As much as I would love to have Dems control both houses of Congress and the Presidency, the backlash was inevitable, and given the nature of mid-term elections, it’s not surprising to me at all what we’re seeing. I would argue, perhaps overly optimistically that though I would prefer Dems lose neither, it might in a perverse way, if the Dems lose the House and not the Senate (which is what I bet will happen), that it will force a fundamental shift in Republican strategy.
Here’s what I mean in a nutshell. When Dems had both houses and the Presidency, everything became their responsibility, and as such, it didn’t matter if Republican obstructionism caused the partisan tone and constant bickering and gridlock, the Dems had control, they could have (in the minds of the unwashed masses of the electorate) passed whatever they wanted. Anything they passed that anyone doesn’t like (or doesn’t see the full benefit of immediately), AND anything they DIDN’T pass which people wanted them to, will look like a failure on the part of the Dems, and will heighten the “throw the bums out” sentiment.
But what happens when Republicans have some skin in the game as it were? Well, if the Republicans actually do control part of Congress and things get worse, they’re screwed come 2012. What the Republicans will have to do IF they win control of at least one house of Congress is to show that they can get things done that the Dems can not, that would increase their electoral chances in 2012. If they win neither, then they need to redouble their efforts to obstruct Dems in any way they can.
Furthermore, with the way the investment community has taken off in the last week, if the stock market has made significant gains by the mid term elections, investors regard the idea of gridlock as a good thing, because what the investment community wants more than anything is certainty, and to them, certainty that NOTHING will get done is far better than fears that one party running everything might overextend their authority.