The Glory of Gridlock

One of the great media gripes over the past several decades has been “Washington gridlock,” meaning a period when one party controls the presidency and the other has majorities in one or both houses of Congress. Given the institutional bias towards activist government -- virtually every “crisis” story in the press comes with an implied plea for the authorities to “do something” -- it’s not surprising that the media can’t stand it when the government is divided and significant new legislation is a rarity.

But the media is not the nation, and not a few observers outside the MSM tend to value divided government as their favorite variety. As my old partner in blogging Stephen Green memorably put it:

I love divided government.

Divided government often means gridlock, and gridlock usually makes it harder for politicians to launch expensive new programs -- programs which usually rob Peter to pay Peter to not do things Paul doesn’t like Peter to do, while providing tax breaks to both Peter and Paul, unless Peter and Paul are a gay couple attempting to live normal suburban lives together, in which case Peter and Paul can go [blank] themselves, which they were going to do anyway, which is the usual result of all new government programs, only less expensive and meddlesome.

And Steve has a point. The most significant recent spell of divided government fell during the latter half of the 1990s, when Democrat Bill Clinton faced off against a brand-new majority Republican Congress, the first such pairing since the late 1940s. We look back today on the Clinton/Gingrich period as a rare moment of fiscal sanity thanks to the budget surpluses that ran from 1997-2001, but the reality of those years lay much less in clever economics than in plain, old-fashioned personal enmity.

Each side has a preferred version of history here. The Democratic narrative asserts that a “pragmatic” Clinton administration manned by uber-technocrats like Robert Rubin and Larry Summers "ran the economy" to such an efficient level that booming tax receipts and wise budgeting led to a surplus. The Republican narrative just as strongly declares that a noble GOP congress reigned in Clinton’s tax increases and would-be Great Society Junior expansion of government spending, leading to a period of general prosperity.

Both narratives contain germs of truth. After the electoral upheaval of 1994, Clinton (who, unlike Barack Obama, had experienced losing an election himself) had the good political sense to trim his sails, giving more authority to the relatively business-friendly Rubin camp and much less to the Hillary/Robert Reich left faction. But not even Clinton’s Goldman Sachs Masters of the Universe could have predicted, managed, or controlled the tech boom and ensuing productivity explosion that accompanied it.

It’s notable that the economy remained relatively anemic from 1992-1995 (the “worst economy since the Great Depression” of Clinton’s campaign rhetoric actually recovered in early 1992), only hitting its stride about 1996. Some of the credit for that has to go to the new “obstructionist” Congress -- although the record here is also not entirely cut-and-dried. While it’s certainly true that the Gingrich Congress brought much-needed stability by standing firmly in the way of further liberal legislation like the massive 1993 tax increase or HillaryCare, spending in the following Bush/Hastert years tends to indicate that once in power, Republicans were considerably less fond of limited government than they were in maintaining that power through spending.

The fact is that with the notable exception of welfare reform, neither side got much of anything they wanted from 1995-2000. There were few if any major new programs legislated -- which must have driven Clinton straight up the wall -- but on the flip side, tax rates stayed static when the Gingrich revolutionaries would have preferred major cuts, or better still, broad-based structural tax reform.

Certainly Bill Clinton never anticipated or seriously wanted to deliver a balanced budget (by the time he did so in 1998, it was clear that the opportunity for big new programs had long since passed). The GOP produced a famous advertisement in ’96 showing Clinton promising to balance the budget after multiple numbers of years -- but never that year.

Similarly, Clinton’s campaign pledge to “end welfare as we know it” was likely intended to be just as empty as the never-realized "middle-class tax cut." Clinton fought the Gingrich welfare reform effort tooth and nail for nearly two years before being convinced by strategist Dick Morris in the summer of 1996 that signing it would guarantee his reelection.