It is decision week in America. With President Obama termed out and Joe Biden not running for office, a new administration will be elected into the white House this week. It doesn’t seem like a stretch, but this seems to have been the longest and most controversial U.S. election we have had in some time if not ever. But, regardless of who gets elected, we will most likely have more bickering, more brinksmanship and more gridlock ahead.
We have all heard that Washington has become more polarized. This means that liberals are getting more liberal and conservatives are getting more conservative. While we may yearn for the days when Republican President Reagan worked with Democrat Speaker of the House Tip O’Neill to implement the changes the nation wanted, those days are behind us. In fact, the trend toward a more polarized Congress started in the 1970s—before the Reagan-O’Neill years.
To track the polarization that was occurring in Congress, political scientists Keith Poole and Howard Rosenthal developed a metric called DW-Nominate that places every politician on the same set of ideological scales. They developed their data by analyzing roll call votes and the scores range from -1.0 (most liberal) to 1.0 (most conservative). The attached graph highlights the highest and lowest score for each party in the House for the 93rd Congress (1973-1974), the 103rd Congress (1993-1994) and the 113th Congress (2014-2015).
We can quickly see that the House has changed dramatically over time (the same is true with the Senate, but the data is not shown). Look at how much each bar (blue for Democrats and red for Republicans) of the 93rd House overlaps. This means that there were Democrats that voted very conservatively and even more conservatively than many Republicans, and vice versa. If we had to label these politicians, we would most likely call them moderates.
Then, look what occurred over the following two decades as we check in on the 103rd House. The amount of overlap is narrowing. Two more decades later and the overlap is gone and is replaced by a gap. This is a visualization of polarization.
It is true that politicians historically worked better together and that the divide between the two parties has only widened over time. Since gerrymandering (redistricting geographic boundaries to favor one party) was one of the main culprits to this polarization, redistricting is most likely the one chance we have to reverse this course. Yet, redistricting only occurs every 10 years when a census is conducted, so, it appears that we may be stuck in a polarized world until at least 2020.
The views and opinions contained herein are those of Bellatore Financial, Inc. and have been researched and analyzed by Jonathan Scheid, CFA, President & Chief Investment Officer.
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