Hold on to your wallet... Senator Arlen Specter’s switch from Republican to Democrat is Bad News for Taxpayers (and America too). Here’s why.

The term “filibuster” has colorful roots, as Wikipedia observes:

The term 'filibuster' was first used in 1851. It was derived from the Spanish filibustero meaning 'pirate' or 'freebooter'. This term had in turn evolved from the French word flibustier, which itself evolved from the Dutch vrijbuiter (freebooter). This term was applied at the time to American adventurers, mostly from Southern states, who sought to overthrow the governments of Central American states, and was transferred to the users of the filibuster, seen as a tactic for pirating or hijacking debate.

Present-day use more soberly refers to “a form of obstruction in a legislature or a decision-making body.” (Whether that obstruction is good or bad depends on one’s point of view as to the matter at hand.) The filibuster was immortalized in a positive light – as a sort of last refuge of the honest man – in the 1939 movie classic, “Mr. Smith goes to Washington.”

The term carries special weight in the U.S. Senate. If one party has a majority of 60 seats, they are said to be “filibuster proof,” meaning they can override any attempt to hold things up through a process known as “cloture.”

Symbolic, but Important

To be “filibuster proof” is more symbolic than practical. There aren’t all that many filibusters taking place these days – although more of them took place in the 1991-1992 legislative session than in the entire 19th century.

Nonetheless, a 60-seat senate majority is very powerful. In some ways, it’s like having a powerful sledge hammer. The sledge hammer rarely gets used, but everyone knows that it’s there. The fact that one party has it, and the other does not, means the opposition can be smashed if push comes to shove.

In announcing his switch from Republican to Democrat this week, Senator Arlen Specter of Pennsylvania – once an “R,” now a “D” – has given a filibuster-proof majority to the Dems. (Technically the Democrats will still fall one seat short, at 59, but the odds makers say Democrat Al Franken is all but a lock to soon win the nasty protracted battle for Minnesota’s open seat.)

Specter’s switch was almost entirely based on the vagaries of Pennsylvania politics. He saw that to seek re-election as a Republican next year would probably mean losing, whereas a switch to the other side could let him win.

The long run fallout from this move, though, could be anything but local.

Time Magazine gushes that Specter’s switch has given President Obama a “100 day gift,” clearly altering the balance of power in the Senate. In my opinion that “gift” could prove to be a poisoned chalice... for taxpayers, for the Democrats, and for President Obama too.

Gridlock Is Good

Why do I say this? For starters, because one of the big political lessons hammered home over the years is that “gridlock is good.”

Part of the reason the Bill Clinton years are looked back on as something of an economic golden age (if not a moral one) is because plenty of good old-fashioned gridlock kept the “wingnuts” of both parties at bay, preventing Washington from doing anything really and truly stupid.

A filibuster-proof majority, especially when aligned with a president from the same party, is the polar opposite of gridlock. It is an open invitation to go hog wild, damn the torpedoes, storm the barricades... all those clichés one thinks of when imagining a political party drunk with power and unfettered by constraints.

One reason “gridlock is good” is because it gives moderates the upper hand. When two parties on opposite sides of an issue are forced to hammer out a compromise, inevitably the cooler heads get together. This means less meddling, which is almost always better than more. Thanks to gridlock, those of the purist strain on either side of the aisle – the ones who would rather die than compromise – are forced to gnash their teeth, curb their enthusiasm, and otherwise go walk it off.

But in the absence of gridlock, the purists get their revenge. The hardcore elements of the party (whichever party it happens to be) demand to take control of the process. The moderates are either politely muzzled or not so politely told to just shut up.

Obama’s Ambition

President Obama has always been ambitious. One of his noted mottos is “make no small plans.” That is why he ran for president in the first place, and in large part why half the country fell in love with him.

The president’s deep ambition – on display now as the media gushes over the delirious amount of groundwork that has been laid in “the first 100 days” – further explains why Mr. Obama has been so oblivious to the ways in which Wall Street is screwing over Main Street.

Our president is so busy thinking of all the myriad ways in which to save the world, he has had no time to take note of the way his chosen safe pair of hands (Geithner, Summers, et al.) are laying waste to the economy... setting America up for an economic aftermath somewhere between Zimbabwe and Japan.

Note that these observations are not meant to favor one party over another. In Washington as much as anywhere else – likely more than anywhere else – power corrupts, regardless of who it is handed to on a silver platter. This is a sad truth of which we have been painfully reminded.

After all, when George W. Bush (remember him?) won re-election in 2004, he declared to the nation, “I earned political capital, and now I intend to spend it.” We see how well that worked out.

The trouble now lies in the fact that, for all the ambition our president holds, he is least ambitious in the area that matters most – fixing our badly broken financial system (and weeding out the failed charlatans who broke it in the first place). And in the areas where the Democrats brim and bubble with new ideas? Many of them, unfortunately, are fantastically bad ideas – at least as far as sustaining and fueling economic growth is concerned.

That points out, too, why a filibuster-proof majority winds up being bad news for the majority party... after the inevitable over-reach, the consequences of reality delivers to the over-reachers what they deserve. President Obama’s best hope for re-election in the years to come was probably an at least semi-rigorous opposition able to keep some of the Dems wackier ideas in check.

Various signs of “green shoots” have the market in a tizzy... such a tizzy, in fact, that one wonders if the bulls have been smoking said shoots like an especially potent form of marijuana. If Wall Street were not so distracted by its favorite pastime of blowing new bubbles – this one a short-term optimism bubble of epic proportions – traders might notice that Washington’s legislative floodgates are about to open, with all the ugliness that entails.

Other Related Topics: Government Issues , Justice Litle , Macro Trader

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