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2012 – Year of the Divided Government Dragon

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2012 is the second year of our most recent divided government incarnation, a presidential election year, and the Chinese Year of the Dragon*. In our constitutionally checked, balanced, gridlocked and divided government, it seems appropriate to use the three headed dragon King Ghidorah to illustrate the electoral choices confronting us this fall.

As recently noted by Justin, with the Romney nomination a fait accompli the general election is underway in earnest. I don’t find it particularly useful to look at presidential elections as simply a choice between individual champions of the two major political parties. Between the R and D presidential nominees I find the level of corruption and hypocrisy to be a question of degree. Whether the red or blue team winds up in the White House serves only to indicate which special interests will have the inside track. I prefer to look at the likely final configuration of House, Senate, and Presidency, then make a voting decision by choosing between the most probable partisan configurations.

Voters have seen fit to install divided government four of the last six years, interrupted by two years of Democratic Single Party Rule, and preceded by six years of Republican Single Party Rule. Prior to the Republican reign, we enjoyed what many think of as the golden age of divided government – six years of Clinton/Gingrich. Currently, conventional wisdom among professional prognosticators is that we will again select divided government in 2013-2014.

Charlie Cook is representative:

“With the odds that the 113th Congress will be even more closely divided than the current one, it puts an additional twist to this fall and a potential lame duck session of Congress… Historically, Americans have liked divided government: They fundamentally didn’t completely trust either party. They saw split control as a form of checks and balances. And historically, divided government resulted in compromise: splitting the difference and toning down the excesses from each side. But in today’s more-polarized setting, divided government more often results in paralysis and dysfunction; each party is increasingly influenced, if not dominated, by their most-ideological and less-pragmatic factions. The question is whether the configuration of the 113th Congress will result in even worse paralysis, or force compromise.

Some have taken analysis of future divided government scenarios to another level of granularity. Not content with simply looking at whether a Democrat or Republican sweep is possible, they are handicapping each of the eight distinct possible R & D configurations for the executive and legislative branches, then assessing the relative merits of each.

Steven Johnson at Reuters sorts through two united and two divided scenarios:

“OBAMA RE-ELECTED WITH DIVIDED OR REPUBLICAN CONGRESS …paralysis should not be assumed. Obama would not have to worry about re-election, which could increase his flexibility to deal with the Republicans, who themselves will want to avoid being blamed for failure to deal with the deficit. For Obama, re-election would be a chance to show “he can deliver for the American people,” said Alan Wilde, head of fixed income and currency at Baring Asset Management in London, with $50 billion in assets. “This must mean swift progress on fiscal consolidation and working with Congress in a constructive way.”

Alex Pareene at Salon comments on a Goldman Sachs Analysis:

Goldman Sachs says if you want fiscal conservatism, vote to keep things exactly the way they are. The analysts at Goldman’s Global Economics, Commodities and Strategy Research team have released a note arguing that a divided Congress plus a Democrat in the White House equals “fiscal restraint”… Smart “fiscal conservatives” have long understood that divided government is best for dragging all government business to a halt, which is generally the unspoken (or occasionally spoken) goal of professional “deficit hawks.” Goldman gets that you want Democrats in charge of most of the government if you want a balanced budget, because Democrats crave compromise and balanced budgets and fiscal responsibility, on account of modern Democrats being for the most part Rockefeller Republicans.”

Ron Insana at CNBC made a very granular observation about the single best divided government configuration:

“If you listen to the folks at Ned Davis Research who have tracked this back to 1850, a Democratic President and Republican Congress yields the best stock market returns of any possible governmental combination. If you look at the presidents with the biggest gains in the 20th and 21st centuries, it has been Franklin Delano Roosevelt, Bill Clinton, Barack Obama. Now, it may have nothing to do with them. Maybe they just came in on the bottom of a particular cycle.”

As luck would have it, this is the exact configuration currently favored by the Intrade Prediction Markets. As I write this, Intrade shows President Obama with a 61% chance of being reelected, the Republicans with a 63% chance of taking the Senate majority and a 70% chance of retaining the majority in the House of Representatives.The Intrade Prediction Markets have a good track record of forecasting winners when the election is imminent. While it is a great barometer of current sentiment, it is less reliable as a soothsayer when the election is still many months away. I am guessing it is a better sentiment snapshot than these early Gallup or Pew Polls indicating a statistical tie for President.

For my part, this is how I stack up all eight possible 2013 federal government configurations for the leadership in the White House, House of Representatives and Senate – ranked from most to least likely:

  1. Obama (D), Boehner (R), McConnell (R) [Intrade favorite]
  2. Obama (D), Boehner (R), Reid (D) [Status quo]
  3. Romney (R), Boehner (R), McConnell (R) [GOP sweep]
  4. Romney (R), Boehner (R), Reid (D)[Obama falters]
  5. Obama (D), Pelosi (D), Reid (D) [Epic GOP Fail]
  6. Obama (D), Pelosi (D), McConnell (R) [Only like Obama]
  7. Romney (R), Pelosi (D), McConnell (R) [No incumbents]
  8. Romney (R), Pelosi (D), Reid (D) [Dem tsunami except Obama]

This looks like a horse race tout sheet. I am thinking only Win, Place, and Show have a realistic chance of occurring. Of these, I find the first scenario to be the most likely, and preferable. Nothing against Romney – I just find our constitutional checks and balances work better when our leaders are not all on the same team.

The early call: The Republicans will keep the majority in the House. Senate majority is leaning Republican but it’s too close to call. If the Republicans win the White House it is virtually certain they will also take the majority in the Senate and One Party Republican Rule will again hold sway. Voters who prefer to avoid a return to the “good old days” of 2000-2006 cannot rely on the Democrats holding the Senate, leaving only one certain way to avoid that outcome.

The Divided Government vote for 2012 is a vote to re-elect Barack Obama.



While researching this post, I learned that I was born under the sign of the Dragon – specifically the Water Dragon – the most auspicious, desirable, and luckiest of the Chinese zodiac menagerie:

“Force and power are the symbols attributed to the Dragon… those born under the influence of the Dragon are considered the luckiest of all and good fortune simply follows them wherever they go.. Indeed, whether male or female, Dragons are libidinous and score quite a hit with the opposite sex.”

This addendum has absolutely nothing to do with the rest of this post. I just thought it important to take note of these facts for the enlightenment and edification of the Donk commentariat.

Cross posted from Dividist Papers selections (here, here, and here)