I owe the title of this blog to William Greider who, in talking about the present upsurge in populism in the US, said: “At the center of this story is Obama, who inherited the Democratic Party’s awkward straddle between monied interests and working people.”
We’ve been living with this awkward straddle for a very long time. I think it actually begins with Jack Kennedy’s cutting of high marginal income tax rates on the very wealthy, downward from their previous high of 90%. During Lyndon Johnson’s time there were further cuts in marginal tax rates and also more fund raising from the very wealthy for Democrats, out of excessive fear of the hapless candidacy of Barry Goldwater. By the time of Jimmy Carter, the straddling was pretty clear. President Carter made serious efforts to contain inflation and balance the Federal Budget. He failed, but he certainly seemed to be more concerned with inflation than unemployment, and his Federal Reserve appointees (e.g. Paul Volcker) were determined to wring inflation out the economy at whatever cost to working people. They succeeded eventually, but, in the process, cost Jimmy Carter a second term, and brought into office, a man who wasted a generation of American progress toward the just society. (Yes, I know most people think it was the combination of inflation, Carter’s political incompetence, and foreign policy errors with Iran that brought him down. But I think the more important cause was that he made it plain that working people could not trust Democratic Presidents to see to their interests, and that realization made it that much easier for them to become Reagan Democrats, voting their social values, which they expected Reagan to support, rather than their economic interests, which they really didn’t think Carter would deliver on, anyway.)
In any event, by the time the Clinton Administration rolled around, new Democratic orientations were certainly about “straddling” business and popular interests, and doing nothing to tilt too much in the direction of “the common man,” lest they be accused of engaging in ‘class warfare.” Generally, that has been the orientation of the Democratic Party, until the resurgence of the Progressive Movement in the last few years, when many Democrats, once again, have awakened to their historical mission in American Politics, namely representing the interests of the “have-nots,” rather than the “haves.”
President Obama doesn’t want to accept this historical role of the Democratic Party. Instead, he works to represent the interests of all Americans, seeming to think this means, that, to the extent possible, he will work to represent all major interests, and, hopefully, to conciliate them with each other in the long run. This vision, however noble it may seem, will not work. There are many reasons for this. But a very big one is that the treatment of various interests has been unequal and tilted in the direction of the “haves” for at least 40 years now; and as a result, levels of inequality in the United States are back to their pre-depression levels, not seen in this country for 80 years.
Given this level of inequality, it is not in the interests of American Democracy for Government Policy to favor every economic and social grouping equally. For awhile, we need to view Main Street as more important than Wall Street, and Community and Small Banks as more important than Big Banks and Investment Houses. But President Obama is not doing that. Instead, he is pursuing a policy of bailing out Wall Street at all costs, of protecting global financial interests at the expense of the American taxpayer. Americans are coming to understand this. And when they do, the anger will be great and it will be justified; for certainly such policies were not what he was elected to fulfill.
It is not too late. End the straddling. Get rid of Geithner. Return the Democratic Party to its historic mission of being the party of the people. Take the zombie banks into receivership, and then spin them off with clean balance sheets. Take AIG into default, kill it, and create regulations so that a monstrosity like this can never rise again. Let the UK, France, Switzerland, and Germany decide whether or not they will take their own banks into receivership. And finally, take the taxpayer money not used on a probably futile effort to avoid recognizing the true value of the toxic assets, and pass a stimulus bill that will really work to bring our economy to its full productive capacity so that we can begin again to build economic value, and, more importantly, engage the creative capacities of all of the American people in building a just and productive society in which all can attain their own version of the American Dream.