Earlier this week, the U.S. Bureau of Economic Analysis released a report revising GDP growth in the second quarter of 2024 upward, from 2.8% to 3.0%. Although the jump itself was not enormous, it confirmed what most economists already knew: the American economy remains the engine of growth for the entire world. In the post-pandemic era, the United States stands alone among developed nations in producing powerful, positive economic growth, quarter after quarter.

To be clear, this isn’t to say that the economy is without its problems or that it is necessarily clear of the possibility of a “hard landing” resulting from the Feder Reserve’s tighter money policy. Neither is the case, and the data on the economy can appear just as bleak one day as it appears encouraging the next. Economics is the dismal science, after all, and economic forecasting is often no more “scientific” than reading chicken entrails.

Nevertheless, if given a choice, most people would take the American economy right now, warts and all, over any other economy in the world—and for good reason.

As she races toward November and the hope of claiming the title of “most powerful person in the world,” Vice President Harris is insisting and will continue to insist that she deserves credit for the persistence of the nation’s macro-economic health. From her perspective, this makes perfect sense, of course, since that’s what politicians in power do when the economy is strong. From a more balanced perspective, a more realistic perspective, however, it’s mostly nonsense. In almost every case, and in this case most especially, claims of positive government impact on the economy are mistaken—completely backward, in fact. The American economy continues chugging along nicely, not because of the efforts of our politicians in Washington, but in spite of them. In the end, government is the only thing that can really slow the American economy, and “Bidenomics,” if left unchecked, would do so rather convincingly.

Several points are worth noting along these lines.

First. It is important to remember that the first two years of the Biden administration were also the worst two years for the economy. Inflation skyrocketed, economic growth slowed substantially, and the term “stagflation” was tossed about quite a bit. Granted, this was immediately after the pandemic and its unprecedented economic shockwaves, but it’s also the case that President Biden and Vice President Harris had control of all of the levers of power in Washington at the time. The Democrats controlled the House and, by virtue of a complete GOP collapse in Georgia, also controlled the Senate (albeit only with the vice president’s tie-breaking vote). The federal bureaucracy was reinvigorated under like-minded leadership, and there were, technically, no limits on the amount of legislation and regulation the Democrats could enact. They had a free hand, and they used it poorly.

Fortunately, in November 2022, all that would change.

About five weeks before the midterm elections, Tom Nichols—a writer for The Atlantic, an anti-Trump former Republican and the white knight of “expertise”—told a national television audience that one of his greatest fears was that a Republican victory would “paralyze” the country.

In the mirror, it won’t take that long for the institutions of government to simply cease to function after a while because you can’t get nominees through that kind of a process. You can’t run institutions and cabinet departments with that kind of process, and I think David Cicilline is absolutely right, they will just launch investigations and all kinds of other drama-laden things that appeal to their base, but that will essentially paralyze the country sooner or later.

It’s not often that one gets to say this about Nichols, but he was right. And it’s even less often—vanishingly so—that anyone ever even thinks this, but thank heaven that he was.

Nichols described divided government as a terrible, horrible, no good, very bad thing, but he did so only because he is an ignoramus and because he let his feelings and emotions get the better of him. In truth, divided government and “paralysis” are pretty much the way things were set up to work in this country in the first place. Thomas Jefferson likely never said “That government is best which governs least,” but his fellow Virginian, James Madison, said a great deal that conveyed the same sentiment.

As the political historian Jay Cost has noted, the American system of government is probably “best understood as one of mediated majority rule.” What this means is that “the people at large are the only source of sovereignty, but that sovereignty is tempered in multiple ways.” Madison, in his wisdom, built “mediation” into the Constitution, specifically to make it difficult for the government to “do things,” especially BIG things. Liberals and Progressives complain about this all the time, wishing that the United States could be “China for a day” so that the government could force big and “important” changes on the people. Fortunately, that’s not how it works. And much to their dismay and that of people like Tom Nichols, Madison explained very clearly in Federalist 51 why Congress (and the courts) exist to check the executive (and vice versa, of course). The “paralysis” about which Nichols complained “paralysis” is, in fact, precisely what the Founders intended.

Back in the 1990s—when Bill Clinton was president and Newt Gingrich was the Speaker of the House—I and a handful of others in politics and the markets started referring to this as “blessed gridlock.” After Newt and his revolutionaries took Congress in 1994, Bill Clinton became a pretty good president (at least from a fiscal perspective). Out went the massive tax hikes and government task forces with Hillary in charge. In came (comparative) fiscal discipline, balanced budgets, slow and small tax cuts, and welfare reform. Bill Clinton, the radical who wanted to do grandiose things like nationalize 14% of the economy, was replaced by Bill Clinton, the guy who just wanted to ogle young women and bask in his popularity.

Historically, Blessed Gridlock has been a mixed bag for financial markets, with divided government occasionally breeding greater volatility. At the same time, Gridlock tends to pacify government, generally leading to lower spending, fewer non-incremental policy changes, and less likelihood of significant foreign entanglements.

I am, for the first time in years, at least nominally optimistic about American business’s willingness to put aside politics and get back to business. At the same time, however, I am extremely worried about the government’s ability to undo the progress that business and capital markets seem to be making. Today’s Democrats are not socialists so much as they are corporatists, and they desperately want Big Business and Big Government to work together to do the “big things” government cannot do alone. Fortunately, Madison was prescient, and divided government is the best hedge against those impulses.