Tune In, Sign Out
I’m old enough to remember when most television broadcasts were black and white and content was produced and distributed by three national networks and their local affiliates. After school I’d watch Jonny Quest and Maverick before homework and Jackie Gleason and Mutual Omaha’s Wild Kingdom before bedtime—assuming a stiff breeze hadn’t knocked the antenna out of kilter. On weekends, we watched whatever ball game the networks decided would bring in the most revenue, and if our local teams didn’t make the cut, there was always the ever-faithful radio.
There were the nightly newscasts, 22 minute affairs—not counting the commercials for antacids—delivered by sober white men in dark suits, the souls of understatement. The newsmen came on at 6:00 pm and reappeared for a five-minute update just before midnight, followed by something called “the end of the broadcast day.” Then the studio would shut down behind a sign-off signal until early the next morning when a new broadcast day would begin.
I mention this because, given the pathology that now grips Washington, it is clear we are badly in need of a national sign-off signal. Our political elites have dug themselves so deep in the breastworks of partisan sniping they have abandoned the imperative of governing. It’s bad enough that the party that controls both chambers of Congress as well as the White House is divided from within over issues like immigration, trade and our deadbeat allies; extramural gridlock—the kind that pundits and demographers say will visit us a couple of weeks from now—would jam our two-party system to a premature death.
According to The Wall Street Journal, the president’s party has lost House seats in 18 of the last 20 midterm elections, with an average loss of 29 seats. The last time a president’s approval rating was as low as President Trump’s 40%, Republicans lost 30 seats. This year, Democrats must flip at least 23 seats to take a House majority. They are generally expected to win from 15 to 50 seats. How bad would that be?
I will concede that the economic and market expansions we enjoy today began with the previous administration that faced an unruly, divided government for much of its two terms. Furthermore, I read with interest a note from Wolfe Research arguing that a Democratic majority in both chambers of Congress wouldn’t necessarily tip the legislative scales conclusively in their favor. It pointed out that Trump’s signature legislation like tax cuts and deregulation would be hard to undo without veto-proof majorities. “Gridlock is the likely outcome and the markets love gridlock,” according to Wolfe. Under a Republican president, a split Congress historically has yielded 12% average annual returns. Gridlock also could act as a check on trade policy, reducing that downside risk.”
Still, I am concerned that a paralyzed legislature will lead to the premature end to our current bull market and strong economy. Of what use is historic data when measuring a variable that has metastasized with such fury it has become hardly recognizable? The economy is made up of people, after all, and given the breaching levels of derangement in our nation’s capital, a contested election or impeachment hearing could make the difference between flight or fight. If animal spirits drive markets, what happens if they decide to stay in their caves and watch the DIY channel—particularly now, when everyone is renovating instead of buying because of rising interest rates and elevated home prices.
If that happens, we have no one but ourselves to blame. The 24-hour “news” cycle has done to our body politic what the Big Gulp has done to our arteries. Yet still we imbibe. It is artifice sustained by a gaggle of Beltway retreads, hangers-on and parlor creeps whose job is not to inform but to provoke, and in doing so they have converted the currency of news into an eternal, adolescent rant. As a popular commodity, it is peddled by elected officials and the circle perpetuates itself. As informed citizens, we are hell and gone from Bill Buckley’s Firing Line and This Week with David Brinkley. More’s the pity, as the Brits say.
In our business, we advise clients to mostly ignore their monthly account statements and focus instead on the horizon. We might impose the same discipline on ourselves when it comes to our elected classes, whose long-term failures are obscured by our daily dose of partisan dreck. Meanwhile, gut issues like health care, education, fiscal responsibility, infrastructure, immigration, income disparity and gun violence have been neglected by a succession of administrations from both parties, and with or without a majority in Congress.
Now that’s a scandal worth watching. And don’t forget your sign-off signal.