Following along the lines of my earlier post this morning, like voters across the country Illinois voters have voted for divided government:

Democratic Attorney General Lisa Madigan and Secretary of State Jesse White easily kept their jobs Tuesday, while Republican Judy Baar Topinka won her bid in a political comeback in the state comptroller’s race.

In a tighter contest for state treasurer, state Sen. Dan Rutherford, a Downstate Republican, defeated the office’s current chief of staff, Democrat Robin Kelly, according to unofficial results late Tuesday.

After four years of one-party domination, Illinois’ down-ballot statewide offices are now split, with Democrats sitting as the top prosecutor and head of state licensing and Republicans in charge of writing checks and investing state funds.

With only a single exception every candidate for which I voted prevailed. The exception was that I voted for Forrest Claypool, whom I would characterize as an independent Democrat, i.e. not a regular Democrat, for County Assessor.

Currently, although Pat Quinn has been announced by the media as the winner of the gubernatorial election, Brady trails him by about 8,500 votes. That’s fewer than one vote per precinct and I wouldn’t be at all surprised if that didn’t just provoke recounts but a protracted squabble over who actually won.

More than 250,000 votes were cast for third party candidates, significantly more than the number that separates the Democratic and Republican candidates. This highlights the need in Illinois for electoral reform. We need a run-off process.

Tempus is fugiting, Illinoisans. The Chicago mayoral election isn’t far off and I will be nonplussed if besides a Democratic candidate and a Republican candidate we see one or more independent Democrats, a Green candidate, and a Libertarian Party candidate. If that’s the case and none of the candidates achieve an outright majority, there will be no acceptable outcome unless the top two candidates face each other, one on one, in a run-off.

I strongly suspect that those two would be the regular Democrat and the independent Democrat and such a face-off would be sight to behold.

Après moi le deluge. “After me the floods”. That’s a statement attributed to Louis XV of France. It’s usually interpreted as a prediction but I suspect it’s more of a wish. Regardless, the yesterday’s election has certainly been followed by a flood of bad and fanciful advice, mostly to President Obama. Under the heading of “fanciful” I would place the advice of outgoing Democratic Indiana Senator Evan Bayh:

Having seen so many moderates go down to defeat in this year’s primaries, few Republicans in Congress will be likely to collaborate. And as the Republicans — including the party’s 2012 presidential candidates — genuflect before the Tea Party and other elements of the newly empowered right wing, President Obama can seize the center.

I’m betting the president and his advisers understand much of this. If so, assuming the economy recovers, President Obama can win re-election; Democrats can set the stage for historic achievements in a second term. The extremes of both parties will be disappointed. But the vast center yearning for progress will applaud, and the country will benefit.

He proposes tax cuts and tax simplification, reducing spending on entitlements, and fine-tuning existing legislation, particularly the healthcare reform legislation, to improve them. All of this is advice that would probably be given to him by Republicans.

The problem with it is that moderate Democrats have largely either, like Sen. Bayh, retired or been ousted by Republicans. I doubt that the president will find much Democratic support for these proposals among the more progressive Democratic Caucus that remains. How agreeable the Republican House majority will be to such proposals remains to be seen.

Under the heading of “bad”, place E. J. Dionne:

Obama was not wrong to fight for health care, to stimulate the economy when it was in deep peril, or to push for financial reform. But by failing to defend these achievements, the president and his allies opened the way for partisan critics, who shifted the conversation to airy language about “big government” and “bailouts.” One result: Only a third of Tuesday’s electorate, exit polls indicated, thought the stimulus had made the economy better.

or, in other words, Eppur si muove. And Ruth Marcus:

First, we didn’t do enough. Unemployment would have been even higher without the stimulus, but it is unacceptably high. We’ve had nine consecutive months of private-sector job growth, and we’re going to keep at it for as long as I’m privileged to be your president.

Second, we did, for some of you, too much – too much spending, too much far-reaching legislation. It was unsettling. Every day it seemed we were writing another huge check. I’m convinced, again, that these funds were wisely spent. The much-maligned bailout will cost a fraction of the initial expense – and it saved communities across the country from economic devastation. The stimulus created jobs – and, by the way, provided more than $200 billion in tax relief. The health-care bill carries a big price tag – but I insisted that the cost be fully paid for. I will resist – with my veto pen – any effort to weaken the law that adds to the deficit.

Nevertheless, the era of big check-writing is over. That is why – after some Republicans voted against creating a deficit commission – I did so by executive order. I look forward to receiving their report – and working with Republicans to tackle the debt. And that is why I have been so determined not to rack up another $700 billion in debt by permanently extending the Bush tax cuts for the wealthiest.

Third, I did not live up to my own standards for governing in a post-partisan manner. I was wrong to use the term “enemies.” I’m not going to offer excuses or point fingers. Instead, let me describe what I’ll do differently.

I’m sure there will be a virtually unending torrent of mostly bad advice. I’ll add my own here.

After John Kerry’s loss in the 2004 presidential election, I predicted a struggle for control of the Democratic Party between its moderate and progressive wings. That took place. Moderates engineered the Democratic capture of the House and Senate while progressives took the leadership of both bodies. This effort culminated in the election of Barack Obama to the presidency in 2008.

The feckless Congressional leadership is proximately responsible for the losses in the House and Senate but, ironically, the same leadership is even more solidly ensconced than before, the ranks of moderate Democrats in the Congress being greatly reduced.

Regardless of what Paul Krugman says, you cannot fine-tune the economy. You can introduce things which, in the fullness of time, i.e. with all of the speed of turning an aircraft carrier, will effect changes in the economy. You will inevitably under-achieve or over-achieve. There is no Goldilocks scenario. The reasons for this are well-known and include that in the economy you are dealing with intelligent actors rather than blind forces of nature.

There is a limit to the amount of drag that can be placed on the economy without bringing growth to a halt. Right now the drags on the economy include a dysfunctional financial sector, actions by outside forces, e.g. the Chinese, the Japanese, the EU, beyond our control, and financial, healthcare, retail, and construction sectors that are too large, tying up resources that should be used to make other sectors grow. The reason that I single out healthcare so frequently is that the majority of healthcare spending is financed by the government and, consequently, investments in the healthcare sector are seen as being lower risk which drives investment from other, potentially more productive sectors. Why invest in anything but financial instruments or the healthcare sector when those investments are so risk-free?

Unless unemployment goes down (and employment goes up) I think that President Obama is gone gosling. And that is beyond the president’s control, in the hands of the fates. My advice: look presidential, hope for the best, and be prepared to roll with the punches.

Last night Americans cast a vote for divided government. As of this writing Republicans gained an additional 60 seats to take control of the House of Representatives while gaining six seats in the Senate, fewer than the ten seats that would have been needed to take control of that house of the Congress. Seats remain undecided in both houses of the Congress and, while it is possible that the number of newly minted Republican seats in the House and Senate might grow, the number of freshman Republican House seats may go over 65 and the number of freshman Senate seats could conceivably be as high as eight. In my view the latter is extremely unlikely.

Clearly, I underestimated the number of Republican gains in the House while overestimating very slightly the number of Republican gains in the Senate.

Democratic partisans will undoubtedly try to minimize the significance of this election. That’s claptrap. This is an extremely significant election. The Republican freshman class in the House is the largest in more than 60 years. If it rises over 65 it will be the largest in 80 years. Not only will that have reversed the gains in the House that Democrats achieved in 2006 (many of the Democratic House losses this year were those same new Congressmen), it has bettered the Republican gains of 1994 and, if when the final tally is taken there are more than 65 new Republican seats, it will have reversed the gains of Franklin Delano Roosevelt.

Republicans should not overestimate their victory. As North Carolina Republican Senator Jim DeMint warns in this morning’s Wall Street Journal:

Tea party Republicans were elected to go to Washington and save the country—not be co-opted by the club. So put on your boxing gloves. The fight begins today.

Democrats should not underestimate their loss and their peril. As noted above if the final tally shows a gain of more than 65 seats by the Republicans, the clock will have been turned back to 1930. If the unemployment rate remains stubbornly high, regardless of other economic growth President Obama will be a one-term president and will become the Democrats’ equivalent of Herbert Hoover.

To my eye there were two gains of immediate and significant importance and a larger development that may ultimately assume more significance than the gains in the House and Senate.

The two races I have in mind are the victories of Marco Rubio in Florida and Mark Kirk in Illinois. In the case of Rubio, the Republican Party now has a young, attractive, extremely conservative Hispanic spokesman. Clearly a rising star. In the case of Kirk, he was not only elected to become Illinois’s junior senator, a role formerly filled by the sitting president, he was elected to serve that president’s remaining term. He should be seated immediately and his Republican vote will alter Senate dynamics in the lame duck session. His election is a personal blow to President Obama who pulled out all stops to get his friend Alexi Giannoulias elected to little avail.

The larger development is the election of Republicans at the state and local level, in some cases to seats that have not been held by Republicans in living memory. This will undoubtedly influence the redistricting efforts soon to take place. As the late Mayor Daley once put it, one map drawer is worth 1,000 precinct workers.

It never fails. The phone always rings when I’ve got hands covered with crud.

Lately I’ve been hand-feeding Tally. Every time I sit down to grab a handful of dog food, offer it to her, and have her lap it off my hand, the telephone rings.

I’m about to go out and vote. My preference in virtually all of the major races would be “None of the above is acceptable”.

For Senate I have a choice between one candidate who’s lied to puff up his resume and another whose only credential appears to be that he’ll be a loyal foot soldier.

For governor I have a choice between an incumbent who’s rather apparently beyond his depth in the job and a challenger who won’t say how he’ll accomplish the ambitious goals he’s laid out and has expressed some views on a variety of subjects that differ too much from my own.

For Congressional representative I have the choice between the incumbent and a challenger I’ve never heard of who as best as I can tell has made little effort to reach me in any fashion whatever including media adverts. I’m pretty sure I’ll vote for the incumbent because of his history of interest in ethics reform and transparency. I doubt he’ll make much headway in either area but one can always dream, can’t one?

The major newspapers have been of no help whatever with my decisions. Each paper supports a different slate of candidates, giving highly dubious explanations for their choices.

Here’s the conclusion that Megan McArdle draws in her post on the relationship between federal revenues and federal spending:

A number of my readers are claiming that the only reason Obama is running such a big deficit is that revenue has collapsed. I don’t see that in the data…

Her post is interesting if only for the graphs one of which I’ve reproduced above. She’s certainly right in that whether you believe that the explanation for the source of the federal deficit (not to mention its intractability) depends on your assumptions. A number of things struck me as I looked at the graphs.

First, I think that we need to take the role of bubbles in economic growth much more seriously. I see three bubbles in that graph or, at least, two bubbles and a bubblet.

There’s the dot-com bubble and the housing bubble, of course. Those are represented by the two peaks in the revenue side on the right hand side of the graph. Note that each peak, the latter just slightly higher than the former, is followed by a valley, the latter just slightly lower than the former.

However, over on the left hand side of the graph there’s another much small peak followed by an even smaller valley. That’s the bull market of the 80s.

The spending side is interesting, too. Throughout the 90s, under Democratic Congresses and Republican Congresses, Republican president and Democratic president, spending trends upward at a very low, steady, supportable rate. And then something happens. Spending just goes crazy.

What happened was two things. There were the attacks on September 11, 2001 and our responses to them. During the Aughts President Bush managed to recapitulate virtually every error made by his predecessor Lyndon Johnson during the 1960s. He increased spending to pay for war without reducing domestic spending or raising revenues to pay for it and, not unrelated, he failed to engage the American people in the war effort adequately enough to support the war effort.

I probably should repeat my views here: I opposed the invasions of Afghanistan and Iraq. I don’t want to dwell on this but in the case of Afghanistan in particular I see very little that has been accomplished in going on ten years that couldn’t have been accomplished at vastly lower cost with a punitive raid in force.

Obviously, President Obama hasn’t done a great deal either to reduce the spending on our ongoing wars or to decrease domestic spending or increase revenues to pay for them. I should mention in passing something I’ve documented here previously: maintaining an American soldier in Afghanistan costs three times what maintaining that soldier in Iraq does. Consequently, drawing forces down in Iraq while building them up in Afghanistan will inevitably increase costs even if you withdraw two soldiers from Iraq for every additional soldier you deploy in Afghanistan.

In President Obama’s defense he had to deal with the ongoing wars while contending with an economic slowdown. So did President Bush.

Back to the graphs. Why would anyone assume that the revenue peak of 1999 would continue in linear fashion forever? I can’t see any good reason to assume that and it’s the only way you see revenues staying persistently over expenditures. I see no better reason to assume that the second peak would be expended in linear fashion forever. Indeed, if there’s a trend it’s not a linear one—it’s cyclic one with, on average, revenue not growing at all.

Also, that slow growth during the 1990s is an illusion created by the scale of the graph. Look at the trend since 1950. That’s not a linear graph. To my eye at best that appears to illustrate the effects of compounding, growth at a fixed percentage.

At the beginning a 2, 3, or 5% growth per year doesn’t look like a lot. But when that percentage increase is piled year on year it can become enormous. And if the rate at which expenditures grow exceeds the rate at which revenues grow, it’s a formula for disaster.

There are two different strategies for dealing with such a problem. Either you can expand your revenues to pay for your wants or you can limit your wants to what your revenues will support.

In the interest of balance we should look at federal revenues over the same period. As you can see, they’re not linear either but there’s obviously something seriously wrong starting in 2000. I think that reflects excessive dependence on revenues that are the result of bubbles.

Alexander Burns at Politico is thinking along similar lines to the ones I posted on this morning:

We’re 24 hours away from what countless candidate have told us is the only poll that really matters. On the one hand, it’s easy to say who has a lot to gain or lose this week. Everyone does. But here’s Morning Score’s attempt to narrow that list to the people and groups that have the absolute most at stake – beyond the candidates themselves:

(1) House Speaker Nancy Pelosi, who will be the most watched Democrat in the country on Wednesday morning, no matter what happens Tuesday night; (2) The Obama reelect, which could get a bit easier or a lot harder, depending on the governor’s races in Ohio, Florida and Pennsylvania, among other states; (3) Mississippi Gov. Haley Barbour, the only 2012 contender who leads a campaign committee this year, and whose national prospects get stronger the better the RGA does; (4) The Tea Party Express, which needs to win at least one Senate race from a list that includes Alaska, Nevada and Delaware, or risk being openly labeled saboteurs by the GOP elite; (5) Texas Sen. John Cornyn, whose personal political fortunes will rise or fall based on how a few toss-up races – Colorado, Illinois, Nevada, etc. – come out, especially if they all fall in the same direction; (6) Public Policy Polling, the Democratic-leaning firm that’s been the breakout polling sensation of the 2010 cycle, and handed down a flood of new numbers of the weekend that will either confirm or qualify its reputation.

I think he’s underestimating, if anything, the political infighting that will go on among Congressional Republicans if they win big. It won’t be just a return to the status quo ante of 2006. The freshman Republicans are likely to be much more fiscally conservative than the Republicans of those long ago days (just four years ago).

I don’t think this is the battle that the present Republican leadership was preparing to fight. I think they’ve been preparing to fight the progressive wing of the Democratic Party, not the new hands in their own midst.

For the last several years American politics has reminded me of nothing so much as a scene from an old episode of M*A*S*H in which the entire 4077, assembled in the mess tent, pounds on the tables chanting “We want something else!” If I’d been able to find it I’d have linked to the video.

This year’s election has been going on for some time through absentee voting, early voting, or, in some states, online voting. A little less than 24 hours from now the polls will open in what, if the opinion polling has any credibility at all, promises to be a wave election in which the Democratic gains since 2006 are wiped away to be replaced by Republicans. Here’s how a Democratic “media consultant” has described what may come:

“Everybody that is tied will lose, and everyone that is ahead by a few points will lose because of the GOP wave,” said one party media consultant who is involved in a wide array of House races. “There are going to be some surprises.”

Despite the doom and gloom I continue to be skeptical this will actually be the outcome. This is precisely the sort of cataclysm against which incumbents of both parties have been defending themselves for decades by gerrymandering and otherwise creating “safe” districts. Will the safe districts hold?

My skepticism notwithstanding just for for moment for the sake of argument let’s consider what the electoral map would look like after the election. It would mean that not only the seats current safe for Republicans but those leaning Republican and those currently leaning Democratic would go to the Republicans.

That’s not completely idiotic. Nat Silver, certainly not pulling for Republicans, gives five reasons that the opinion polls may underestimate the size of the wave:

1. Down-ballot and cross-ballot effects
2. Unlikely voters voted — and they voted Republican!
3. The incumbent rule, or something like it, makes a comeback.
4. The Scott Brown effect [ed. a bandwagon effect in which unlikely Republican voters seize an unusual opportunity to elect a Republican]
5. Likely voter models could be calibrated to the 2006 and 2008 elections, which were unusually good for Democrats

Read the entirety of Nate’s analysis.

If that were the case, gauging by Larry Sabato’s district-by-district analysis, not only would Republicans turn over the 55 seats he’s predicting (slightly larger than my current gut-level intuitions), an additional twenty or seats would turn from blue to red. Republicans would take control of the House but that would be the case even according to all but the most rosy of predictions right now.

In the Senate, again gauging by Larry Sabato’s analysis, Connecticut, Washington, and West Virginia would all be carried by the Republican candidates. Added to Dr. Sabato’s 8 seat pickup prediction that would mean that Republicans would pick up 11 seats in the Senate, enough for a Senate majority.

The new House would see a large, very cohesive freshman class of Republicans. In my view if seventy or more seats change hands some of the current Republican incumbents will make common cause with them and it will provoke a leadership struggle among the Republicans in the House. The freshman Republican representatives and their new-found allies among the incumbents could comprise a majority of House Republicans.

It’s impossible to predict what the outcome of such a struggle might be. Virtually anything could happen and people you’ve never heard of could end up being Speaker of the House and holding other senior party roles.

If any of the above comes to pass, it has serious implications for President Obama. Over the last two years I’ve read many comparisons of Barack Obama to past presidents: FDR, Carter, Reagan, Wilson, Johnson. Far from being the new FDR, President Barack Obama could become the second Herbert Hoover, for much the same reasons as the original assumed the role in the popular political consciousness that he did. It isn’t that Hoover didn’t do anything about the Depression; it’s that what he did didn’t work fast enough.