1. The president sold his soul to Wall Street. Why else would he choose Tim Geithner as secretary of the Treasury? Regardless of the president’s occasional populist outbursts (“Those goshdarn bankers! Goshdarn them anyway!”), Geithner has never deviated from the script: a) the U.S. cannot prosper without being the center of world finance; b) our banks and financial institutions cannot maintain world leadership without having the world’s best, most highly motivated employees (that is, the ones who drove the world economy off a cliff and made Washington, DC assume all responsibility for the wreckage); c) our banks can only obtain these employees by paying the highest salaries in the world; d) they can only afford to pay these salaries if they are allowed to do exactly as they damn please, with no talk-back from anyone.
2. Obama’s victory was far more a reaction against Bush’s Wall Street bailout than anyone in the Democratic Party realized. We supported TARP! The American people support us! Therefore, the American people support TARP! QED! This logic was faulty.
3. The Republicans, sensing (rightly, I think) that they would be destroyed as a party for a generation if they played ball with the Democrats, deliberately embarked on a “the worse, the better” campaign aimed at delaying or destroying every Democratic initiative.
4. The Democrats did not realize how deeply the economy had been wounded. Even if they had, they probably wouldn’t have been able to get more stimulus money out of Congress, particularly after the “Wall Street bonus” scandal exploded.
5. The Democrats never understood how little the average American voter was interested in universal health care coverage. Americans don’t want to pay for their own health insurance, much less someone else’s. President Obama in particular had a vastly exaggerated confidence in the ability of “rational decision-making” to implement cuts in “unnecessary” medical services.
6. The hierarchy of the Catholic Church, once so active in behalf of programs benefiting the poor, is now almost as hostile to the Democratic Party as the Republican Party, and took its hatchet to the Democrats over the entirely phony issue of federal funding of abortions.
7. The country proved bitterly opposed to the Administration’s laudable efforts, now almost entirely abandoned, to bring the rule of law to the “War on Terror.”
8. Organized labor, which for one brief moment seemed almost as potent as it had been in the glory days of LBJ, has shriveled to almost nothing. The UAW took a brutal pounding during the fight over federal aid for GM and Chrysler. SIEU President Andy Stern, the new king of organized labor, quietly disappeared, resigning from his position probably two steps ahead of an indictment. Today, public employee unions, the labor movement’s one source of strength, are the Republicans’ most favored whipping boys. For decades, public employee unions in states like New York, New Jersey, Illinois, and California have treated state treasuries as their private piggy banks. Those chickens are coming home to roost, and it’s hard to believe that union clout at the state level won’t be significantly reduced.
Which should leave the Republicans sitting pretty, but it hasn’t, because the party today is built to destroy, not to build. The Tea Party believes that it will be a simple matter to cut spending and cut taxes, but, as always, Republicans flinch from the specifics. Romney is promising to restore proposed spending cuts to both defense and Medicare, which would make the deficit larger rather than smaller. In the House, where Republicans have to pass legislation, the split is obvious. Ultimately, as I’ve said before, the Tea Party wants to repudiate America’s debt. Of course, Wall Street can’t accept that. Obama is very weak, but, remarkably, he’s not dead.
Afterwords
Dave Weigel has a nice “what went wrong” take here, with nice links. Felix Salmon explains why Wall Street still owns Obama’s ass here.
