National Election Results Don’t Mean Much for Economy

Although some states have already seen interesting election results, the national stage isn’t as exciting. From an economic perspective, the new Republican majority in the House isn’t going to amount to much more than gridlock, according to the Washington Post’s Ezra Klein:

From the perspective of actually getting anything done in the next two years, there was perhaps no worse outcome. Republicans don’t fully control Congress, so they don’t have enough power to be blamed for legislative outcomes. But Democrats don’t control the House and they don’t have a near-filibuster proof majority in the Senate, so they can’t pass legislation. Republicans, in other words, are not left with the burden of governance, and Democrats are not left with the power to govern. Republicans don’t have to be responsible, and Democrats can’t do it for them.

For the time being, this means that the gains of Obama’s first two years are probably safe. Health-care repeal will not pass the Senate, and if Republicans attempt to defund the program, it will be the House acting on its own — a less tenable position than the Congress acting against the executive. It is also difficult to see major new stimulus programs — for instance, a payroll-tax holiday — finding backers in Congress, as Republicans will not be able to take full credit for them. This will be, instead, a time of implementation for the White House, oversight for the House, and paralysis for the Senate. As for getting the economy back on track, that’s now Ben Bernanke’s job, whether he wants it or not.

The problem with oligarchical musical chairs is that it substitutes dogmatic battles for sorely needed economic policy. If nothing happens in Washington in the next two years, given our current economic state, it’s the equivalent of giving the country a green light to die a slow death.

We need economic reform, badly, which means agreement between the two parties and subsequent action. If everyone’s sitting pretty in their reactionary seats, nothing will ever get done. The only groups that this kind of inaction benefits are status quo beneficiaries–the corporations that prosper under current subsidies and conditions–and the extremists who want to make 2012 their winning ground.