Mark Thoma writes that the Democratic party failed to convince the middle class that they were fighting for them and allowed the Republicans to demagogue the policies. While Republicans may not be able to implement their policies, they could damage the Democrat's reputation by proposing bills that they know Democrats will vote against. See the following post from Economist's View.
We'll know for sure later today, but from all indications we are headed for gridlock. With control of the House in the hands of Republicans, and the Senate and executive branch in the hands of Democrats, legislation will be stalled unless it somehow manages to please all sides, an unlikely proposition for the most part.
What I haven't seen much discussion of is how Republicans are likely to take advantage of this by introducing legislation they know won't pass, but scores political points by forcing Democrats to vote against it (this is something the Democrats don't so as well as Republicans). They'll then use the noise machine to talk about how terrible this is for America. We'll see Tax cuts for Working Americans (where you give a few pennies to the masses, much, much more to the upper echelon, then, since there are so many people getting small breaks, claim that the majority of the tax cuts go to the middle and lower classes), the Deregulation of Apple Pie Act (which somehow turns into an attack on the FDA, financial regulation, etc., etc.), we'll see poison pills attached to legislation that must be passed to operate government (e.g. budget bills), it will be one bill after another designed purely to bring about a political fight. There may be legislative gridlock, but there will be anything but political gridlock.
One more thought. I understand that it's the economy that is hurting Democrats most, and that better policy might have helped quite a bit. But policy cannot be enacted unless the political groundwork has been prepared first. It's true that policy can make, say, the middle class believe the administration is fighting for them, something I have argued the administration failed to do. But it's also true that the legislation is unlikely to pass unless there is support for your side of the argument. That requires more than simply introducing legislation. The administration needed to take its arguments to the public and convince them that they were, in fact, fighting for their interests. Saying "I care" matters. Instead, they allowed the other side to take the initiative and demagogue the policies without much of a challenge. The administration surely made mistakes in policy and those mistakes were exploited successfully, e.g. the political optics of the financial bailout were horrible, something that could have been avoided, but it was more than that and the passiveness in the face of aggressiveness from the other side was a prescription for failure.
This post has been republished from Mark Thoma's blog, Economist's View.