Political Stalemate?

Bloomberg is reporting Democrats See Victory in U.S. House Races, Senate Within Reach.

Barring an unexpected and big event, Democrats will win control of the U.S. House of Representatives in November and conceivably the Senate, too. Whether it's a tsunami or just a powerful wave, the political dynamics are moving in that direction, or more accurately, against the Republicans and President George W. Bush.

Democratic insiders, who months ago thought their chances of winning a majority in the House were no better than even, and that the Senate was a lost cause, have become far more optimistic. Now, they say, winning the House is a lock, and the Senate is within reach.

``We have to go back to 1974 (during Watergate) to find such a favorable environment,'' says James Carville, who ran Bill Clinton's 1992 presidential campaign. ``If we can't win in this environment, we have to question the whole premise of the party.''

More telling is that the smartest Republican political minds agree. ``The issue matrix and political dynamics are not good for us,'' says Representative Tom Davis, a Virginia Republican. ``Only some big national or international event before the election can change that.''

`People Are Angry'

Bill McInturff, the pre-eminent Republican pollster who sees survey data from all over the country, isn't any more sanguine. ``The national mood is like that of sweep elections,'' he says. ``People are angry about Iraq, about gas prices, about health care.''

Privately, Republican congressional leaders are bracing to lose 20 to 30 House seats -- more than the net 15 gain that Democrats need to take control of that chamber -- and to barely hold on to their Senate majority.

Stalemate

Even with a slight Democratic majority, the next Congress is likely to be just as stalemated on big issues such as reducing taxes or overhauling entitlement programs like Social Security. With Bush wielding a veto pen, Democrats aren't going to enact any important domestic initiatives.

The most important difference -- and the reason the White House desperately hopes to avoid a Democratic House -- will be much more aggressive oversight. With tough lawmakers like Dingell of Michigan and Henry Waxman of California setting oversight agendas, defense contractors such as Halliburton Co., eavesdroppers at the national security and intelligence agencies and anti-environmentalists at the Interior Department will be in for a rough few years.

To win the six seats necessary for a Senate majority, Democrats need a perfect political storm that even a tsunami may not produce. There is, party strategists believe, a good chance to knock off five Republican incumbents; any other victory would be a real upset, and Republicans are competitive for several Democratic-held Senate seats.

Not Playing Defense

The dynamics are different in the House. On a seat-by-seat analysis, there are three-dozen potentially vulnerable Republicans. Conversely, there are fewer than a handful of endangered Democrats. ``They are not playing much defense,'' laments Republican Congressman Davis.

The Democrats enjoy a couple of other tactical advantages. One is that their Senate and House campaign committees have been remarkably successful in raising money; Republicans will enjoy less of a financial advantage than usual.

Another is that in several states where three or four House seats are closely contested -- New York, Ohio and Pennsylvania -- a top-of-the-ticket sweep by strong candidates such as Eliot Spitzer, who's running for governor in New York, and Hillary Clinton, who's going for re-election in the Senate, may be decisive.

Moreover, if there is a national tide, the Democrats will win seats that aren't on anyone's radar screens today. ``There are going to be some people in Washington, D.C., next January that no one's ever heard of,'' Carville predicts.

October Surprise?

To be certain, the party's confidence is occasionally tempered by the realities of recent elections. At a private gathering sponsored by Democratic House Leader Pelosi for some of the party's biggest givers in California early this month, there was a palpable sense that Karl Rove and the White House will engineer some ``October surprise.''

And Republicans, with a better get-out-the-vote system, generally tend to close better in American elections. But October surprises usually are the invention of summer nervous nellies; the public mood, not organization, will shape this year's elections.

In the House, the Democrats nevertheless probably will only win about half the seats they did in the 1974 landslide, when they picked up 48, or that the Republicans won in 1994, 52. In part, this is because of a bipartisan redistricting scam that has resulted in many congressional districts being politically non- competitive. Nowhere is this more evident than in the South, which has seen an unusual alliance of Republicans and African- American Democrats redrawing congressional districts.

Dominant in South

The number of Southern black representatives, all Democrats, has jumped to 16 from just two 20 years ago. Yet Republicans now hold an 82-49 overall advantage in these 11 states, reversing the Democrats 73-43 edge of two decades ago.

The upshot is that even on a banner day, Democrats expect to pick up a net of fewer than a half-dozen seats in the South this November.

The gains in the Northeast and Midwest, however, should be easily sufficient to carry the day. That would return political normalcy to America: divided government. The Republican dominance of the White House and Congress for most of the past six years is the most concentrated control by one party in Washington since the days of John F. Kennedy and Lyndon Johnson.

I am very fearful of the "big event" as God only knows what kind of lies, deceit, or even an attack on Iran the Republicans are willing to do to stay in power.

Yet I look at Hillary waiting in the wings and am about ready give up on some of the alternatives. Yes, I am talking politics but politics are likely to affect what stock sectors someone should be in (if any at all). If Democrats take control of both houses we ould see impeachment proceedings, but the house alone will be enough to make Bush miserable for two more years.

Stalemate will seal the doom on getting anything done. As far as I am concerned everyone should be rooting for just that. Look at all the damage the Republicans have done in the last six years: to the deficit, to the US dollar, to unfounded wars, to nonsensical spending of all sorts, to the environment, to the destruction of the Bill of Rights, and to the first "preemptive warfare" in US history.

Look back on that list and tell me how many of those are truly Republican beliefs. Yet most Bush supporters simply do not care. The only "True Republican" as far as I can tell is Ron Paul.

My dislike of Bush admittedly knows no bounds. But the same (in reverse) can be said for Clinton haters, even though when he was in office the economy prospered.

Here is my official take. Clinton was very lucky and Bush was very unlucky. Clinton had falling interest rates and an internet boom to look forward to. How much luckier can one get? Obviously he can not take full credit for that regardless of what Clinton lovers say.

On the other hand, Bush had an internet bust to deal with. That bust was clearly not his fault so I do not blame him for the loss of jobs, outsourcing to China, or many other things that he is blamed for.

But I can and do blame him for the way he played the cards he was dealt. That blame is the mess in Iraq, the attack on the Bill of Rights, trade issues with Canada and Mexico, inability to pass a flat tax, meddling in complete nonsense over the brain dead Terri Schiavo, handling of Katrina, health care giveaways, signing a law that does not allow Medicare or Medicaid to negotiate group prescription rates, refusal to allow drug imports from Canada and other places, and immigration control and border security with Mexico.

I believe Bush has done more damage to the US than any president other than FDR or Wilson. Here are my top 4 most disliked presidents in no particular order: Bush LBJ FDR Wilson. As you can see, that is not a partisan list.

I do not know what the solution to this madness is. Actually I do (put Ron Paul clones into most government positions), but how likely is that?

Right now I am fearful that one of two things may happen.
1) The country swings to the other extreme and elects a bunch of mindless Democrats led by Hillary in 2008
2) Bush further erodes the Bill of Rights, and Republicans manage to stay in power until they are violently overthrown.

The middle ground for now is to hope Democrats take control of the House, impeach but not remove Bush from office, win the presidency in 2008 but do not win control of both the house and senate.

Perhaps if we can stalemate for 6 more years we can eliminate stupidity on both sides and do no further damage. That may the best we can hope for while waiting for third party alternatives. The market may not like stalemate but it may like stalemate better than any of the current alternatives.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/