Certainly, a government in which no party has a large majority makes enacting large ideologically-driven changes quite difficult. Wall Street seems to think this is an ideal situation, particularly in an era of large projected surpluses. In the best of all worlds, gridlock means paying down the debt and getting the accompanying lower interest rates. Gridlock also would mean that if projected surpluses do not materialize, we are not much worse off because large spending increases and tax cuts would not have been enacted. This analysis is simplistic and flawed, however.
Narrow margins give disproportionate power to small interest groups.
With small margins, increased vote trading is necessary to pass bills, as small groups have more leverage. One need look no further for evidence of the deleterious impact of this than in the current budget negotiations. The small Republican majority has forced the GOP leadership to accede to Clinton's spending priorities, and it has also fostered a second straight year of huge amounts of last-minute pork barrel spending. Now this is not in itself an indictment of gridlock. Gridlock encourages incoherent spending initiatives.