"In a State of the Union address marked by the symbolic comity of Democrats and Republicans sitting next to each other instead of across the aisle of the U.S. Capitol, Obama asked for bipartisan cooperation with the opposition party now in control of the House. Two years into his presidency, his appeal signaled an effort to reclaim the promise of his historic campaign in 2008, in which he asked Americans to embrace a less-partisan approach to governing that set aside old arguments... After two years of battles over his health-care overhaul and other major initiatives, and the rise of the opposition Tea Party movement, Obama again offered the possibility of greater cooperation."

"Welcome to the masochistic pleasures of divided government in America. For two years the Democrats controlled both ends of Pennsylvania Avenue. That did not give Mr Obama the power to enact every measure he wanted (an energy bill and immigration reform were two that fell by the wayside), but the 111th Congress was indeed extremely busy. The Democrats poured hundreds of billions of borrowed dollars into efforts to stimulate a sagging economy, bailed out Detroit’s failing carmakers and passed scores of laws, including one to reregulate the financial sector... Polls show that Americans like divided government. Its fans say that it forces politicians from opposite ends of the spectrum to seek common cause in the centre. “We will move forward together, or not at all, for the challenges we face are bigger than party, and bigger than politics,” said Mr Obama in his speech. For the time being, however, the parties are preparing for battle, not discussing peace terms."

"Passions have subsided, I suspect, because conservatives are less enraged now that they feel they have a voice in the government. Independents repeatedly say in polls that they are fine with divided government. So that leaves only liberals who are really unhappy, witness the 43% who want more changes.

I wasn't happy on election night, Lord knows, but I guess in many ways Obama is better off with a divided government. If the Democrats ran everything, the Republicans, so expert at whining in opposition and ginning up phony accusations, could continue blaming every single bad thing that ever happened on the Democrats. And now, in independent voters' minds, the suspicion that Democrats are going to try to jerk the country to the left are null and void. They know it can't happen. The president and the GOP House have to fight over the middle, which is how the middle likes it, and which is probably on balance good for the country.

The problem is that the middle is way to the right of where it once was, even 15 years ago. Remember, just 15 plus three years ago, Republicans were solidly behind a healthcare plan pretty much just like the one they're going to vote to repeal tomorrow. Divided government has its upsides, and seeing Obama fighting harder for the middle, as we'll see this year and next, will be good. But at some point, the Democrats have to think of something to do about the fact that the middle keeps moving right."

"I have always held the notion that a divided government, in which the President’s opposing party controls at least one house of Congress, is better for economic performance than the alternative. I held this view because in a divided government, nothing gets done... However, it turns out that my intuition proved to be wrong, at least over the time periods I observed. The 10-, 20-, 40-, and 60-year average returns all show that the market outperforms during a period in which one party controls both the White House and Congress and underperforms during a period of division. I do not understand why this is the case. I can only speculate. Perhaps one-party control provides investors with more certainty over future fiscal and economic policies, whereas a divided government generates more uncertainty. One way to test this hypothesis would be to measure the S&P 500’s average volatility each year. If volatility were higher during periods of divided government, this observation might support this hypothesis."

"I am reluctant to link longer term market behavior to any policy or partisan mix in Washington. I've not seen any studies that show a believable, statistically significant correlation between long term market direction and Republican, Democratic, or divided governments. That said - in the short term it is less important whether there really is a correlation so much as whether investors believe there is a correlation. My sense is that most investors believe the stock market will benefit from Republicans taking control of either the House or Senate in the fall. With that expectation, a rising market could very well be a self-fulfilling prophecy."

"Despite the many calls for civility, bipartisanship and a go-along-to-get-along spirit, is a cantankerous, divided, partisan Congress the cure for what ails us? Channeling both James Madison and public choice theory, the Cato Institute’s Marcus Ethridge says yes. “A large and growing body of evidence makes it clear that the public interest is most secure when governmental institutions are inefficient decisionmakers,” Ethridge says in a new paper. In other words, the political process works best when it’s slow and difficult to pass new laws...

The messy lawmaking process envisioned by the Founding Fathers, and championed in the Federalist Papers for the difficulty it created in adding new laws, makes it more difficult – and expensive – for special interests to have their say, argues Ethridge. “The Constitution’s most important innovation — the separation of legislative and executive powers — was based on the framers’ understanding of how political interests behave,” Ethridge says, “The gridlock that progressives abhor neutralizes some of the political benefits that producer groups and other well-heeled interests inherently enjoy.”

"I'm a big fan of divided government. R's and D's can crow all they want and it doesn't matter because we have sweet, sweet gridlock."

"For the first time in Virginia history, legislative redistricting will take place in 2011 under conditions of divided government: the state Senate is controlled by Democrats, while the House of Delegates and governorship are under Republican control. In an interview, political scientist Michael McDonald discusses the implications of those circumstances... Whether the redistricting process will fall victim to partisan bickering, or whether conditions of divided government actually make the process fairer and more transparent, both remain to be seen."

"None of this was particularly surprising. It’s clear that both parties have decided that a period of divided government twelve months before a presidential election is the wrong time to make big moves on entitlements and the deficit. Better to wait, jockey for position, and hope that the correlation of forces after 2012 will be more favorable to their preferred solutions. And it’s clear, too, that they’ve decided (with honorable exceptions) that it’s too risky to even begin building support for the unpopular cuts or tax increases ahead. The bet, on both sides, is that there’s still time to work with, and that the other party will blink, or at least give ground, before the real crunch arrives. Let’s hope they’re right."

"Gridlock is better; at least that’s what history shows for the budget. In contrast to all the handwringing that a divided government is bad for getting things done, it has a far better record for balancing the federal budget than does one-party control in Washington. This, in turn, points to an inescapable fact: Washington’s budget problem is spending, and spending does not happen on its own...

Our deficit and debt problems are the result of conscious and continuous actions - and yes, consensus ones. The media currently bemoaning gridlock as an obstacle to solving our current deficit predicament at the same time refuse to acknowledge what got us here in the first place. Spending is the cause of the budget problem, and it was consensus that was the cause of the spending. America’s political history is of a government operating under checks and balances. Regretfully, its budget history is one of operating out of balance, owing to the writing of checks. Balance in the government is the better alternative to achieving balance in our budget. And it is because that it is the better check on writing checks."

"If President Obama and new White House Chief of Staff William Daley are looking for advice on how to think about dealing with the Republicans in Congress, they might consider a virtual visit to the Harry S. Truman Library and Museum. There, in the archives, is a nearly 10,000-word memo, dated December 1946, written by presidential adviser James H. Rowe Jr. Truman reportedly kept a copy of the memo in his desk for reference as he battled the 80th Congress, where as a result of the 1946 midterm elections both houses were newly in the hands of the Republicans. "Presidential leadership, if it means anything, means no more than how to lead the people only as fast as they will follow," Rowe wrote. "The history of every administration shows that in the final analysis, a president has but one weapon - public opinion."...

Those insights could be particularly useful to Obama over the next two years. If there was one overarching miscalculation during the president's first two years in office, it was the assumption that he could lead the public faster than the public was willing to be led. Whether on health care or the economy, Obama acted boldly - and in his view out of necessity - but failed to persuade the public of the rightness of his actions.

Daley warned of this danger more than a year ago, anticipating the losses the Democrats suffered in November. Rowe's memo is a powerful reminder of what Obama should expect from the new Congress, why confrontation is to be expected and why winning the battle for public opinion should always be in the forefront of his mind. After all, the 1948 elections turned out well for Truman."