Is Gridlock Good?

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Bruce Bartlett celebrates divided government:

Too bad we didn’t have more gridlock in 2001 through 2006, when Democrats retook the House and Senate; it might have saved the country from two unnecessary wars, a lot of dead servicemen and women, a vast amount of spending that the country couldn’t afford, and the intentional destruction of the government’s revenue-raising capacity so that a debt crisis has become almost certain in the not-too-distant future.

Hard to argue with that! But I’m not so sure about this:

Democrats had the bad luck to retake complete control right at the beginning of the second greatest economic crisis in our history. Unfortunately, they played their cards badly. They didn’t have the guts to push a fiscal stimulus plan as large as their economic advisers said was necessary, then they immediately stopped talking about the economy and unemployment, turning their attention instead to health care reform, energy and the environment, and a host of other issues.

I think President Obama and Democrats in Congress are being punished less for economic conditions beyond their control than a perception that they didn’t care enough about the Number One problem affecting the country — slow growth and high unemployment. If they had put aside the rest of their agenda and focused like a laser on restoring the economy to health, they would be in far better shape politically, even if actual economic conditions were no better today.

The premise behind this is that Obama and the Democrats could have done a lot more to improve the economy. But I’m not convinced of that. A bigger stimulus? Sure, that would have helped, but even if they had been gutsier, political pressure wouldn’t have allowed them to pass a $2 trillion bill. It would have been more like $900 billion, or maybe $1 trillion at best. That would have helped, but it’s nowhere near big enough to have made a dramatic difference. Unemployment would still be sky high.

The only other thing I can think of that the administration screwed up seriously is mortgage reform. Again, though, that would have been politically difficult even if they had played all their cards perfectly. Like it or not, the American public hates the idea of seeing their neighbors get bailed out from stupid mortgages. It makes them feel like saps: we scrimped and saved and bought a house we could afford and we’re getting nothing. Joe and Betty down the street lived the high life, took out a NINJA loan they knew was way more than they could afford, and now they’re getting a taxpayer-funded bailout and living easy. That’s not a vote getter.

I think Bruce way overestimates the value of perception. Sure, a better communications strategy might have helped. Getting healthcare done faster might have helped. Beyond that, though, people are mostly reacting to actual pain, and there’s surprisingly little Obama could have done about that. A gigantic stimulus and more aggressive action from the Fed might have done the trick, but Republicans and centrist Dems flatly wouldn’t have allowed the former and the president has no leverage over the latter. Failing that, balance sheet recessions just take a long time to work through. There’s not a lot Obama could have done to change that.

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