The New York Times raises the possibility this morning.

A strikingly improving labor market, coupled with broad economic growth and a falling federal budget deficit, is improving the prospects of bipartisan cooperation next year — if Republicans and Democrats can seize on easing fiscal pressures to give both sides some of their wish lists.

The Times harkens back to the 1990s:

Then, as now, a Democratic president was handily re-elected and Republicans enjoyed electoral success on Capitol Hill. After fiscal showdowns that twice shut down the government, Mr. Clinton and a Republican Congress struck a “balanced budget” agreement in 1997 that cut capital gains taxes for Republicans and created the Children’s Health Insurance Program for Democrats — hardly austerity measures.
But Washington could afford such deals with unemployment falling below 5 percent and payrolls rising an average of 284,000 a month.

A few quick reactions.

1. Much of our politics since 2008 has been driven by the terrible state of the economy. It has affected elections, and it has affected the behavior of elected leaders. You don’t have to be an historical materialist to believe that our politics will change if the economy improves.

2. The burst of sunshine generated by Friday’s jobs report seems, to me, overstated. The labor market is still a good distance from healthy. This is affecting the real lives of millions of Americans — many even of prime-working age are sitting on the sidelines of the labor market, not looking for jobs; millions more are unemployed, looking for jobs unsuccessfully, including nearly three million who have been searching unsuccessfully for half a year or longer; and nearly seven million are working part time when they would like full-time jobs. To add insult to injury, wages are stagnant.

This isn’t to say that Friday’s report wasn’t great — it was. It’s not to say that things aren’t much better than they were — they are. And it’s not to say that the pace of improvement isn’t quickening — it is. But so long as our labor market contains this much slack, the effect of “the economy” on our politics is likely to look more similar to the last six years than to the 1990s.

3. I hope the optimists are right and we can get a deal on trade and some sort of tax reform. I would also like an infrastructure deal. The fact that such deals might be in reach makes the president’s immigration action — a direct insult to the Congress and to the spirit of our Constitution — all the more unfortunate.

— Michael R. Strain is deputy director of economic policy studies and resident scholar at the American Enterprise Institute. You can follow him on Twitter at twitter.com/MichaelRStrain.