State of the Union 2010 (take 4)

How the Democrats blew it

Lance Selfa

The Democrats' failures to help ease the pain of the jobs crisis or promote real health care "reform" have created a political vacuum that the Republicans are trying to fill.

January 29, 2010

IN TWO consecutive national elections, in 2006 and 2008, voters handed the Democratic Party landslide victories. When Barack Obama took the oath of office for the presidency a little over one year ago, the Democrats held the strongest governing majority that either major party had had since the 1970s.

One year later, in the wake of Republican Scott Brown's victory in a special Senate election in Massachusetts on January 19, the Democratic Party is reeling.

Its large congressional majorities are still intact, yet party leaders seem like headless chickens, running around. They appear to accept the Republican spin that losing a filibuster-proof majority in the Senate is tantamount to losing any ability to move their agenda forward. They seem unable to figure out what to do with the health care legislation that has defined much of their work for the last year.

On health care, the Democrats now face a rotten choice, if their statements to the press are any indication: They could pass a bill that is stuffed with giveaways to the medical-pharmaceutical-insurance complex. Or they could pull the plug on the entire effort, and then have to spend the 2010 election year explaining why they wasted months on a bill that they ended up scrapping.

That they could pass a genuine health reform bill without corporate giveaways isn't even up for discussion.

Having given the Democrats a huge opportunity to move the country away from the right-wing Republican dominance of the Bush-Cheney years, voters are now not sure they want to return the Democrats to power in the 2010 elections. The latest Wall Street Journal/NBC News poll put the "generic ballot" preference for which party should control Congress at a tie between Democrats and Republicans. Only months ago, Democrats held a near double-digit lead.

If the Democrats lose Congress and effectively turn President Obama into a lame duck for the remainder of his first term, it would mark perhaps the biggest political collapse since the Great Depression wiped out big Republican majorities in Congress in the early 1930s.

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What went wrong?

WHILE A Democratic debacle in 2010 isn't a foregone conclusion, it's certainly a possibility. How did this happen?

The first part of the explanation is, of course, the recession. Since Democrats "own" Washington, they are certain to be first in line to receive blame from voters looking for help from rising unemployment, poverty and foreclosures. If voters perceive that "the government" isn't doing enough, and "the government" is run by Democrats, then they're the ones who will pay the price.

But if the Democrats were perceived as trying to help ordinary people while the Republicans stonewalled any relief, wouldn't the public at least give the Democrats credit for trying? If they launched a bold jobs program or proposed a genuine national health program, they would have at least provided an answer to critics who charge them with ignoring the public's needs.

Whether because they underestimated the seriousness of the recession or because they're political cowards, Obama and his administration kept their request for an economic stimulus bill early last year to less than $900 billion--and trimmed it further to attract more conservative votes. At that time, independent economists were calling for a stimulus measure focused primarily on creating jobs that was in excess of $1 trillion.

Instead, to win more "bipartisan" support, the administration limited the amount of money allocated to jobs creation and explicitly ruled out direct government jobs programs modeled on the 1930s-era Works Progress Administration. It dedicated far too much of the stimulus, upwards of one-third of the total, to a variety of tax cuts and credits to individuals and business that were useless in creating jobs.

On the health care bill, the White House pursued a strategy of involving industry "stakeholders" in writing the legislation. As a result, the proposals that emerged contained a number of unpopular provisions, from the mandate for all people to buy health insurance, to taxing health care benefits for those with good benefits packages, to cutting billions of dollars from Medicare.

Because of these concessions--all offered as the cost of continuing to do business with the medical-industrial complex--a majority of Americans turned against health care reform.

Just how damaging were these concessions, which many Democrats, health industry policy wonks and business analysts considered necessary? Findings from an AFL-CIO poll of voters in the Massachusetts special election found union members divided their votes equally between Brown and Democratic candidate Martha Coakley--in a state where the Democratic candidate normally wins two-thirds or more of union votes.

Pollster Guy Molyneaux told the Wall Street Journal that he found "pretty strong evidence" that union workers may have been concerned about the "Cadillac benefits" tax. AFL-CIO spokesperson Karen Ackerman went so far as to call the union vote for Brown a "working-class revolt." She continued: "What happened in Massachusetts is that working families did not see the Democratic candidate as being on their side."

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What about Obama?

THEN THERE'S President Obama, who is proving himself to be the same cautious politician he was before he found that calls for "hope" and "change" moved crowds during his 2008 primary and general election campaigns.

Despite his campaign's positioning as the outsider against the "establishment" choice (Hillary Clinton), Obama was and is a figure tightly bound to big business forces in the Democratic Party.

Investigative journalist Ken Silverstein documented the creation of Obama's money and political machine a few months before he announced his intention to run for president: "On condition of anonymity, one Washington lobbyist I spoke with was willing to point out the obvious: that big [Wall Street] donors would not be helping out Obama if they didn't see him as a 'player.' The lobbyist added: 'What's the dollar value of a starry-eyed idealist?'"

In 2008, Obama out-raised and outspent the Republicans and John McCain, winning particularly crushing margins in donations from the financial sector. Given this information, it doesn't take a genius to see why Obama and his economic team have been reluctant to really crack down on the Wall Street barons who helped to wreck the economy.

Yet what has seemed most bewildering about Obama--and most demoralizing to his most fervent supporters--is his failure to "lead" in the way that they thought he would. This may be one of Obama's personality traits, but its root is Obama's commitment to what writer Kevin Baker called "business liberalism"--President Bill Clinton's formula.

Baker, in a Harper's article that compared Obama to President Herbert Hoover, explained that "business liberalism" is:

a chimera, every bit as much a capitulation to powerful and selfish interests as was Hoover's 1920s progressivism. [It] espous[es] a "pragmatism" that is not really pragmatism at all, just surrender to the usual corporate interests.

The common thread running through all of Obama's major proposals right now is that they are labyrinthine solutions designed mainly to avoid conflict. The bank bailout, cap-and-trade on carbon emissions, health-care pools--all of these ideas are, like Hillary Clinton's ill-fated 1993 health plan, simultaneously too complicated to draw a constituency and too threatening for Congress to shape and pass as Obama would like. They bear the seeds of their own defeat.

Obama's penchant to reach for compromise and "bipartisanship" is exactly the opposite of what is required today, Baker wrote, which is "one of those rare moments in history when the radical becomes pragmatic, when deliberation and compromise foster disaster."

What goes for Obama goes ditto for other congressional Democratic leaders. As Harvard University social policy expert Theda Skocpol told the New York Times, "Even in the majority, Democrats still have many ties to business interests and quietly look for excuses to avoid doing things that offend them. Not being able to act without 60 votes is a ready excuse."

You might have thought that the near-meltdown of the world economy in the panic of 2008 would have caused even some of the Clintonites that Obama hired--like Treasury Secretary Timothy Geithner or top economic adviser Lawrence Summers--to reconsider their pro-business agenda of the 1990s.

But instead, it appears that the crisis provided them with the opportunity to spend a vast amount of money--more than Clinton ever did--without really changing their neoliberal policy assumptions.

Call it "Keynesian neoliberalism," but it amounts to putting trillions of taxpayers' dollars at the disposal of private business, and trying to "incentivize" it to carry out social policy. It hasn't worked--either in the bailout of the banks or several attempts to stem the mortgage crisis. The banks and big corporations have been happy to take the money, but they haven't committed to lending money, saving homes or hiring workers.

No wonder more and more Americans see the Obama administration as a bankers' administration--in the same way that they came to see the Bush-Cheney regime as an "oil and gas" administration.

A September 2009 Economic Policy Institute poll asked a national sample of registered voters to say who they thought "been helped a lot or some" from the policies that the administration had enacted. The result: 13 percent said the "average working person," 64 percent who identified "large banks," and 54 percent who said "Wall Street investment companies."

The administration's perceived coddling of Wall Street is so ingrained in the public eye that Obama's more recent proposals to tax bank profits and his more "populist" rhetorical tone seem like phony posturing.

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Headed for a train wreck?

JUST ABOUT every observer predicts that the Democrats are going to have a tough time in the upcoming midterm elections. It's no longer folly to consider the possibility of the discredited Republican Party returning to power in Congress.

Obama still has a reserve of goodwill in the American population to tap. His approval rating stands at about the same place Ronald Reagan's did at the same point in his administration, which likewise assumed power during a deep recession. If Obama and the Democrats change their approach and begin producing "change" that more people can perceive, then they might limit their losses in November.

The problem for Obama and the Democrats is that these changes of perception, or even real improvements in the economy, may not happen fast enough to save them. So we could be looking at a Republican comeback by the end of this year.

A Republican victory wouldn't mean that the majority of the population has suddenly come to accept the loopy conspiracy theories of Fox News' Glenn Beck or to believe that Obama is trying to jam a socialist agenda down their throats.

But in an atmosphere of economic devastation, with the perception that the government isn't doing enough to help, it's easy for millions of people to vote for the Republicans to show their displeasure with the Democrats who are running the government.

The duopolistic (two-party) nature of mainstream American politics constantly reduces complex reality to these kinds of choices. No doubt a substantial minority of the population (as much as one-quarter of the electorate) fully endorses the right-wing opposition to Obama that the "tea parties" represent.

But most people who aren't so ideologically committed to a right-wing program could end up voting for the conservatives for more mundane reasons.

First, there are usually only two choices. The Democrats' failures have created a political vacuum that the Republicans and tea partiers are trying to fill. Second, when the Democrats haven't delivered--and worse, look like they're not sure what they're doing--why should anyone vote for them?

Under the U.S. two-party system, the Democrats play the role of offering an electoral outlet where workers, the poor and oppressed groups such as women, racial minorities and LGBT people feel like they can make themselves heard. But the Democrats' nature as a big business or capitalist party means they are constantly forced to attack their "base," thereby undermining their own support.

If working people end up opposing health care reform because it's going to cut Medicare and raise their taxes--and if the people who are in favor of health care reform can't convince them that there's a tangible benefit in it for them (and not one that only takes effect in 2014!)--then Democrats shouldn't be surprised when their "base" refuses to turn out to vote, or when independent voters desert to the Republicans.

The Massachusetts election showed both phenomena. Voter turnout in heavily Democratic Boston was down 35 percent from the 2008 election, and one out of five Obama voters voted for Brown.

If there isn't an alternative to the Democrats coming from the left--whether in the form of a third party challenge, or a strike or social struggle, or even the unions standing up and saying "we're not going to take this anymore"--then opposition to the Washington status quo will fall by default to the right.

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Columnist: Lance Selfa

Lance Selfa is the author of The Democrats: A Critical History [2], a socialist analysis of the Democratic Party, and editor of The Struggle for Palestine [3], a collection of essays by leading solidarity activists. He is on the editorial board of the International Socialist Review [4].