Non-Partisan Post-Election Day Musings

This is the second try at this post, as blogger ate my first one. I suppose that should make this better, tighter, and more focused, so perhaps there was a cosmic method to that.

In my previous post, I had some thoughts about why yesterday's election results were probably not going to be, and, as it turned out, are, not such a bad thing for the country, or the Republicans.

Today, I want to share some insights I had today while discussing the Congressional election results with a few friends. This is primarily a business blog, and yesterday's post was a rare exception to that. Today, I want to discuss my political insights because I believe they have significant implications for US business and economic activity in the near future.

My basic contention is that, after decades of experimenting with Federal Legislative environments featuring large majorities for one or the other party, the American electorate has now arrived at a point of allowing only narrow margins of control in either House, and that this condition will lead to more stable, effective, productive, and better conditions for Americans in general, and business and the economy in particular, in the decades to come.

Suffice to say, I believe that Nancy Pelosi was right in declaring that 'the people have spoken and want a change,' or some similarly expected blather, but not in the way she would like to believe. You see, I believe that the most important outcome of yesterday's election was not the change in House and (probably) Senate leadership, but the narrow margins by which the Democrats have been handed each House.

With two small exceptions- 1958 and a brief span during the Reagan years for the Senate, the House has had a large Democratic majority from the time I was born, until 1994. The Senate was similar, with its Democratic hegemony ending somewhat sooner, as I recall.

However, we now have a situation in which the electorate has left each party within easy striking distance in each election of gaining/regaining control of either or both Houses. This is something profoundly new on the American political landscape for certainly the 50 years that I have been alive.

To be sure, it makes you wonder just how something like this can occur. That is, we each vote for the Representative in our own district, and probably know little about the one next to us. And we can't vote for half of each candidate. Yet, somehow, as the past decade has resulted in such divisive partisanship, voters have slowly moved toward today's razor-thin House and Senate margins.

In fact, taken from a long perspective, it looks like this (I have Googled this topic, and found nothing helpful, so my details may be off, but I'm confident of my general trend information). From the 1940s, under Roosevelt's New Deal, the Democrats achieved large majorities that lasted for most of 50 years. From the late 1980s, the Republicans recaptured the Senate, and, of course, massively regained the majority in the House in 1994.

The results of these large majorities, especially since the Vietnam War era of the mid-1960s, and the departures of 'statesmen' like J. William Fulbright from the Senate, have been to see partisan rancor rise, and consensus legislation diminish. For some 40 years, Americans have have lived with intense animosity among the branches of government, and especially, between parties in each legislative chamber.

Having begun, in the late 1980s, and by 1994, to give the Republicans a chance to do better with large majorities, it seems that Americans have collectively, through a summation of individual House and Senate districts and seats, to have arrived at the conclusion that this is an unworkable approach.

If you view the last dozen years in terms of GOP power in the House and Senate, you see that it has been gently drifting to ever-slimmer majorities. A few years ago we saw a single liberal Republican, Jim Jeffords of Vermont, switch parties after his election, and hand the Senate back to the Democrats for a brief period. In the House, the GOP majority was only something like 30 seats by 2002, and some 15+ in 2004.

Now, we have what party leaders would call "ungovernable" majorities in both the US House and Senate. As I wrote in yesterday's post, this won't actually affect legislation very much in this next two years, as Bush can wield his veto pen.

I think this is what the voters want. Now, each party has the tantalizing prospect of returning to power in the next election cycle in both chambers. Legistlative obstinance, petulance, or uncooperativeness from either party's Congressional members can still lead to the prospect of further punishment. However, unlike the past, where the majority could easily dispense largesse to fend off change of control for decades, now, it will have to behave, or lose control at the very next election. For the minority, in this case, the Republicans, voters have given them the prospect of a reward for 'better' behavior that was missing in the past.

It now benefits neither party to stonewall the other, or become totally uncompromising. Both parties know that control can now change with each two-year election.

In some ways, I think this will make parties less important. With control of the House or Senate so ephemeral, members may need to serve their electors' interests better, and their party ideology less well, because the party won't be in such a position to easily 'reward' the member with committee chairs, etc.

What this may mean for business and the economy is a more centrist, effective, and sensible approach to problem solving in Congress. Because, ultimately, Congress is composed of members who want to be re-elected. Without a party structure to which to look to dispense so much largesse, because neither party can be sure of having control of either chamber, the members will probably need to show progress on key issues, and very little purely negative behavior.

(Added note: Consider this evidence of the preceding paragraph's contention. The Democrats deliberately recruited many centrist House candidates this year, in order to target midwestern and other districts. That is to say, the more liberal party willingly forsook its own extremist wing and deliberately selected, supported and elected House members who will look more like moderate Republicans on many key issues than they resemble the leaders of their own party in Congress. If that does not signal desperation on the part of the Democratic Party, and a resignation to the will of the electorate to find moderate solutions, what does?)

I may be wrong. This may be simply a fleeting moment of small margins of control of each chamber, on the way to another era of overwhelming Democratic majorities. I just don't think that's in the cards, though. The Democrats of the 1970s presided over horrible economic and social conditions for two decades, and managed to retain power. The Republicans barely got half that amount of time before losing control due to ineffectiveness, corruption, and arrogance. IF this is a trend, look for these thin majorities to remain for decades, as the electorate's own check on either party's power in Congress.

One on-air pundit repeated a famous phrase (the source of which I cannot find, even on Bartlett's) which goes something like, "no man's liberty, property or livelihood is safe while the legislature is in session." It seems as if the American electorate agrees, and has finally discovered an effective tool to limit the effects to which the quote refers.

Today's lunch between Pelosi and Bush would seem to indicate that the former realizes she must exhibit the appearance of spirit of compromise, rather than, say, celebrate a coming orgy of liberal legislation at a lunch with Charlie Rangel, David Obey, Henry Waxman, and John Dingell.

Maybe the near-term future for American businesses is brighter after this recent Congressional shakeup.