When citizens shake off their resignation and rebel against the political elites, Washington reacts as if a dread new disease has risen from the swamp of public opinion. Spin doctors are on the case, prescribing various "cures" to inoculate the governing order against this virulent strain of flu. The White House senior adviser says he needs better "data" to warn Democrats against any more upsets like the Massachusetts senatorial election. The president revives popular ire as a speech theme, trying to go two ways at once. For the right, he promises a freeze on spending. For the left, he talks up jobs and his anger at Wall Street. Bankers are out. The people are in.
The Washington Post calls it a "populist brushfire," and pundits explain why our sudden rowdiness is irrational, possibly dangerous if not swiftly contained. What a rare moment to behold–we’ve got their attention! Events that the major media see as illness are actually the first small signs of revival in our moribund democracy. The rebellions are like early tremors in what could be a deep shift in the tectonic plates of power. If so, the first waves are going to be followed by more waves–lots of them emanating from unexpected quarters–new voices and new ideas intruding on the exclusive parlor talk that passes for political dialogue.
The wonderful thing about democracy is that once ordinary people discover they can have some influence, they almost always want more of it. We are entering a fitful era of unstable politics that could last for years. First the Republicans got hammered. Now it is the Democrats’ turn. Neither party seems to understand the depths of the painful changes we are facing as a society. Neither can govern confidently, because both are unwilling to describe honestly the nation’s predicament. A new order may eventually emerge, but not until the old order has lost power and is swept away.
Barack Obama, through no particular fault of his own, inherits this historic mess and must try to manage it. He has no choice but to operate within the governing system that exists, yet he must try to identify with the spreading popular discontents and deliver some concrete relief. This is a fiendish dilemma, and the president has not yet mastered it. What he has so far learned is that in these adverse circumstances, be careful what you promise.
Since the recent shock waves, Obama has made some heartening adjustments that go beyond his old plans. These are modest gestures, but big change nearly always starts with small gestures. He proposes a new tax on the largest banks and new goals for reforming the financial system: shrink the size and reach of the banking behemoths, restore the separation between traditional commercial banks and the highflying megabanks that dragged the country into catastrophe. Obama doesn’t say how, but these structural changes are far more ambitious than earlier proposals. In his State of the Union address, Obama offers a few ameliorative measures such as assistance to struggling families, but his rather phony budget freeze is meant to shed his big-spender reputation. If so, he is not going to do anything serious about the enormity of joblessness and bankruptcies people are facing.
The ground, in other words, is already shifting rapidly. We can reasonably expect greater movement ahead. News stories from the White House emphasized the influence of former Federal Reserve chair Paul Volcker, who has expressed his distress over the financial debacle and the inadequate, even wrongheaded reforms proposed by Obama. Since Volcker was politely brushed aside as the president’s economic adviser, this policy shift rattles a lot of cages in the administration, starting with those of Treasury Secretary Tim Geithner and White House economic guru Larry Summers. Since their work has been repudiated, it is hard to imagine how they can be trusted to design an honest implementation of what Volcker proposes.