoBo Carnival of Politics frequently. The premise of his blog is that we should keep the Federal government divided. We should in no way ever allow a supermajority in the government as it will cause this great nation to fall, and fail. No time like now has this ever been proven to be more correct... If you are either a Republican or a Democrat and you have found that your party no longer represents your values - the best solution now is to become an independent... The solution is to shed the parties and vote as an Independent or find one of the “third-parties” out their that is actually closer to your own values. The Democrats and the Republicans are both taking America down the same path of destruction and none of them have a backbone any longer. The two-party system is corrupt... It’s time for we regular everyday Joe Schmoe Americans to rise up and let D.C., local, and state politicians know that we want our country back. If our votes don’t matter to them any longer they will no longer have our financial support either. We will show them with our votes at the ballot box and we’ll reject everything they stand for. We need to make them fear us."

Agreed. An interesting element here, is that in our partisan polarized political environment it will only take a relatively small percentage of true independents voting consciously and consistently for divided government to make a big difference. Something for disillusioned Republicans and Democrats alike to consider.

Miscellany

Traditionally, we conclude this Carnival by including one "off-topic" submission, as a grudging acknowledgment and proxy for the many off-topic submissions received. Off-topic in this context meaning - no mentions of "divided government" or gridlock. For this issue we offer Allison Bricker reading the MIAC report and asking "Does Supporting the Constitution Make Me a Terrorist?" posted at The Smoking Argus, saying:

"During the course of the previous administration, both officials and their old-media shills demonized individuals who dared speak out against the Bush Doctrine as unPatriotic, unAmerican, and/or traitors. Now we are told by socialist scribes⁶ that dissenting against the “economic terrorism” id est the central bank manipulated credit crisis, is also unpatriotic. If we are no longer allowed to question or criticize the government’s domestic or foreign policies without being painted as homegrown radicals, is there any semblance left at all of our republic? Should I instead just pledge blind allegiance to President Obama and be content with my “right” to criticize a group of B-list celebrities or no talent wannabee singers on “Dancing with the Stars” or “American Idol” respectively?"

Not going to happen. Not for Allison. Not for me.

And with that we conclude this edition. Thanks for stopping by, and thanks for all of the submissions (on-topic or not).

As previously announced - since this carnival is focused on the topic of Divided Government, and seeing how voters spectacularly rejected the idea in the last election, and with no real prospect of restoring divided government before 2012, we have put this carnival on a reduced publication schedule over the next year. Instead of monthly, we'll go quarterly or - you know - whenever I feel like it.

Look for the next edition of The Carnival of Divided Government XXXIII - Special "Be Late for Something Day" Edition on September 5th. Which I anticipate being late and actually publishing on Labor Day - September 7. As we head in to the end of year, and in anticipation of the 2010 mid-terms, I expect to restore the monthly CODGOV publication schedule. In the meantime, submit your blog article at carnival of divided government using our carnival submission form.

Divided and Balanced.™
Now that is fair.

Technorati tags: divided government, CODGOV, blog carnival, Sonia Sotomayor, libertarian, economics, Barack Obama