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Tuesday, October 19, 2010

It's the spending stupid - Part 13,665,926,643,255

BERJAYAThat 13,665,926,643,255 number is the dollar amount that we, as American citizens, now owe to pay for all the spending that we demanded from the politicians that we elected. If you have a problem sorting through all those digits, that number is around $13.7 trillion. It doesn't look so bad when you write it like that.

BERJAYACBS Reports: National Debt Up $3 Trillion on Obama's Watch

"New numbers posted today on the Treasury Department website show the National Debt has increased by more than $3 trillion since President Obama took office. The National Debt stood at $10.626 trillion the day Mr. Obama was inaugurated. The Bureau of Public Debt reported today that the National Debt had hit an all time high of $13.665 trillion. The Debt increased $4.9 trillion during President Bush's two terms. The Administration has projected the National Debt will soar in Mr. Obama's fourth year in office to nearly $16.5-trillion in 2012. That's more than 100 percent of the value of the nation's economy and $5.9-trillion above what it was his first day on the job."
BERJAYAIt is not like we are not getting value for all that debt. We are paying for at least two wars, subsidizing the defense of Japan, Germany, and South Korea, policing the world, and attempting to rebuild several Mideast nations in our image.

Additionally, since coming into office, this administration and the One Party Democratic Rulers that we (meaning you) elected thought it important to step up the spending and borrowing because they decided our government needed to fund:
  • Large increases in public sector jobs while private sector jobs are lost during a recession
  • A record historically ginormous pork filled stimulus plan that does not stimulate.
  • Taking over a corrupt bankrupt insurance company and two bankrupt car companies.
  • Paying down and subsidizing risk the mortgages of people who cannot afford the houses they bought at wildly overpriced levels in a bubble (caused by government policy distorting the housing market by pumping dollars into home ownership for everyone).
  • Bailing out the banks that made the bad home loans by investing in pools of securitized mortgage instruments that hold the bad loans (not to mention the Fed loaning banks money for free).
  • A trillion dollars in new spending on a "reform" health care bill that does not control health care costs, does not cover everyone, is not paid for, and no one understands (least of all the Democratic legislators who steamrolled it over GOP opposition).
As reported by the CBO last week, all this largess added up to a record 21.4% increase in mostly unfunded additional Federal spending in the almost two years of One Party Democratic Rule.

For most people, this looks like a pretty easy equation. A BERJAYAmassive increase in irresponsible unfunded spending over the last two years resulted in massive record setting increases in the deficit over the same two years. It looks superficially as easy to understand as 2 + 2 = 4. But that would be wrong. You see this is actually an example of "scared voters not thinking clearly".

To correctly understand what is happening requires the sophistication and big brains of a liberal Nobel prize winning economist. Paul Krugman is the man for the job. He explains that to understand this spending correctly, you need to consider the spending within the context of a completely imaginary GDP that is much larger than the one that is - you know - here with us on Earth, in the actual U.S. of A. in what we like to call - reality. Then he completely throws out several categories of spending where some of the biggest increases took place, and Ouila! Obama is a positively parsimonious small spender!

OTOH - for all you scared voters like me who are not thinking clearly about this election -

Ed Morrissey sums it up nicely:
"Clearly, while Republicans have been somewhat irresponsible in running up debt, Democrats have managed to be almost three times worse than Republicans. Just as clearly, they have no intention to cut spending to correct this, but instead plan to hike taxes to fund their spending spree. And they’re being led by a President who wants to spend even more, as his own budget projections show."
Or even more succinctly - It's the spending stupid.

Divided and Balanced.™
Now that is fair.
BERJAYA

Sunday, October 17, 2010

The Carnival of Divided Government
ûnus et quadrâgintâ (XLI)
Midterm Election Countdown Edition

BERJAYA

Welcome to the 41st edition of the Carnival of Divided Government - The Midterm Election Countdown Edition. This should be called the Special "Yet Another Late Edition" Edition. I can't come up with excuses anymore. Divided government is an increasingly hot topic, there is a lot of great material, early voting has started, yet I just can't get these out on time. The only solution is to make this harder on myself. Starting now I will be increasing the pressure and publishing the Carnival weekly, to be posted each Sunday in the weeks leading up to and immediately following the election. Lets get on with it.

Carnival of Divided Government

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


BERJAYAFirst up, Bruce Bartlett, writing for the Fiscal Times, looks back to make an historical case for Divided Government, and looks forward to see how Barack Obama's presidency can benefit in - "Political Gridlock Can Save Obama’s Presidency"
"Some observers think that Obama may be given a great opportunity to pivot rightward toward the center by a Republican congressional victory and hence actually benefit, as Bill Clinton did after the Republican congressional victory in 1994. The idea is that liberals in Congress often push Democratic presidents too far to the left and waste his time on issues that are not broadly popular. At the same time, Republicans may provide Obama with an easy foil against which to contrast his moderate manner. This worked very well for Clinton and Harry Truman. And if, as many expect, a lot of not-ready-for-primetime Tea Party members get elected, with crazy rhetoric and impossible demands, Obama may have an easier job than Republicans imagine of repositioning himself for reelection in 2012."
Bartlett uses the word "gridlock" as synonymous with "divided government". This is inaccurate, but I'll cut him some slack as Bruce has been a principled and articulate advocate for divided government for at as long as I have been writing this blog. In 2006, he advocated voting for the Democrats to restrain the big government, big spending policies of the Bush administration, just as he is advocating the voting for the GOP to restrain the Obama administration excesses now. It is tough to be a consistent Dividist across multiple election cycles. One must be willing to change teams and put empirical historical evidence of the benefits of divided government ahead of personal preference. From one principled Dividist to another - well done, Bruce.

Of course not everyone agrees. Unsurprisingly, Kevin Drumm of Mother Jones thinks voting for divided government is only a good idea when Republicans have control of all branches of government.

And on the flip side of that coin -

BERJAYAEd Ross, opining at the Daily Caller, is cheering the restoration of divided government in November, but then goes on to make the case that we'll need One Party Republican Rule to solve our problems in 2012 saying "After the election: restoring the American Dream":
"Americans will wake up on November 3rd to a changed political landscape. Republicans will celebrate. Democrats will recriminate. The underlying fear of America’s downfall that motivated voters to redistribute seats in the House and Senate, however, will remain. The question they asked themselves before the election will still beg for an answer. Is America’s decline inevitable, or can we avert the disasters so many are predicting and restore the American Dream?...

Americans can chose to continue divided government in 2012, but that will only ensure that America’s decline will continue. Divided government in today’s highly charged partisan environment can’t achieve consensus and solve the really big problems Americans face...

as the 2010 election will demonstrate, most Americans don’t believe that President Obama fits that description. He’s not on the ballot in November, but Democrats who supported his policies are; and they will feel the voters’ wrath. In 2012 they’ll have the opportunity to replace him; and it is that election, not 2010, that will determine whether or not we can restore the American Dream."
Yeah... NO. Ross is wrong on many levels, paricularly when he asserts divided government cannot find consensus to solve big problems. In fact, as David Mayhew documented in his seminal work "Divided We Govern", there is no empirical statistical evidence for more or less productivity out of Congress during periods of divided or unified government in the modern era. None. No correlation. No causation. In reality, Congressional productivity "solving problems" is more closely correlated with a "pervasive public mood for change."

The case can also be made that real consensus and compromise can only happen when both parties have a share of power and a seat at the table. One Party Rule leads to bad policy regardless of the party in power.

Finally, Ross is also wrong to claim the election is a mandate rejecting all things Obama. It is not. It is certainly a yank on the leash of a Democratic Party over-indulging in power they've been denied for 16 years. It is a demand for a course correction to a Democratic Party that incorrectly understood what people were voting for in the 2008 election and embarked on a policy of ideological overreach. It was an easy mistake to make, since Obama ran on being all things to all people, Democrats could easily misapprehend which of the mutually contradictory Obama promises people were voting for in 2008. If Obama and the Democrats had embraced as policy the moderate, post-partisan, fiscally responsible centrist image Obama nurtured during the campaign, the Democrats would have maintained their congressional majorities through this election cycle. No matter how David Axelrod tries to"frame" it, tripling the deficit with a 20% increase in spending in two years is not fiscally responsible nor centrist nor sane.

If Ross and the Republicans think this election is a license to reject working with the Democrats to find compromise solutions to the problems he outlines in his post, they will only be planting the seeds of their defeat in 2012. I'm good with that. It may take until 2012, but with both parties chastened and forced to work with each other we'll get real progress and rational real world solutions eventually.

BERJAYAHenry Miller writing in The Daily Caller uses the Obama administration as an example to illustrate convincingly how constitutional checks, balances, and oversight responsibilities are undermined with One Party Rule in "Why we need divided government":
"... as long as both the White House and Congress are controlled by the same party, the congressional oversight mandated by the Constitution is likely to be ineffective. Republicans’ gaining control of either the House or Senate would ensure that at least some of the Obama administration’s transgressions would be investigated and exposed, with committees regularly hauling the bureaucrats into hearings and requiring them to explain their actions and provide copious documentation."
Checks, balances and oversight as the founders intended. Its all good.

BERJAYAAlan Ricketson is a free thinker who has forgotten more about libertarianism than I will ever know. I became acquainted with him when we were both posting at the moribund Freedom Democrat blog. I was pleased to recently rediscover him blogging at Eternal Vigilance, where we find him on the horns of a dilemma, referencing this blog, and wondering "Can I ever vote Republican?"
"I generally buy his argument. What's more, I dislike fanatical partisanship, and the core of the "Divided Government" strategy is the realization that voters should treat parties as part of the system of government, rather than identifying with one or the other. However, the limitation of the strategy is that voters need to vote for parties rather than individual candidates, and we can't have a strong preference for the policies of one party over the others.

So the question that faces me in November is whether I can vote against the Democrats. This shouldn't be too hard for me -- I've voted Democrat occasionally, but have never beet terribly happy with the party or the candidates. For instance, I don't have any particular fondness for Bob Casey, but I despised Rick Santorum, so I voted for Casey in 2006 (and the Republicans had the Presidency regardless). Anyway, for the upcoming election, I looked at my choices to find a Republican Congressional candidate that I could vote for. No luck."
Alan goes on to say he is not going to vote for the Democrats either, so I'll take that half-a-loaf. But his rationale points out why I don't expect this voting heuristic will ever be adopted by more than a sliver of the electorate. It is hard to vote against your preferred political party proclivities.

The good news is that we do not need more than 5 - 7% consciously voting for divided government, to keep the government divided. It does require a shift in mind-set, a willingness to change teams, an appreciation of the benefits of divided government, and a recognition that Republican vs. Democrat is a false choice. The real choice for change in Washington is between voting for Single Party Rule or Divided Government. If you don't like Single Party Rule and the excesses and bad legislation it produces, then you have to vote against it. And to maintain divided government, some will have to vote for candidates we disagree with, or even dislike, in order to get a more palatable and rational federal government we do like.

A final note for Alan - You said you voted for Casey, although you don't agree with him on many issues. I'll ask you to consider whether having your state represented by Casey and Toomey, would not more closely mirror your own values and convictions than having it represented by Casey and Sestak. Finally - consider that Pat Toomey himself may be as much a Dividist as he is a Republican.

BERJAYASusan Collins, the Republican Senator from Maine, has taken fire from both sides of the aisle, and is in a unique position to opine on "Why divided government would be less divisive.":
"I would suggest that a divided government and a more evenly split Senate are more conducive to bipartisanship than the super-majorities and one-party control of the White House and Congress that we see today. When one party has all the power, the temptation is to roll over the minority, leading to resentment and resistance because the minority has so few options... By contrast, when the White House is controlled by one party and at least one chamber of Congress is in the hands of the other, the president has no choice but to reach out and negotiate. It would be a lot easier for President Obama to resist the hard left of his party if he could say he has to pursue legislation acceptable to a Republican House or Senate. Or better yet, from my perspective, both! "
She goes on to complain about the lack of civility in the government and with political discourse in general. Frankly, I don't particularly care about the perceived lack of civility and doubt that it is that much worse than it has been through much of our history. However, I don't see how anyone can argue the main points of her essay.

Politicians of either party will not compromise in a meaningful way with the opposition unless they have no choice. Why would they? As it stands now, the Democrats have all the cards and need only buy off an odd Republican Senator from time to time. There can be no real compromise because there is no need, and as a result, we get steamrolled legislative abominations like the Obamacare hairball and the Stimulus porker. Under divided government it is not likely to get any more civil, but we will get better legislation. It would be impossible to get worse.

BERJAYAI said it would be hard to argue Senator Collins main points in defense of divided government, but Jonathan Chait at The New Republic does it anyway in "Susan Collins and the Vacuity Of The Bipartisan Fetish" (because - you know - One Party Democratic Rule is working out so well):
"A few problems with this thesis present themselves immediately. First, we have a recent example of divided government: 2007-2008, when Democrats controlled Congress and Republicans the White House. It was not an Edenic time of bipartisan cooperation. The next most recent period of divided government, 1996-2000, featured government shutdowns and a wildly partisan attempt to impeach the president."
A few problems with Chait's counter-thesis present themselves immediately. First, he argues against a straw-man by claiming recent examples of divided government fail to meet the absurd standard of an "Edenic time of bipartisan cooperation". What nonsense. No one is looking for Eden. The relevant question is whether we get better, more fiscally responsible governance during periods of divided government. That answer is unequivocally "YES".

Two recent examples of Divided Government were cited by Chait - 2007-2008 and 1994-2000. For a more honest 07-08 assessment reference Slivinski on fiscal results, and recall that in that time period, as a direct consequence of electing a divided government in 2006, we got a new Secretary of Defense, a new Attorney General, a marginal improvement in both the Patriot Act and FISA vs. the Bush/Cheney versions, a great deal more oversight revealing many of the abuses of the six years of single party control (ex - Justice Department), and a revised strategy in Iraq resulting in an improved security situation. These improvements, though marginal, are not insignificant. It is the nature of divided government that improvements will be incremental.

Chiat's other example - the Clinton/Gingrich years - are often cited as a golden age of divided government. The poster child of dysfunctional gridlock is the Clinton/Gingrich budget impasse that shut down the government 1n 1995. That was ugly to be sure. Yet out of that same dynamic during the six years of divided and "gridlocked" government, we got a lot of good, smart governance: NAFTA, GATT, Welfare Reform, PAYGO, Tax cuts, reduction in the growth of federal spending, deficit reduction, growing economy, low unemployment and a balanced budget. I'll take that tradeoff anytime.

The critical factor will be the American people - as it always has been and always will be. When the hue and cry from the electorate gets loud enough, the bullshit stops and the compromise starts. This was true with Gingrich and Clinton. It will also be true with Boehmer and Obama.

I consider it a an indication of the potency of the divided government meme with independents, that it is coming under increasing and more strident attacks from partisans and the left as the election approaches. Case in point - Chiat's fluff piece above, and....

BERJAYA
Valerie Curl at Epiphanyblog, had an epiphany that she would prefer to see the continuation of One Party Democratic Rule. She backs into a rationalization to justify her preference in "Would a Divided Government, At this Time, Resolve Our Challenges":
"Gridlock will not solve these problems. Two years of Congress playing “Is it Constitutional?” or not will not put the American people back to work, increase tax revenues, rebuild the middle class, or solve our fiscal problems or global competitiveness. What most probably will occur, as a result of all the ideologically-speaking odd TEA party candidates being voted into office, is an accelerated stagnation of the economy and loss of global competition. If Republican had put forth serious minded candidates, rather than ideological extremes, then I would have greater confidence in a divided government as a divided government often improves policy. In this particular case, I do not have that confidence, regardless of whether or not Obama wins in 2012…because Obama winning in 2012 is the least of my concerns. My concern is our nation and our people in a world in which global competition can make or break an economy. I do not see, at present, Republicans being serious about this threat to our national economy.”
This is the mirror image of libertarians, independents and limited government conservatives rationalizing a decision to continue to support Republicans in 2006 despite the big spending, big government, big deficit policies of Republican One Party Rule under George Bush.

The rationalization then, was that Democrats were not sufficiently serious about security and the terrorist threat to our country to be trusted with a share of power. That was an equally nonsensical argument to the one Ms. Curl is making here. It speaks more to the partisan prejudice of the one making the argument than any real rationale for supporting one party or the other.

I'm spotlighting her post in this carnival, because of an almost toss-away comment that caught my attention: "Two years of Congress playing “Is it Constitutional?” or not will not put the American people back to work, increase tax revenues, rebuild the middle class, or solve our fiscal problems or global competitiveness." I have not seen this articulated quite like this before, but it is enlightening. I suspect this is an accurate reflection of how many on the left view the Constitution - as an important document, but one that shouldn't get in the way of an enlightened leadership solving the big social and economic problems facing the country.

Again this is similar to those on the right who consider the Constitution an important document, but one that shouldn't get in the way of strong enlightened leadership defending and protecting our country from foreign threats and terrorism. Which all goes to reinforce why neither party can be trusted will all the keys to power. Ever. Voters should never let it happen under any circumstances. We need the left to protect our civil liberties from the right. We need the right to protect our economic liberties from the left. Neither of them are very good at it, but you take what you can get.

Fortunately, there are a lot of independent thinkers who do "get it"...

BERJAYAAs reported on The Hill, the recent Hill/ANGA Midterm Election Poll shows 51 percent of independents prefer divided government:
"Throughout this cycle, congressional Republicans have stressed the need for “a check and balance” on the Obama administration. The poll indicates that message is working. Independents prefer a divided government by 53 percent to 30; undecided voters broke 47-22 in the same direction. Penn said, “This factor could be critical in determining the final outcome of the elections.” In the 2008 election, 53 percent of independent voters in these districts chose Obama for president. The Hill/ANGA poll found that a majority of these voters — 56 percent — now disapprove of the job Obama is doing. Eighty-three percent disapprove of Congress.
I have ever increasing respect for the wisdom of the non-partisan electorate.

BERJAYA Tunku Varadarajan writing at The Beast wrestles with the question of how libertarians in favor or divided government should think about voting for candidates they disagree with and may not even like in "Why I'm Rooting for Sharron Angle":
"If one were to look for anything more intricate or strategic, one could wish for a Republican House and a Democratic Senate, on the grounds that divided government means fewer new laws and regulations. But given that there's a Democrat in the White House, I'd say we've got enough division already, and that we'd be better off with Republicans in charge of both houses—as well as in the state houses and governors' mansions, since they're slightly less beholden to the public-employee unions than are the Democrats. And the Republicans, this time, have been chastened by the emergence of the Tea Party, which should greatly dampen any residual GOP ardor for big government.

Nevada’s Sharron Angle raises similar issues: She, too, is an unconventional Republican candidate, easily typified as “extreme” by the media. There is no doubt that, objectively, some of her positions are, indeed, hard-line. But there are no libertarians, I would wager, who’d like to see her lose to Harry Reid. However distasteful she may be, the political and symbolic importance of defeating Reid is so great that its imperative trumps all distaste. Reid, to libertarian eyes, is the incarnation of our big-government malaise. If he survives, all our hearts will sink and the world will go dark."
I could not agree with Tunku more, although I could quibble with his sloppy definition of divided government. As far as supporting Sharron Angle while holdng ones nose - right. As noted in my last post, watching her in the debate was a teeth grinding horror show. The only thing worse? Watching Harry Reid in the same debate.

Libertarians are not the only ones willing to hold their nose and vote for Divided Government to secure better governance -

BERJAYAThe Rattlesnake, blogging at Electoral Vote Predictor does some analysis, make some predictions, and offer his personal preferences in "17 Days to go, My Personal Endorsement":
"Runyan and the Republicans turn my stomach in a lot of ways. Their backwards views on gay rights, immigration and a host of other social issues frankly make me pretty sick. I wasn't sure until very recently what I was going to do in this election, precisely because of those issues. A friend of mine made a point to me that made the decision very clear. He simply said: "All the social issues you care about don't matter if the country isn't here 50 years from now."

Managing the deficit is a matter of survival for our country, and no, I don't think that is overly dramatic. Our best shot for forcing our government officials to deal with the deficit is a divided government."
It worked before, and it can work again. The Rattlesnake is a Democrat doing the right thing by voting Republican to restore divided government. I respect that. For similar reasons, and because there is no reason to trust Republicans more than Democrats, I expect I will be supporting Barack Obama's re-election in 2012 to maintain divided government.

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 means - no mentions of "divided government" or gridlock.

BERJAYAFor the fourth edition in a row, we again present Madeleine Begun Kane (who practically owns this spot) as she presents Obama's Half-Assed Message posted at Mad Kane's Humor Blog.


Dear Obama, you’re right — Dems must vote.
But there’s something I simply must note:
You’re weak and a muck up.
Don’t tell your base “Buck up!”
All you’re doing is getting our goat.
With that, we'll conclude this edition. As noted earlier, we will be publishing the Carnival weekly as we approach the election. Look for the next edition of The Carnival of Divided Government Duo et quadrâgintâ (XLII) - Continuing Election Countdown Edition - next Sunday 10-24-10. Submit your blog article at carnival of divided government using our carnival submission form.

Divided and Balanced.™
Now that is fair.


Carnival of Divided Government

Thursday, October 14, 2010

"None Of The Above" kicks ass in Nevada Senate debate.


Dear People of Nevada,

I just watched your Senate debate, and I am just so... so... sorry. I feel so bad for you. Really. I mean - WTF?? Look, I don't know how this happened, but you really should try and avoid choices like this in the future.

What to do? If you want to vote NOTA, I get it. It is a tempting choice under the circumstances. But for those of you willing to "man up" and make a decision - lets take a clear eyed view of your choices. There is a real difference. You can choose between a lightweight incompetent, or a craven, duplicitous, heavyweight partisan hack incompetent. Neither is going to be good for Nevada. You need to go with what is best for the country. Obama is going to be President for the next six years. You need to take one for the team and vote for the lightweight. It is the only way to limit the damage. I'm sorry - it is just the right thing to do. Look, it's only six years. In 2016 you can vote for a new Senator and President. Try to give yourself better choices next time.

Your Friend,

The Dividist

Divided and Balanced.™
Now that is fair.


BERJAYA

Wednesday, October 13, 2010

Investors still love divided government. A lot.

BERJAYA
BERJAYALast July 7, we took note of CNBC's Amanda Drury worrying about double D's and Ron Insana offering an explanation for a stock market rally in the midst of unrelentingly bad economic news.

"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." - Ron Insana
On that day the Dow closed up 276 points at just over 10,000 with the S&P 500 up 30 at 1060. Since then, the Dow and the S&P have each added another 10%+. As I have said before, I do not believe there is any case for a statistical correlation between market direction and political parties in power that will stand up to rigorous mathematical scrutiny over the long term.

However, in the short term, if investors believe that divided government is good for markets, then that expectation can be a self-fulfilling prophecy. That may be what we are seeing now in anticipation of the November results. Apparently the investor class really believes that divided government is good for the market.

On Friday, in the face of yet another bad jobs report, the market rally continued, prompting an interesting segment on the Larry Kudlow Report. A panel consisting of Steve Moore (who worked for Dick Armey in '95); Jeff Matthews (investment manager); and David Goodfriend (who worked for Bill Clinton in '95) discussed whether the market's continuing strength was attributable to an anticipation of the return of Divided Government:











Money quotes:
Why did stocks rally though 11,000 today? on this poor jobs report? Might it be hope for Republican tsunami in November? ... I have this suspicion that the stock market is mightily rooting for a Republican tsunami on November 2nd. - Larry Kudlow
"I am not saying this as a Republican - I just think that the financial markets want to see divided government. One party control has not been good for financial assets and it has not been good for workers. " - Steve Moore
The most interesting exchange is between Goodfriend and Moore (around the 5:30 mark) arguing whether Republicans or Democrats could take credit for the prosperity and relative financial sanity that prevailed during the Clinton/Gingrich divided government. I am happy to give credit to both, and to the benefits that accrue when divided government keeps the worst impulses of both parties at bay.

Lest anyone think that Republican Kudlow is being disingenuous when he asserts that the investor class prefers divided government and is not just flogging self-serving Republican spin - let me reprise one of my first YouTube efforts. This from from four years ago, shortly before the 2006 mid-terms. Here we see the selfsame Kudlow noting a rally and wondering if the markets are anticipating the Democrats taking the majority, restoring divided government, prompting what he called the Pelosi Bull Market:


Is 2010 like 2006? Kudlow thinks so. Intrade is giving the Republicans better odds now than they gave the Democrats in 2006.

We can only hope.

And the Dividist is fully invested.

So far, so good.

Divided and Balanced.™
Now that is fair.


BERJAYA

It's the spending stupid - Part 111

BERJAYA

Just in case there is any doubt about why the American people consider One Party Democratic rule to be fiscally frightening, economically irresponsible, and are apparently poised to hand them a stunning, historic, midterm defeat - The CBO released the latest spending and budget numbers last week. From the Wall Street Journal:
"Perhaps you missed it, but then BERJAYAso did the Washington press corps. Late last week the Congressional Budget Office released its preliminary budget tallies for fiscal year 2010, and the news is that the U.S. government had another fabulous year—in spending your money... Once again domestic accounts far and away led the increases. Medicaid rose by 8.7%, and unemployment benefits by an astonishing 34.3%—to $160 billion. The costs of jobless insurance have tripled in two years. CBO adds that if you take out the savings for deposit insurance, funding for all "other activities" of government—education, transportation, foreign aid, housing, and so on—rose by 13% in 2010.

As for the deficits, the 2010 total was $1.29 trillion, down slightly from $1.42 trillion. That's a two-year total of $2.7 trillion, or more than the entire amount during the Reagan Administration, when deficits were supposed to be ruinous. Now liberal economists tell us that deficits are the key to restoring prosperity. But all we have to show for spending nearly 25% of GDP for two years running is a growth rate of 1.7% and 9.6% unemployment...

The 21.4% federal spending increase in two years ought to put to rest any debate about the nature of America's fiscal problem. The Pelosi Congress has used the recession as an excuse to send spending to record heights, and its economic policies have contributed to a lousy recovery. The solution is to stop the spending and change the policies. Polls open on November 2."
You'd think it would be as obvious to the Democratic leadership and party faithful as it is to the American people that flawed policies and batshit insane spending are the prime cause for their impending electoral disaster. Instead, Democrats continue to delude themselves that the election is about crazy Republicans, stupid Republicans, Republicans with too much money, flawed messaging, and Democrats just not attacking business enough.

Sorry Andy, It is not the stupidity, stupid. Maybe it will be in 2012 when the GOP has found new ways to alienate the electorate, but for 2010 - there is no doubt: It's the spending stupid.

It is too late for Obama and Democrats to get religion now and salvage the 2010 mid-terms. But perhaps it is not too late for Obama to salvage his presidency.

UPDATE: Some Democrats get it.

Divided and Balanced.™
Now that is fair.


BERJAYA