Six pundits and one poll that got the election right and what they've said since - seriously & literally.

 They got it right. 

Let's get this out of the way: The Dividist got the 2016 Presidential election wrong. It is not unexpected for the Dividist to advocate for a continuing divided government state and vote. That is, after all, the raison d'etre for this blog. But the Dividist went beyond advocacy in 2016. We confidently predicted that we would continue to see a divided government in 2017 and into the foreseeable future. The Dividist even considered declaring victory and shuttering this blog post-election. We fantasized about triumphantly proclaiming "Our job here is done".  Yeah, that didn't happen. We now have One Party Republican Rule, a Unified Government and the Dividist has work to do.

With the passage of time, and with judicious use of Third Person Plural, the Dividist has created enough distance from the election to get back to work and begin posting again.

Misery loves company. Company is comforting. Who else got it wrong? Besides the Dividist, pretty much everybody:

 They got it wrong. 

The reader may recall that in the closing days of the election the most respected polling analysts in the country were fighting flame wars over whether Clinton had a 71%, 85% or 99% chance of being our next President. In case you didn't notice, she finished with a 0% chance of becoming President. We'll let Larry Sabato's Crystal Ball represent all the failed pundits, pollsters and prognosticators with this straightforward Mea Maxima Culpa:

"We heard for months from many of you, saying that we were underestimating the size of a potential hidden Trump vote and his ability to win. We didn’t believe it, and we were wrong. The Crystal Ball is shattered. We’ll pick up the pieces starting next week as we try to unpack what happened in this election, where there was so much dramatic change from just four years ago. We have a lot to learn, and we must make sure the Crystal Ball never has another year like this. This team expects more of itself, and we apologize to our readers for our errors."

Credit where it is due. Not everybody got it wrong. There were more than a few voices from across the political spectrum that saw the writing on the wall. Those of us who "knew" Trump was going to lose either dismissed or laughed at them when we should have listened. So let us listen to a few notables who got it right. Let's listen to what they said before the election and what they've said since.

Return of The Dividist "10" Wherein we disagree with Nate Silver.Sort of.

With apologies to "10" 

Note to Pundits: It's Still 2014
With all the speculation about the 2016 presidential election prospects of Hillary Clinton, Joe Biden, Elizabeth Warren, Chris Christie, Jeb Bush, Rand Paul, Scott Walker, et. al. ad infinitum, something important has been overlooked. We have a very important election in 2014.  Nate Silver informs us that majority control of the Senate hangs in the balance:

FiveThirtyEight Senate Forecast: GOP Is Slight Favorite in Race for Senate Control 

"When FiveThirtyEight last issued a U.S. Senate forecast — way back in July — we concluded the race for Senate control was a toss-up. That was a little ahead of the conventional wisdom at the time, which characterized the Democrats as vulnerable but more likely than not to retain the chamber.  Our new forecast goes a half-step further: We think the Republicans are now slight favorites to win at least six seats and capture the chamber. The Democrats’ position has deteriorated somewhat since last summer, with President Obama’s approval ratings down to 42 or 43 percent from an average of about 45 percent before. Furthermore, as compared with 2010 or 2012, the GOP has done a better job of recruiting credible candidates, with some exceptions."

Given we are still early in the primary season... Given the Republican penchant for nominating clown candidates in winnable Senate races...  Given the hole the Republicans dug for themselves in the Senate in 2012... the Dividist is a bit dubious of Nate Silver's prediction.  We'll come back to that. But first, let's consider one 2014 outcome that is not at risk in any meaningful way - the continuing status quo of our happily divided government.

Year of Divided Government Dragons 龍 2012 Senate Election Outlook

King DivGoverah astride the capitol.
A 2012 divided government sequel?

For the committed dividist, deciding how to vote in a national election is a two step process. The first step is a realistic clear-eyed assessment of the prospects for either party taking control of the House, Senate, and White House. The next step is advocating and casting a vote for the scenario most likely to prevent one party rule of the legislative and executive branches. Finding the divided government vote in any given election cycle is far easier than it sounds. In fact, it is usually quite obvious.

Year of Divided Government Dragons 龍 2012 Political Prognostication & the House of Representatives

The three headed King Divgoverah 2010 dragon ravages the homeland

We are in the midst of a two week celebration of the Chinese New Year and it is not just any new year celebration. This is the Year of the Dragon - the Water Dragon* - the most auspicious, desirable, and luckiest of the Chinese zodiac menagerie. It is, of course, also an election year. Can we glean any meaning from this collision of ancient Asian astrology and modern American politics?

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.

Ten in Ten Wherein we explore the prospects for restoring divided government by means of the GOP winning the Senate

NOTE: Prognostications in this post updated on 10-10-10 post [LINKED HERE]

Labor Day is fast approaching, bringing the unofficial end of a long hot summer and the official start of a short hot fall political election season. As a political blogger, the sun never sets on the election season. Time to take another stroll down the Dividist beach to see if that beautiful object of our affection, Divided Government, is drawing any closer.

Last time we looked for her the answer was "no", the same answer we found shortly after the election in 2008, and when we looked again in 2009. Conventional wisdom still says "no", but conventional wisdom has taken some surprising turns in 2010.

Conventional Wisdom

In January, the expectation was that the GOP would make gains in both houses of Congress, but fall short of retaking a majority in either. It just looked like the GOP was buried too deep in the sand to dig themselves out in one cycle. The Scott Brown "Massachusetts Miracle" eclipsed that particular ray of conventional wisdom, and since then CW has cautiously has settled on a partly cloudy forecast with a chance of heavy Republican rain. The current political weather report gives the GOP a good chance to retake the majority in the House of Representatives, but the Senate is still considered by most to be out of reach. Conventional wisdom is not unanimity, so you can find some grasping at straws, others fearing the worst, and a few wondering how bad it could get. To the center right, it looks like a done deal. We'll start our analysis by narrowing down the range of possibilities.

Every Possible Scenario
The entire universe of possibilities can be distilled to these four outcomes - listed in order of Current Conventional Wisdom:

1. Democrats retain Senate, Republicans win House
2. Democrats narrowly retain House and Senate
3. Republicans win House and Senate
4. Republicans win Senate, Democrats retain House

The best way to evaluate this would be a bottoms-up analysis looking at detailed polls and statistically correlating demographics and voting history on a district by district, state by state, and election by election basis. I'm not going to do any of that. For one thing, it is beyond my ken, for another, I can get all that from the usual suspects doing the polling and Nate Silver's blog doing the quant work. Instead, I’m going to look at the election through the prism of two "rules of thumb" and look for similarities and differences to historically analogous elections. And steal from Nate.

Maxims and Thumbs
The first rule of thumb does not get much publicity, but is an interesting fact that I've dubbed "The 100 Year Rule". In the almost 100 years since we have been been electing Senators directly (only since the 17th Amendment was ratified in 1913) the House of Representatives has never flipped majorities unless the Senate flipped first or at the same time. If conventional wisdom is correct and the Republicans take the House but not the Senate, it would be an historic first. So my first prediction is to go out on a limb and say this is not going to happen. Conventional wisdom is wrong and this scenario is the least likely of the four.

The second rule of thumb is Tip O'Neil's maxim "All politics is local." To the degree that O'Neills maxim is true, it is true about the House. This is just another way of saying (as is the first rule) that it extremely difficult to flip majorities in the House of Representatives. House incumbents, (frequently aided by gerrymandered districts) enjoy extraordinarily high re-election rates. Even when voters tell pollsters they despise Congress in general, they'll say they love their specific representative who is often the conduit by which federal services are delivered or expedited to individuals, municipalities, and businesses in the district. House elections are almost always "local." Almost.

Looking Back
1994 and 2006 were two midterm election cycles where elections were decidedly not local. They turned on national issues and the House of Representatives flipped majorities simultaneously with a flip in the Senate. These two mid-term elections shared several characteristics: We were under One Party Rule (Democrats in '94 - Republicans in '06); There was widespread dissatisfaction with the party in power; The opposition party was energized; The base of the incumbent party was disillusioned with a palpable lack of enthusiasm; There was a widespread perception that the party in power was arrogantly pursuing policies opposed by a majority of Americans; Major corruption scandals were in the headlines for the party in power throughout the election year (Rostenkowski in '94, Abramoff and Foley in '06).

Now, without a doubt, all of these elements are present in 2010. However, I don't believe the 2010 corruption stars (Maxine Waters and Charlie Rangel) rise to the level of the corruption superstars we had in '94 and '06. In both of those elections, the corruption scandals were the last straw and triggered the "throw the bums out" gag reflex in the voters. Unless there is an October surprise and more corrupt Democratic pols make into the headlines, I just don't believe there is enough animus to overcome the huge House of Representatives incumbent advantage to get the massive 40 seat shift. Plus, one should not underestimate Nancy Pelosi. My conclusion on the House: Close, but no cigar. 2010 will not be quite like 1994 or even like 2006.

Miracles Happen
So if we are to see divided government restored in 2010, the best chance will be the Senate. In January this looked like an impossible hill to climb. The Democrats held a 60-40 super majority and the tie-breaker in the person of Joe Biden. To gain the majority the Republicans would have to win 11 seats. Nobody in either party considered that realistic. But - then something remarkable happened. Republican Scott Brown won Ted Kennedy's Senate seat. You might not think that one seat would change the complexion dramatically, but it does.

Thanks Nate
Time to rip Nate Silver's work. His chart on the left is remarkable. It shows Nate's stack ranking of the Senate seats most likely to change parties. Of the top 12 seats most likely to switch parties, 11 of them are currently held by Democrats. All either have the Republicans leading in the polls or are within the margin of error. The one seat of the top 12 currently held by a Republican is the Florida Senate, and it is only there because Independent Crist is in a dead heat with Republican Rubio. The Democrat has no chance in Florida. And if Crist were to win, he would likely caucus Republican for reasons that I'll outline shortly. Now - this still appears to be a very tough climb as the Republicans need 10 of the 11 Dem seats in play to secure an outright majority. But wait! - there is another scenario - they may need to win only 8 or 9 of the 11 seats to take control of the Senate. How? the answer can be discerned by looking to the 2012 election.

2012 effect on 2010
This year the structural playing field is even. There are 37 Senate seats yet to be decided, with 19 currently held by Democrats and 18 held be Republicans. In 2012 the Republicans will have a huge structural advantage in the Senate elections. Of the 33 seats contested, 23 are held by Democrats and 10 by Republicans. The Democrats will be on defense with many more seats to defend, the Republicans will have a target rich environment. If they don't already have the majority, it it is a lock the GOP will take the majority in 2012.

Why is this important in 2010? Because Senators Ben Nelson and Joe Lieberman can count. If the GOP gets within 1 or 2 seats of an outright majority, Nelson and Lieberman will be in play. They'll have one shot to cut a deal to guarantee their committee chairmanships for at least another 4-6 years (if re-elected), whereas they will be out as Committee chairs after two years if they continue to caucus Democratic. This also applies to Crist should he knock off Rubio in Florida. My take - these guys like the power and perks that come with committee chairmanships and will not be inclined to give them up too quickly. It just would not be as much fun for them, being in the Senate without that chair. And lets be honest - its not like you liberals have been particularly nice to either of them over the last couple of years.

The Dividist Prognosticates
The Dividist 2010 election prediction: The GOP wins 8 or 9 more Senate seats outright, then takes majority control by flipping Lieberman and/or Nelson. They fall a few seats short in the House and Nancy Pelosi continues as Speaker of the House.

Stack ranking of all possible election scenarios in order of likelihood:

1. Republicans win 8-9 seats flip Lieberman,/Nelson take Senate, Democrats narrowly retain House
2. Democrats narrowly retain House and Senate
3. Republicans win House and Senate
4. Republicans win House, Democrats retain Senate
   

We'll be tracking this dirty dozen of Senate races in posts between now and the election to monitor our last best chance of restoring a perfect "10" in '10 and once again gaze upon a beautiful, desirable, smoking hot divided government in 2011.

Takeover Chances

Race
	Margin
N. Dakota	Hoeven v. Potter +40
Arkansas	Boozman v. Lincoln +32
Indiana	Coats v. Ellsweorth +14
Delaware	Castle v. Cook +9
Pa.	Toomey v. Sestak +8
Colorado	Buck v. Bennet +5
Nevada	Angle v. Reid +1
Florida	Rubio v. Crist +1
Illinois	Kirk v. Giannoulias +0
Wash.	Rossi v.Murray -1
Calif.	Fiorina v. Boxer -2
Wisconsin	Johnson v. Feingold -3
Kentucky	Paul v. Conway +4

(chart from Nate Silver's 538)

Ok - I actually listed a baker's dozen. Rand Paul's race in Kentucky is included in the watch list, as his lead is barely out of the margin of error. It'll be an interesting race to watch. Like Sharon Angle in Nevada, Rand Paul was a tea party favorite that knocked off the GOP establishment candidate. In both cases, media gaffes prompted unfavorable polls and a lot of chortling from the left. The left-o-sphere was confident that the Tea Party had torpedoed GOP chances in Kentucky and Nevada. I checked in with Moonage, a Kentucky blogger who always has his finger on the pulse of local politics. He is calling Kentucky for Rand Paul. Take it FWIW, but I think Moon's got it right.

Nevada? Another matter. Frankly I am astonished that this race remains a virtual dead heat, and it is prompting signs of panic on the left. The Nevada race may be the single clearest indicator that this may be a bigger GOP tsunami than Conventional Wisdom has yet to acknowledge.

Divided and Balanced.™
Now that is fair.

Monday Miscellany - Special Bear Market Blues Edition

The blog has been a bit neglected over over the last week or so. I have been mesmerized by the continuing economic train wreck and stock market derailment happening right before my eyes. When I could tear myself from CNBC, I found a few items from around the sphere you might enjoy find informative:

ITEM - Chicken Little was right.
This video is getting a lot of play around the blogosphere. If you have not seen it, or ever wondered why no one saw this financial crisis coming, it is well worth a few minutes of your time. It is not that no one saw it coming. It is just that no one listened when Peter Schiff patiently explained that the sky was falling over these last three years (Hat tip to Justin at Donklephant):

Peter Schiff is a regular contributor to CNBC and Fox Business News, was a financial adviser to Ron Paul's presidential campaign, and is President of Euro-Pacific Capital. In case you were thinking, "Gee, It is too bad that no one was listening to him..." well, it is not too late. We can listen to him now. From his most recent economic commentary:

"With the Big Three auto makers now in a plainly visible death spiral, the automotive bailout debate is kicking into overdrive. The disagreement hinges on whether a bailout is necessary to support an important industry or whether the unprofitable dinosaurs of the past should be allowed to fail as America focuses on an information-age, service sector, and alternative energy future. As usual, both sides have it wrong. The government should let the Big Three fail not because we no longer need an auto industry, but because we desperately do. What we do not need is the bloated, inefficient auto industry that we have today. By allowing the Big Three to fail, their capacity will be turned over to new owners who will be able to acquire the means of production at fire sale prices and hire workers at globally competitive wages. The result will be a more efficient auto industry making cars that people around the world actually want to buy at prices they can afford. Such auto makers could conceivably be profitable and could become the cornerstone of a manufacturing renaissance in the United States. In contrast, Ford, Chrysler and GM are never ending money pits that threaten to swallow a good deal of our economy."

ITEM: About that debt swallowing our economy...
The next time you see pundits arguing for massive new federal spending and borrowing to stimulate the economy, and justifying it on the basis that government debt is still less (as a percentage of GDP) than it was under FDR, consider this graph. Hayman Advisors calls it "the most frightening chart we have seen...

"... is one that compares total credit market debt to U.S. GDP. The average of this ratio over the last 100 years has been around 155%. The ration peaked first heading into the Great Depression at 260% (after then falling back to 130%) but has now risen to an unprecedented 350%."

Lance at QandO quotes Henry Blodgett's explanation:

"From the early 1920s through 1985, the average level of debt-to-GDP in this country was 155%. The highest peak in history (until the recent debt boom) was in the early 1930s, when debt-to-GDP soared to 260% of GDP. In the 1930s, the ratio then cratered to 130%, and it remained close to that level for another half century.In 1985, we started to borrow, and last year, when we got finished borrowing, we had borrowed 350% of GDP. To get back to that 155%, we need to get rid of more than $25 trillion of debt... The banks have written off $650 billion so far. So we suppose that's a start."

Think again about what Peter Schiff was saying about the debt that led to this crisis. Look again at that chart. Consider the solutions being pushed through Congress to stimulate the economy, bail out the big three auto makers, and subsidize keeping people in their homes. We have a problem that was created by too much government spending and lax monetary policy encouraging easy credit that precipitated too much debt, with a market distorted by the catalyst of massive government intervention to meet the social goals of permitting unqualified borrowers buy homes they cannot afford. And the solution being promoted? More government spending, loose monetary policy to provide easier debt, and much more market distortion from massive government intervention to meet social goals of propping up failed companies and keeping unqualified borrowers in homes they cannot afford. This strikes me as - what is the technical term? - batshit insane.

ITEM: The President-elect inspires confidence.
Steve Kroft conducted a great interview with the new first family on 60 Minutes last night. Obama and Michelle come across as genuine, warm, intelligent and confidence inspiring. It made you feel like the country really made the right choice. Well, it did until the President-elect said this:

Kroft: "Where is all the money going to come from to do all of these things? And is there a point where just going to the Treasury Department and printing more of it ceases to be an option?" Mr. Obama: "Well, look, I think what’s interesting about the time that we’re in right now is that you actually have a consensus among conservative Republican-leaning economists and liberal left-leaning economists. And the consensus is this: that we have to do whatever it takes to get this economy moving again, that we’re gonna have to spend money now to stimulate the economy. And that we shouldn’t worry about the deficit next year or even the year after. That short term, the most important thing is that we avoid a deepening recession."

Well Mr. President, you might consider whether it is prudent to continue digging furiously, when we are already deep in a hole over our head. But I guess it is best not to think about that right now. After all, it won't be us, but our children and grandchildren that be repaying China for the money we are continuing to borrow to fund all this new spending.

  Item: Corporate Welfare and outsourced government monopoly is not the same as a Free Market

Among the most annoying assertions to found in a blogosphere chock-full of mindless claims, are pundits and bloggers declaring that the current economic clusterfork is an example of the failure of free markets. Roderick Long takes this nonsense head-on in the lead essay for this month's excellent series at Cato Unbound: In "Corporations vs the Markets - or -Whip Conflation Now" Long takes Conservatives, Liberals and Libertarians to task for the sloppy linguistic conflation of big business, corporate welfare, and "private-public partnerships" with a free market. Of the three, I find his indictment of Republicans and the Right most damning:

"If libertarians’ left-wing opponents have conflated free markets with pro-business intervention, libertarians’ right-wing opponents have done all they can to foster precisely this confusion; for there is a widespread tendency for conservatives to cloak corporatist policies in free-market rhetoric. This is how conservative politicians in their presumptuous Adam Smith neckties have managed to get themselves perceived—perhaps have even managed to perceive themselves—as proponents of tax cuts, spending cuts, and unhampered competition despite endlessly raising taxes, raising spending, and promoting “government-business partnerships.” Consider the conservative virtue-term “privatization,” which has two distinct, indeed opposed, meanings. On the one hand, it can mean returning some service or industry from the monopolistic government sector to the competitive private sector—getting government out of it; this would be the libertarian meaning. On the other hand, it can mean “contracting out,” i.e., granting to some private firm a monopoly privilege in the provision some service previously provided by government directly. There is nothing free-market about privatization in this latter sense, since the monopoly power is merely transferred from one set of hands to another; this is corporatism, or pro-business intervention, not laissez-faire. (To be sure, there may be competition in the bidding for such monopoly contracts, but competition to establish a legal monopoly is no more genuine market competition than voting—one last time—to establish a dictator is genuine democracy.) Of these two meanings, the corporatist meaning may actually be older, dating back to fascist economic policies in Nazi Germany; but it was the libertarian meaning that was primarily intended when the term (coined independently, as the reverse of “nationalization”) first achieved widespread usage in recent decades. Yet conservatives have largely co-opted the term, turning it once again toward the corporatist sense."

It is only when the term "free market" is severed from any historical definition or conventional meaning that the current economic crisis can be explained as a government rescue of a "free market" failure. To solve a "free market" problem that was created by too much government spending, too much government debt, too much easy government sponsored credit, and a market distorted by massive government intervention (along with a large helping of corporate criminal fraud that slipped through the regulatory framework) we are now given to understand that we need to increase government spending, government debt, and create more market distortions with more government intervention. Yeah, that should work. I feel better already. 

 ITEM - Carnivalingus
Some recent collections of high quality blogging punditry which I have neglected to highlight:

• Lagwolf presents Carnival of the Vanities hosted at Dodgeblogium
  
• Bobo presents Bobo's Carnival of Politics - Nov 9 hosted at The Bobo Files.
  
• Thursday presents The Politics and Money Carnival #11 hosted at One Vote Matters.
• TBMD from The Boring Made Dull the moved his Carnival operation, and is now presenting the latest installment at The Carnival of Ohio Politics #142.

UPDATED: Fixed typos, added links

Divided and Balanced.™ Now that is fair.

2010 & 2012 Election Prologue - The Road Back

2010 Senate Races

After a short two year hiatus, we once again have One Party Rule in Washington D.C. Based on historical precedent, we can expect an increasing growth rate for government spending, increasing growth rate in the size and scope of government, constitutional checks & balance undermined, inadequate oversight and a consequent increase in abuse of power and corruption. Arguably, we can also expect to get embroiled in another war. This last seems unlikely with Obama, but... There does seem to be a real appetite from the left for some kind of U.S. intervention in Darfur. And if there is another Rawanda-like genocide somewhere in Africa or Eastern Europe, what will we do? What will Obama do? Tough call.

But on the other hand, we have "Hope" along with our One Party Rule. So, I guess everything will be ok. It is my sincere hope that the Obama administration will be able to avoid these historical pitfalls and prove to be an exception to the One Party Rule. Why not? His campaign and election has shattered historical precedent every step of the way. Reason enough to hope.

But just in case, lets take a realistic look at the prospects for restoring divided government in the next two cycles.

A few days after the 2006 mid-term election I wrote a post looking ahead to the presidential election just completed. In that post - "2008 Election Prologue - Check your assumptions" - I made the easy prediction that the Democrats would expand their majorities in Congress, and further concluded:

"We will need a Republican President in 2008 to maintain a divided government state. Fortunately we have some great Republican candidates. Hagel, Giuliani, and McCain would all make great presidents, and all are a significant improvement from what we have today."

I did not predict a Republican would win, but that electing a Republican President was the only path to continuing divided government.While I got the partisan political environment correct, the voters disagreed with me about McCain as a candidate for president. So it goes.

The predictions were based on nothing more than structural factors in the congressional elections and historical precedent. We'll take the same approach looking forward to the next two elections, and assess the likelihood of reestablishing divided government in pursuit of the expected benefits that go with it. As we did in '06, we'll first explicitly spell out the premises/assumptions, and on that foundation we will build the DWSUWF positions and recommendations for the 2010 and 2012 elections.

NOTE: - You may want to skip this post. It is what I call a "reference post" (more reference posts in the left sidebar). I don't want to have to repeat this analysis over and over in future posts, so I'll keep it here, update it, and link to it as needed over the next two years.

Assumptions

Assumption 1) The Divided Government hypothesis holds true to form.

We had divided government for two years. As outlined in this recent post, we can can document that divided government did indeed begin to incrementally undo some of the damage of One Party Rule along with accruing benefits consistent with historical divided government precedent. One possible fly in the ointment - while 2007 spending growth was indeed restrained, it is yet To Be Determined what the final spending tally will be after we include 2008 spending with bailouts and stimulus packages included. I expect the final conclusion may depend on whether the bailouts are characterized as spending or "investments" as some have suggested. I'll update the blog with a final assessment of our painfully short exercise in divided government in a future post.

Assumption 2) The "100 year precedent" holds for the House of Representatives.

I first learned of the "100 year precedent" from a Ken Fisher analysis predicting election results in 2006.

"A basic rule of politics and a little-known fact: The Senate changes hands so much more easily than the House that in 100 years the House has never changed hands unless the Senate has, too. Since the Seventeenth Amendment allowed for direct election of Senators in 1913, the House majority has never changed hands without the Senate also doing so... For the Democrats to win the House they must win the Senate..."

Fisher used this precedent to predict that Republicans would continue to hold majorities in both house of Congress in 2006, since they had a structural advantage in the Senate races. Here is the interesting part. His prediction was completely wrong, but the 100 year precedent held up! Instead of neither the House or Senate changing majorities as Fisher predicted, both the House and the Senate changed majorities in 2006.

Why is it so difficult to change majorities in the House? Partially because voters tend to like and re-elect their own representative, even if they have a very low regard for Congress as a whole. Approval ratings for Congress were worse than for Bush, but the overwhelming majority of representatives were re-elected. The fact that both parties conspire to gerrymander districts to the advantage of incumbents is another big factor making it difficult to unseat incumbents in the House of Representatives.

After the 2008 election, with 8 seats still undecided, the Democrats picked up an additional 20 seats and will have a crushing 81+ seat majority in the House. Given the difficulty of changing majorities in the House, there is almost no likelihood of Republicans retaking the majority before 2014 and probably longer (even with strong political winds at their back the Democrats only picked up about 20 seats in'08 - do the math).

That leaves the Senate as the only determinant of whether divided government can be restored in 2010. In 2012, either re-taking the Senate or the presidency are possibilities for Republicans. The presidential race will be completely determined by Obama's performance in the first term, and is unknowable now. So, looking forward to 2012, we will also focus on the Senate.

Looking Back

In 2006, the Republicans had a small structural advantage in the Senate races, since 18 Democratic seats were contested as opposed to only 15 Republicans. Nevertheless the Democrats held all of their seats and took six seats from the Republicans and a narrow majority.

In 2008, the Democrats had a huge structural advantage. There were 35 Senate seats contested in 2008 (33 regular and two special elections). Of these, 23 were held by Republicans and 12 by Democrats. Simple numbers - the Republicans had a lot more at risk, and were playing defense. The Democrats had many more opportunities to take seats than Republicans. Big advantage for Democrats. Assuming that the 3 seats that are still undetermined will fall 2-Republican 1-Democrat, the final results will be an 7 seat pickup for the Democrats and a 58 - 42 majority in the Senate.

Looking Forward

In 2010 The Democrats will again have a structural advantage. 34 Senate seats will be contested. Of these, 19 are held by Republicans and 15 are held by Democrats. This is comparable to the advantage that the Republicans held in 2006. It seems highly unlikely that the Republicans will be able to duplicate the feat that the Democrats pulled off in 2006. To retake the Senate, the Republicans would have to hold all their seats, and take more than half of the Democratic seats up for re-election. Obama and the Democrats would have to screw-up on a scale of how the Republicans screwed up in 2000-2006. They would have to pile up a record of corruption and incompetence in two years comparable to what the Republicans did in six. I wouldn't say it is impossible, but it does seem very unlikely. The best the Republicans can expect in 2010 is to either hold serve, not lose any more seats, not lose the filibuster, or pick up a couple of seats and narrow the Democratic Majority.

2012 Senate Races

In 2012 the Republicans will finally have a huge structural advantage in the Senate elections. Of the 33 seats contested, 24 are held by Democrats and 9 by Republican. From this distance, the Republican seats look safe, and after four years of One Party Rule by Democrats, the electorate may be ready for some changes. If the Republicans can pick up two seats in 2010, they will only need to take six of the 24 Democratic seats to regain the majority. As mentioned before, it is probable that the Democrats will retain a majority in the House of Representative, although by then it will have narrowed.

Conclusion / Predictions

• We will have One Party Rule under the Democrats for at least four years.
• The next opportunity to restore divided government will be in 2012.
• The Republicans will have two ways to get there, so I will go out on a limb and make the prediction that divided government will be restored in 2012, either through the Republicans winning the presidency or (more likely) a majority in the Senate. If the latter, we will be in the interesting situation that we have a divided congress, and regardless of which party wins the presidency - a divided government. That's a good thing.
• No telling what shape the country will be in by then.

Addendum - 2010 & 2012 Senate Races

Year - 2010	15 – Dems	19 – Rep
State ↓	Incumbent ↓	Party ↓
Arkansas	Blanche Lincoln	Democratic
California	Barbara Boxer	Democratic
Colorado	Ken Salazar	Democratic
Connecticut	Chris Dodd	Democratic
Hawaii	Daniel Inouye	Democratic
Illinois	Barack Obama	Democratic
Indiana	Evan Bayh	Democratic
Maryland	Barbara Mikulski	Democratic
Nevada	Harry Reid	Democratic
New York	Chuck Schumer	Democratic
North Dakota	Byron Dorgan	Democratic
Oregon	Ron Wyden	Democratic
Vermont	Patrick Leahy	Democratic
Washington	Patty Murray	Democratic
Wisconsin	Russ Feingold	Democratic
Alabama	Richard Shelby	Republican
Alaska	Lisa Murkowski	Republican
Arizona	John McCain	Republican
Florida	Mel Martinez	Republican
Georgia	Johnny Isakson	Republican
Idaho	Mike Crapo	Republican
Iowa	Chuck Grassley	Republican
Kansas	Sam Brownback *	Republican
Kentucky	Jim Bunning	Republican
Louisiana	David Vitter	Republican
Missouri	Kit Bond	Republican
New Hampshire	Judd Gregg	Republican
North Carolina	Richard Burr	Republican
Ohio	George Voinovich	Republican
Oklahoma	Tom Coburn	Republican
Pennsylvania	Arlen Specter	Republican
South Carolina	Jim DeMint	Republican
South Dakota	John Thune	Republican
Utah	Robert Bennett	Republican

2012	Dem – 24	Rep - 9
State ↓	Incumbent ↓	Party ↓
California	Dianne Feinstein	Democratic
Delaware	Tom Carper	Democratic
Florida	Bill Nelson	Democratic
Hawaii	Daniel Akaka	Democratic
Maryland	Ben Cardin	Democratic
Massachusetts	Ted Kennedy	Democratic
Michigan	Debbie Stabenow	Democratic
Minnesota	Amy Klobuchar	Democratic
Missouri	Claire McCaskill	Democratic
Montana	Jon Tester	Democratic
Nebraska	Ben Nelson	Democratic
New Jersey	Bob Menendez	Democratic
New Mexico	Jeff Bingaman	Democratic
New York	Hillary Rodham Clinton	Democratic
North Dakota	Kent Conrad	Democratic
Ohio	Sherrod Brown	Democratic
Pennsylvania	Bob Casey, Jr.	Democratic
Rhode Island	Sheldon Whitehouse	Democratic
Virginia	Jim Webb	Democratic
Washington	Maria Cantwell	Democratic
West Virginia	Robert Byrd	Democratic
Wisconsin	Herb Kohl	Democratic
Vermont	Bernie Sanders	Independent
Connecticut	Joe Lieberman	Independent Democrat
Arizona	Jon Kyl	Republican
Indiana	Dick Lugar	Republican
Maine	Olympia Snowe	Republican
Mississippi	Roger Wicker	Republican
Nevada	John Ensign	Republican
Tennessee	Bob Corker	Republican
Texas	Kay Bailey Hutchison	Republican
Utah	Orrin Hatch	Republican
Wyoming	John Barrasso	Republican

UPDATED: Fixed links, corrected typos, edited for clarity.
UPDATED 06-August-09: 2010 Senate Scenario revised and updated in a new post - 2010 Senate Race Redux.
UPDATED 31-August-10: 2010 Senate Race prediction revised and updated in a new post - Ten in Ten.

Divided and Balanced.™
Now that is fair.
I, for one, welcome our new Democratic Party Overlords.

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