This is the core of the president's progressive project-- a new economy in which prosperity is widely shared, opportunity guaranteed, and a broad middle class revived. And it poses a direct challenge to the conservative misrule of the last decades. Market fundamentalism generated Gilded-Age inequality, a sinking middle class staying afloat on debt, unsustainable trade deficits financed by increasing foreign debt, a decaying infrastructure and a staggering failure to provide every child with the nutrition and education essential to fulfilling his or her potential.
It is this basic project that is now in question. The "recovery" seems to be drifting by inertia back to the old economy. Finance is now capturing 30 percent of corporate profits and reopening the casino of Wall Street speculation. The trade deficit is back to over $1 billion a day. China, Germany and other countries with industrial policies are capturing the lead in new energy production. Recovery is declared and attention turned to deficit reduction, even with 24 million people without jobs or forced to work part-time, insuring continued wage stagnation. And worse, the hope, the belief that government could be once more turned to an instrument of common purpose rather than simply a servant of special interests is shaken once more.
The Fierce Reaction
Despite the national crisis, and the president's stunning electoral mandate, it isn't surprising that his program met fierce resistance. Republicans, resentful at being tossed out of power, chose obstruction as their comeback strategy. With remarkable unity, they opposed every major reform, forcing record filibusters in the Senate, doing what they could to frustrate reform.
More importantly, entrenched corporate interests mobilized to defend their subsidies and their privileges. Insurance companies and big banks spent more than a million dollars a day to fend off reform. It has been salad days for Democratic lobbyists. Republican obstruction made it easier to focus on the few Democrats needed to block progress. From day one, conservative Democrats worked against their own president, diluting and delaying reform out of ideological difference or on behalf of special interest influence.
The administration's own limited conception also circumscribed reform. The president surrounded himself with a notably centrist core of economic and national security advisers--the brightest and the best of the Clinton era, but hardly bold reformers. They chose to bail out the banks without reorganizing them. Their financial reform chose to regulate banks that were too big to fail, not break them up. Their health care plan cut back and finally abandoned the public option to compete with insurance companies. The escalation in Afghanistan and increases in military spending dampened any hope of new priorities.
Worse, the administration's willingness to let the Congressional process work and its eagerness to cut deals with large interests and recalcitrant legislators stained the whole process of reform. Energy legislation turned into a corporate feeding frenzy. Drug companies sustained the obscene ban on Medicare from negotiating bulk-price discounts. The "Louisiana Purchase" and the "Cornhusker Kickback," deals cut in the Senate to gain the last votes for health care reform, became infamous.
If unified, Democrats had the votes to force change. Instead, a popular president with a public mandate found himself reduced to bartering with members of his own party to gain support. And that very process made him look less like the herald of a new way of doing business, and more like a traditional politician cutting the best deal he could.
The Rabid Right
Nor is it surprising that Obama's progressive project would generate a hostile reaction on the right. Historically, reform presidents have always roused a rabid and frenzied right, its funding assured by alarmed corporate interests. The right's mighty Wurlitzer--from Limbaugh to Fox to the Wall Street Journal--provides a constant megaphone.
The tea parties have gained national attention, but their reach is exaggerated. To a great extent, they represent an extremist fringe that has always been a part of the right. Much of the outrage is fueled by scarcely hidden racial animosity, reflected in the "birther" conspiracies that label the president literally un-American. What is extraordinary is how much of the leadership of the Republican Party, from Sarah Palin to Newt Gingrich, has competed to echo the attacks. Even the head of the American Enterprise Institute, the Fortune 500's favorite think tank, warned that Obama's reforms threatened America's way of life.
The devastation of the Great Recession and the slow recovery provided
a broader audience for the faux populism of the right. Americans
watched as the government racked up record deficits while bailing out
Wall Street and failing to provide jobs on Main Street. (In fact, the
Obama recovery act added little--too little, progressive economists would
say--to the deficit. The bulk of the deficit was the cumulative effect
of the Bush folly of waging two wars and passing prescription drug
reform while cutting taxes, and the automatic result of the recession,
producing declining revenues and rising costs in unemployment benefits,
food stamps and the like.)
But the combination of deficits, Wall Street's bailout, and the squalid
and corrupted legislative process was a toxic brew. Independents grew
increasingly skeptical. Whose side was the government on?
BP and the Fouling of American Governance
The continuing catastrophe in the Gulf of Mexico rapidly becoming the worst environmental calamity in our history encapsulates the fouling of the American government that the administration inherits.
In many ways, the calamity is a direct legacy of conservative failure. The growing dependence on imported oil exacerbated by the Dick Cheney energy policies and the "drill, baby, drill" posturing of the right--opened the way for offshore drilling at the extreme limits of technology. The conservative disdain for regulation, the weakening of enforcement and the pervasive corruption of government regulators--in this case literally in bed with the companies they were supposed to police--emboldened companies to cut corners and take risks. In the resulting catastrophe, the lack of government capacity left the country dependent on the very corporation responsible for the disaster.
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