Remember that term? For you kids, most recently, you heard it brandied about during the Clinton years. Nobody could agree on anything (meaning congress and the President). It was derided, it seems, in the news media and by talking sphincters like Rush Limbaugh who has built his business on divisiveness.
But is gridlock actually a bad thing? I had been wondering for quite a while, and if you just look at the last period of gridlock years, the economy as a whole did remarkably well when that tension existed. In short, as I've said elsewhere, only that which EVERYONE agreed must be done actually got signed and funded.
Well, I finally asked Google the right question, and found this gem.
CFA: Gridlock's Gone, Now What?
In short, "harmony" (the opposite of gridlock) is found to result in the following conditions:
* Unfavorable inflation/interest rate developments
* More beneficial to small-cap companies; very unfavorable to T-bills and bonds.
Here's some math so simple even Jayhawk can understand.
Increased legislative action = more government spending as a percentage of GDP = bad for the economy.
Remember the year that was 2006? Not our government's finest hour as it applies to finance.
2006 Fiscal Policy Year in Review: Process Failures, Budgetary Gridlock - Federal Budget - OMB Watch
2006 was a busy year in federal fiscal policy. As in 2005, the regular budget process broke down almost entirely, increasingly urgent issues were neglected, and much time and attention were devoted to consideration of items and priorities seen by many as insignificant and misguided.
As a result, the nation continues to see its overall debt grow at an alarming rate, to the point where interest expense payments on it are the fastest-growing area of spending. Despite this, the President and Congress remained as focused as ever on enacting still more tax cuts, almost all of which strongly favor the wealthy, provide only marginal broader economic benefits, and dig the country into an ever-deeper deficit hole.
So obviously the democrats have no real fiscal conservatives; they gotta go. Obama/Biden, then straight-Republican for congress.
Intentional gridlock fever. Catch it.