Political Fever

Political Fever

Since recent shock waves of populism, Obama has made some bigger promises.


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.

But why give credit only to Volcker? The people in the streets also had something to do with changing the president’s mind. Not just the recent election results but irregular and often unruly interventions from the right and left made the anger and disappointment visible. The center of gravity is gradually shifting away from the White House inner circle. That opens political space for the folks and much livelier debates. We will see more actions at the grassroots. Some of it may be mindless, but some of it will be asserting coherent ideas for remedying the economic disorders, demanding that politicians open their minds or risk the consequences.

Obama is vulnerable to such pressures and has so far responded hesitantly, but the more meaningful shift in power circles may occur in Congress. Democratic representatives face a queasy choice: follow their leader’s agenda to possible oblivion, or break away and start legislating more aggressively on their own initiative. The Senate is a mess of inflated egos and cannot be counted on to do much of anything.

But House Democrats have a seventy-eight-seat majority and can pass a long list of popular reform measures without asking for White House permission. Bolder initiatives would be driven by fear–the ancient instinct for survival–but they could also poke timely daggers in GOP opponents. Do Republicans want to keep voting for the bankers and against genuine solutions to home foreclosures? Let’s have roll calls and find out. When Republicans were in power, they used this maneuver relentlessly against Democrats, who sometimes folded and let bills pass.

House Democrats should talk about usury and put a reasonable ceiling on consumer interest rates. Prohibit any presidentially blessed commission that intends to tamper with Social Security. Compel banks to write down the principal on failing mortgages to avoid foreclosures. Create public-utility banks with limited profits and well-defined public obligations. Finance public jobs on a massive scale. If healthcare reform collapses, the House should act on the issues one by one: repeal the anti-trust exemption for health insurance companies. Open the door for importing cheaper drugs from Canada. Prohibit insurance companies from blackballing customers who are in poor health.

The problem with this strategy is that Congressional Democrats (and Obama) face an excruciating dilemma. To stand with the popular discontents, they have to bite the hand that feeds them. In 2006 and again in 2008, Dems in Congress raised gobs of campaign money–and a lot of it was from Wall Street. For many incumbent Democrats, money seems a more reliable survival strategy than people. The Supreme Court stands with the money guys, and its recent Citizens United decision tipped the game board even further in their direction.

This is where liberal-labor progressives can make a difference by exerting "tough love" on the Democratic Party. Do not be subtle about the electoral threat to comfortable incumbents. By refusing to fall into line and instead encouraging voters to talk back, activist groups can scare the bejesus out of Democrats (maybe even the president). People should demand, not beg, that Obama endorse the $154 billion jobs bill the House has already passed. Or blister Democratic senators who refuse to take up labor-law reforms needed to help workers organize. There is a long list of potential targets, if progressives are willing to assert themselves.

Usually, of course, Democrats in Washington do not take this sort of pressure seriously, and Obama’s White House has been dismissive of its liberal base, especially organized labor. Politicians can count, and they typically regard threats from left of center as toothless. But activists in Washington might change that if they reach out and develop alliances with the broad ranks of ordinary people across the country, including unorganized independents and renegade Republicans. Turn away from the policy culture of Washington. Instead, learn how to listen to everyday people, their concerns and aspirations–then learn to talk like them. The right does an ugly, fear-driven version of this. The left can speak for a more honest and optimistic vision of what Americans need. Mobilizing the anger is necessary to sustaining democracy.

Many major reform measures enacted during the New Deal were accomplished only because of such disturbances. People were nose-to-nose against the government and business. Reformers did not wait for instructions from above. It was unsanctioned mobilization of people that drove Congress and Franklin Roosevelt to go further than they had intended in passing such landmarks as Social Security and labor rights for working people. In 1933 the American Bankers Association led the fight against federal insurance of bank deposits. "Unsound, unscientific, unjust and dangerous," the ABA thundered. Federal Reserve officials objected to the measure too. Even the Roosevelt administration declined to endorse it. Congress enacted it anyway, knowing how angry people were at losing everything in horrendous waves of bank failures. The bankers were wrong. The people were right.

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