The 'Gridlock' Bogeyman

Many activists complain about the phenomenon of party gridlock.  But a look at history shows that nothing provides more benefits to the people than the division and limitation of power.
Thomas-sowell

Whenever the party that controls the White House does not also control Capitol Hill, political pundits worry that there will be "gridlock" in Washington, so that the government cannot solve the nation's problems.

Almost never is that fear based on what actually happens when there is divided government, compared to what happens when one party has a monopoly of both legislative and executive branches.
      
The last time the federal government had a budget surplus, instead of its usual deficits, there was divided government. That was when the Republicans controlled the House of Representatives, where all spending bills originate, and Bill Clinton was in the White House. The media called it "the Clinton surplus."
      
By the same token, some of the worst laws ever passed were passed when one party had overwhelming majorities in both houses of Congress, as well as being led by their own President of the United States. ObamaCare is a product of the kind of arrogance that so much power breeds.
      
It was the same story back in the famous "first hundred days" of the New Deal in 1933. The National Industrial Recovery Act of 1933 clamped down on the American economy the kind of pervasive government control seldom seen outside of totalitarian countries.
      
It was the ObamaCare of its time, but covering industries right down to local dry cleaners. One man was sent to jail for charging less than the government-specified price for pressing a suit of clothes. This typified the mindset of the New Deal.
      
Fortunately, the Supreme Court eventually declared the National Industrial Recovery Act unconstitutional. But, before that happened, the N.I.R.A. probably did more to prevent the economy from recovering from the Great Depression than any other law or policy. Even liberal icon John Maynard Keynes said at the time that the N.I.R.A. "probably impedes recovery."
      
You cannot tell what effect a law or policy will have by what politicians call it, whether they label it a "recovery" program or a "stimulus" program.
      
Those who fear gridlock in Washington today implicitly assume that government actions are needed to "solve" the economy's "problems." That assumption has been so pervasive over the past 80 years that many people fail to realize that the republic existed for nearly twice that long before the federal government intervened to get the economy out of a recession or depression.
      
During all that time, no depression ever lasted even half as long as the Great Depression of the 1930s, when first President Hoover and then President Roosevelt intervened.
      
For most of the history of this country, there was no Federal Reserve System, which was established in 1914 to prevent bank failures and the bad effects of large expansions or contractions of the supply of money and credit. But bank failures in the 1930s exceeded anything ever seen before the Fed was established. So did the contraction of money and credit during the Great Depression.
       
The seductive notion that some Big Daddy in Washington can solve our problems for us — whether healing the sick, preventing poverty or "growing the economy" — is encouraged by politicians for obvious reasons, and the media echo the idea.
      
Both in Washington and in the media, there is virtually zero interest in comparing what actually happens when the federal government intervenes in the economy and when it does not.
      
More than a century and a half of ignoring downturns in the economy never produced a depression as deep or as long as the 1930s depression, with its many federal interventions, first under Herbert Hoover and then under Franklin D. Roosevelt.
      
The unemployment rate was 6.3 percent when the first big intervention took place, during the Hoover administration. It later peaked at 25 percent, but its fluctuations were always in double digits throughout the 1930s, as FDR tried one thing after another. As late as the spring of 1939, nearly a decade after the stock market crash of 1929, unemployment hit 20 percent again.
      
It is not a matter of faith that a market economy can recover on its own. It is a matter of faith that politicians speed recovery. But there is no way that Barack Obama is going to stop intervening in the economy unless he gets stopped. Only gridlock can do that.

Thomas Sowell is a Senior Fellow at The Hoover Institution at Stanford University in California. He has published dozens of books on economics, education, race, and other topics. His most recent book is The Housing Boom and Bust, from April 2009.

4 comments from readers  

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Small
Dr. Sowell: The fundamental problem is that not for one second is the State actually trying to do something for the people. The need tp shove Obamacare through the house is a clear indication that his motives had nothing to do with caring for the ill of America. It has to do with congtrol of produced wealth, as in Canada. This year we are paying for free medical availability 198 Billion dollars. There are very serious problems in Canada if individual freedom is considered the ideal. Obama is watching us closely. The tragedy is that if it becomes the law in a short while the people will come to believe it is their entitlement. The Republican house must repeal it or all is lost.
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Great column Dr. Sowell, let us hope that this change in congress will slow govt spending. What would be even better is they would close or cut the spending of all the admin agencies that are writing regulation and continue to remove our freedoms no matter who is in power.
Jeff O
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Hi Thomas, You said:

"The seductive notion that some Big Daddy in Washington can solve our problems for us â?? whether healing the sick, preventing poverty or "growing the economy" â?? is encouraged by politicians for obvious reasons, and the media echo the idea."

How can anyone believe this? The country is going bankrupt and nobody wants to see what that will look like. Why do we do everything to speed it up?
Small
Great article. Sowell's columns are always on target, clear and well-reasoned.

I'd like to add my own observation. To paraphrase a past president, "It's the entitlements, stupid!" Since the Great Depression, the aim of the big governement liberals and big goverment conservatives alike has been to increase the entitlements governement grants to people in order to get those people, now entitled to governement benefits, to continue to support the folks in Washington who supplied them. The only difference between most Democrats and Republicans is the class of people whom they favor.

Obama "favors" the broad masses, the unions and those depending on the government for survival (Social Security, Medicare, public school teachers, unions.

Bush was the other side of the coin. He once said, "This is a governement of the haves and the have mores." He was only half-joking.

By the way, the effect of the latest recession is to put many banks out of business -- bank failures are way up in the last 3 years, but the mainstream press keeps that pretty quiet.
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