Why Gridlock is Good

The New York Times believes that we have entered another era of divided government: 

In all three of the most recent earthshaking midterm elections - 1994, 2006 and now 2010 - the same candidate won: divided government.

That is not a coincidence. In the last two decades, a strong and persistent pattern has emerged, one that will dominate our politics for some time to come, because it is rooted in two important political realities. First, the public strongly prefers divided government. Second, it has every reason to.  [emphasis added]

Their article pointed out that from the Great Depression until Ronald Reagan, both parties had a great deal of ideological diversity.  Southern Democrats were to the right of Northern Republicans, for example.  No matter which party was in power, there was a wide range of opinion within the party and like-minded representatives had to work across party lines to get laws passed.  Bipartisanship was needed to get anything done.

In recent years, the parties have sorted themselves out along ideological lines so that just about all Democrats are to the left of just about all Republicans.  We've seen that the system behaves very differently under Republican control than under Democratic control.

When in control of the government, each party has to pander to its center.  The Democratic center is to the left of the electorate and the Republican center is to the right - or at least, thanks to the media, it is generally perceived to be.

Thus, when either party has complete control of the government as the Republicans had for 4 years under Mr. Bush and the Democrats had for two years under Mr. Obama, government is so far from the center than independents become annoyed.  The other party has no incentive to help the government please the voters and throws as many banana peels as possible in the path of the ruling party, thus forcing it to depend primarily on its off-center base.

When the independents vote with either party's base, that party wins.  Unified governments don't last long because governing too far from the center annoys swing voters who'll "Throw the rascals out" no matter how much they may despise the other party.

Gridlock Has Happened Before

In another article, the Times points out that American history suggests that divided government is more the rule than the exception:

But the political instability of our own time pales when compared with the late 19th century. In the Gilded Age the American ship of state pitched and yawed on a howling sea of electoral turbulence. For decades on end, "divided government" was the norm. In only 12 of the 30 years after 1870 did the same party control the House, the Senate and the White House.

The majority party in the House - intended to be the branch of government most responsive to swings in popular sentiment - shifted six times in the era's 15 Congressional elections. Three of those shifts in power entailed losses of more than 70 seats by the majority party (at a time when there were roughly 100 fewer seats than today's 435). In 1894, Democrats shed more than 100. Today's electoral oscillations, for all their drama, seem modest by comparison.

Divided government is not all that unusual in historical terms.  It generally produces far fewer new laws and much less government intervention in our lives, which is just what the Founders intended.  The Times doesn't believe that an inactive government is a good thing:

The history books give us a succession of Lilliputian presidents often described as "bearded, bland and boring."

These men left but the faintest of tracks in the historical record.

It is not as if the Gilded Age did not have plenty of urgent and potentially galvanizing issues: healing the wounds of the Civil War; managing enormous nation-building agendas in the conquered South and the dauntingly arid West; navigating the enormous and rushed transition from an agricultural to an industrial economic base, and from countryside to city; quelling the labor unrest that repeatedly erupted into bloodshed; accommodating the millions of immigrants who streamed ashore in the century's closing decades; and defining an international role for an increasingly prosperous and powerful country, just to name a few.

Yet the era's political system proved unable to grapple effectively with any of those matters.  [emphasis added]

The Times is correct in pointing out that the political system didn't solve any of these problems, but it omits to mention that the problems were solved all the same.  The Gilded Age is portrayed as a time of vast differences in wealth, as indeed it was, but that was because the Industrial Revolution allowed the creation of more wealth than ever before in human history.  It would be ridiculous to expect such massive new wealth to appear exactly evenly, and it didn't; but over the years, it trickled down pretty effectively: our poor people today live better than the kings of ancient times.

How could that be possible?  After all, how can anything good happen without the government doing it?  No less a luminary than Joe Biden, Mr. Obama's Vice President, said,  "Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive."

Mr. Biden's view is representative of the Democrat's political vision - nothing good can happen unless government gets involved, preferably by spending lots of money.

Conservatives believe the exact opposite: that the more money and power is left in private hands, the more good will be accomplished by the private sector.  The history of the Gilded Age, a time when government was generally small and handicapped, private industry "ran amok" - and individual and personal wealth increased exponentially in a way that is difficult to imagine even now, demonstrates that the conservative view is right.

Does Growth Come from Government?

Both parties like to spend our money taking care of their friends.  Spending skyrocketed enough to wipe our the Clinton surplus when Republicans controlled the government, and spending dwarfed Republican excesses when Democrats took over.  When right-wing pundits argued that the Democrats were spending money "like drunken sailors," Navy veterans retorted that sailors had enough sense to stop spending when they ran out of money.

Although government spending is very good for lobbyists and politicians who depend on campaign contributions from citizens seeking government favors, it's bad for liberty because it funds more and more intrusive programs.

Unfortunately, government spending is also very bad for economic growth.  The Economist reports on several studies of the effects of government spending.  The first study involved monitoring the effects of extra federal money directed to states when their Senator takes over chairmanship of a funding committee:

When American politicians become chairmen of congressional committees, they are able to direct federal spending to their home states. To take one example, Richard Shelby, a Republican from Alabama, became chairman of the Senate intelligence committee in 1997. Before that Alabama averaged $6m less in annual federal earmarks, or specific funding, than other states. After his appointment the state received $90m more than the average.

Chairmanships are based on seniority. They require another senator or congressman to lose their seat. Appointments have little relationship with economic activity in the state concerned, and extra spending will occur at all stages of the cycle. It is a truly independent variable.

The academics examined 232 appointments across 42 years. They found the average state receives a 40-50% boost in earmarks in the year following a chairman's appointment, an increase that persisted for the rest of his tenure. Private firms reacted by reducing capital expenditure (by 8-15%) and research and development (by 7-12%); employment and sales growth also suffered. This test appears fairly robust, as it covered a wide variety of states and was also reversed when the chairman stood down.

This study showed that government spending reduces private capital investment, research, and employment by more than the government spends, for a net loss.  The Economist cited a study by Davide Furceri of the OECD and Ricardo Sousa of the University of Minho:

It found that a 1% rise in government consumption as a share of GDP eventually reduced private-sector consumption by 1.9%.

Gridlock is Good

Government spending reduces private spending by nearly twice as much as the amount of the government spending.  Thus, when either party dominates government and can spend money on programs to benefit their friends, we taxpayers lose nearly twice as much economic activity as the total amount of unnecessary government spending.  When the opposition party controls part of the government, the opposition views such targeted spending with alarm and saves us a great deal of money.

Both parties steal as much from us as they can; we need gridlock to keep them in check.  Long live gridlock!