The Obama White House is dabbling in small ideas when what the country needs is a big reset of this presidency. My suggestion: dump the measured moderation. It’s not working as economic strategy or as politics. Take a deep breath and admit the Democratic Party failed to grasp the enormity of the economic upheaval facing the country—people will be grateful for some honest talk. Start over with a more aggressive and realistic economic agenda that measures success in the tangible results people can see, not rosy forecasts of macroeconomic models.
Instead of holding back, start using the government’s vast, untapped powers in more ambitious ways that directly generate real changes in the economy, starting with jobs, jobs, jobs. Stop saying "recovery" is here or right around the corner—people know better. Start explaining with painful clarity the hard facts of our situation, including that no one really knows how long it may last, how deep this ditch will become.
Make only one promise. The government will keep trying—whatever it takes—to help Americans through this until they can begin building better lives, a better country.
The problem with this suggestion is everyone knows it’s not going to happen. Adopting an aggressive, high-risk mobilization of governing powers would be out of character for the no-drama president. His policy team of super-brainy technocrats would reject it as irresponsible. They are fidgeting with smaller adjustments because they claim politics won’t allow them to do more. The claim is defeatist, bordering on self-pity. Republicans will gain seats this fall exploiting the public confusion and misery. Paralysis will rule.
So why even talk about big ideas for greater government interventions? Because the country has no other alternative. When the private sector is not delivering what the society needs, government inevitably tries to fill the void, motivated by necessity more than ideological conviction. Banking and industry are now hunkered down defending their balance sheets, not investing, not hiring. Most consumers are tapped out, nursing wounds and not spending.
If the federal government declines to step up, that is a decision to do nothing. Let nature take its course, let the country stew in its pain and loss and social deterioration. Tea Party libertarians might be satisfied with that, but even the cynical GOP cannot embrace passivity and expect to survive in power.
The driving imperative of this new era is the expansion of governing powers, not a smaller government imagined by pious conservatives. That sounds contrary to current political passions. But the great unraveling has created an ineluctable drift leftward—toward measures that give government greater presence and power in the private economy.
A reinvigorated public square not only must strengthen the muscle of government regulation, as Congress has attempted. Government should also accept the need to produce some of the shared public goods people need in their lives—the common assets the private sector will not provide and often seeks to destroy.
Both political parties in different ways resist this insight, anxiously denying the new relevance of left-liberal propositions. But it is not so easy for them to evade the leftward push of bleak events or the rage of disappointed citizens.
Obama and the Democratic Congress tried to split the difference and have it both ways. They reached for some big ideas but resisted the left-liberal logic of using government power forcefully and effectively. Instead, they were careful not to intrude too seriously on private economic power and the privileges of the old order.
Their moderation failed. Certainly, it did not convince business and financial interests. They take seriously the threat of the leftward impulse and are mobilized to block it at every turn. Their fellow travelers in the Republican party went a little nuts—demonizing Obama as a power-mad ‘socialist’ and reviving crackpot ideology from the 1920s.
Political impasse is not a permanent condition, however. Events will intensify the ideological tension because the sodden economic conditions will continue to sow social upheaval and bitter rebellions. The left-liberal ideas that could truly change things are not a mystery. If private employers can’t or won’t create jobs, government can do so—public employment for the vast army of unemployed. If the "free trade" regime continues to bleed US jobs and production, there are many ways government can stop it. If people lack the resources to hold onto their homes or if banks won’t lend at reasonable rates, government can intervene to change that.
Political leaders may try to maintain their straddle between the people’s interests and the big-money interests, but the people can also push back—much harder than they have. This fall, many will employ the only crude tool at their disposal. Throw the bums out. When a political party fails to deliver, it is punished. Democrats failed to deliver and so their ranks will be purged this fall. That can be unfair (some worthy representatives get taken down in the process), but it is also a good thing in the long run. It is the surest way people can force change upon a political system compromised and corrupted by the knowledge that even bums can hold onto office if only they spend enough money.
The Democratic party deserves to be punished. It came to power with a strong governing majority and, instead of using it, bargained meekly with the other side on how to avoid enacting stronger measures. Yes, it is entirely possible Obama and Congressional Democrats will take the wrong message from the election results and turn rightward—trying to copy Bill Clinton’s rope-a-dope strategy for avoiding the tough decisions.
If so, throw the bums out. This is the "new politics" of our era. Don’t be surprised if it continues for a number of election cycles until one party or the another figures it out. Or until both parties are totally discredited and something arises to take their place.