The pundits all talk about it, and apparently it’s deliberate. They aren’t fighting back comprehensively. The national party orgs are sending money to individual campaigns, and their 537s are financing ads with local issue emphasis. But there is no Democratic Party message, probably because the incumbents who are in trouble are mostly blue dogs and DLCers – conservative Democrats who don’t want a message they can’t sell to Republican-heavy districts.
So it came as a surprise to me in an interview with Nancy Pelosi I caught after watching the Giants’ win. She said that one of the best kept secrets is that the private sector jobs created in the first 8 months of 2010 exceed those created during the entire 8 years of Bush rule. That’s a profound statement, which goes to long term liberal narrative that while the modern right wing still emphasizes nationalism in rhetoric it has no problem with sacrificing jobs in the interest of economic internationalism, because while wages are national dividends are international. Keeping jobs in the country is not even in the Republican platform – certainly not prominently anyway. It’s a basic equation. We cannot keep jobs in the country as long as free trade agreements lack standards and force us to compete with near-slave labor. It is frustrating that so many of the very victims of the situation are so caught up in the culture war that they can’t, or won’t, see it. Hence the reddening of West Virginia, once one of the bluest of the union states, who like their governor but don’t want him to be Senator because he shares party membership with the scary Muslim black guy in the White House.
The Democrats are going to lose big on Tuesday. Perhaps not as big as the media had been hyping, but big anyway, because they are too timid and lack vision and “audacity” which they can sell to a public suffering the hangover of Reagan’s deregulation, Clinton’s economic globalization, and Bush’s perennial wars.
Eugene Goodheart recently wrote about what he sees as the grave political misunderstandings of Obama’s left wing critics, and he raises some excellent points. Yes, there are structural limitations as well as political and cultural limitations to what a president can do. The Democrats represent an amalgam of political and cultural interests, while the Republicans are much more homogeneous. It makes consensus and party discipline much more difficult for Democrats than Republicans. Add to this that the US despite the progress remains a inherently conservative country, ultimately fearful of government intervention at any level unless it takes the form of an invasion of another country or building roads which support at least the illusion of individual freedom of movement. Everything else government offers is suspect, no matter how successful counterpart programs may be in other countries.
The basic irony here is that financial crisis makes many Americans more culturally conservative. Keynesianism has saved the economy time and again, used by FDR and Reagan, but it is not credited because there is no long term narrative, probably because such a narrative is culturally difficult to sell. Republicans have been successful in whittling down the economic recovery measures, converting to deficit concern after 8 years of apathy on the issue, and ensuring that any new spending is “paid for” which guarantees that no additional money make its way into the economy. Most Americans forget that the bailout for lenders predated Obama and contained no measures for accountability in how the money would be spent by recipients. And the stimulus package was too little, and too heavy on tax reductions and not enough on labor-intensive multipliers. It was enough to forestall a depression, and generate the largest private sector job growth expansion in a decade, but it did not pull enough people out of unemployment to prevent massive foreclosures and pain.
In The Case for Barack Obama, the Rolling Stone points out that:
… the passions of Obama’s base have been deflated by the compromises he made to secure historic gains like the Recovery Act, health care reform and Wall Street regulation, that gloom cannot obscure the essential point: This president has delivered more sweeping, progressive change in 20 months than the previous two Democratic administrations did in 12 years. “When you look at what will last in history,” historian Doris Kearns Goodwin tells Rolling Stone, “Obama has more notches on the presidential belt.”
So why don’t we know about it? Obama is the king of the soft-sell. I think he will be reelected in 2012, and maybe given the realities left by Bush and the corporate free-for-all, the mid-term losses were inevitable.
And in light of my analysis above, R.S. offers this:
Republican critics have blasted the Recovery Act as a failure because it did not hold unemployment below eight percent, as the president’s economic advisers had promised. And liberal economists accused Obama of failing to fight hard enough to enact a bigger stimulus that would have saved more jobs. But since the original stimulus squeaked through, the president has won a series of stand-alone measures — including three extensions of unemployment benefits, the Cash for Clunkers program, a second round of aid for states and a package of loans and tax cuts for small businesses — that have infused another $170 billion into the economy. The Recovery Act itself, meanwhile, has grown from $787 billion to $814 billion, thanks to provisions that were smartly pegged to metrics like unemployment.
In fact, should Obama secure passage of two new programs he has proposed — $50 billion in infrastructure spending and $200 billion in tax breaks for investments in new equipment — he will have surpassed the $1 trillion stimulus that many liberal economists believed from the beginning was necessary. “As the need became more obvious to people, we were able to take additional steps to accelerate progress,” Obama senior adviser David Axelrod tells Rolling Stone. The president, in effect, has achieved through patience and pragmatism what he was unlikely to have won through open political warfare.
The Republicans know we are at a cross-roads. Their narrative does not specifically address recovery actions except the usual tax breaks which their standard-bearers like Rand Paul argue are the only effective stimulus. But most economists will tell you that tax break stimulus is pretty minimal, and Reagan learned that the hard way in 1981 before pushing a military spending spree in which the deficit grew larger than all previous deficits dating back to George Washington combined, by 1984. It expanded the economy however, and Reagan won in the most lopsided contest in American history, thanks in large part to well-packaged economic liberalism. They know that if recovery takes root and is felt before 2012, the transition towards a European style economy will become inevitable. They are not pledging to put the economy back together in two years. They are pledging to take Obama down.
I’ll have more to say about it later, but this is why in this time I won’t be voting Green or other third party, and I won’t be endorsing principled Republicans in any statewide or national office race. The die is cast, and we’re at a crossroads. You can help make the transition easier on Tuesday. Or you can help thwart it by 2012. Really, those are the choices right now.

16 comments
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November 1, 2010 at 7:36 am
Bruce Ross
All due respect, as the WSJ noted here — http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/ — President Bush took office at the beginning of one recession and left office at the bottom of another crash. That there have been a few decent months in President Obama’s tenure is nice for the folks who landed jobs, but pretending that this a sign of the transformative powers of Democratic economic policies (as opposed to business-cycle timing) is just laughable.
Oh, and globalization isn’t going away. It’s just not. The world is different now.
November 1, 2010 at 7:51 am
Eric Kirk
Points taken Bruce, especially the one about natural business cycles. But Maytag, once the flagship company of American industrialism, hasn’t added a manufacturing job since 1991. Yes, the world is different now, but we may lose a huge chunk of our middle class. The world may be different, but to give up the national right to impose tariffs made us especially vulnerable, and I blame Clinton and the Republican majority of the mid-90s for that.
On the other hand, this recession wasn’t just a business cycle recession. It was much deeper than that simply because we don’t have the industrial base we had. It isn’t so much “Democratic economic policies” I’m embracing, but good old fashioned Keynesianism employed, albeit silently, by Reagan, Nixon, and Eisenhower as well as FDR, Truman, Johnson, and now Obama.
This particular business cycle recession was dramatically aggravated by the factors I mentioned. What Obama pushed was to orient public investment towards the development of a private sector which may or may not mitigate the loss of industrial jobs. During the 1980s it became quite fashionable for wealthy investors to suggest that the unions were demanding too much and that middle class folk should “tighten their belts.” But it’s short sighted because the lower the wages, the less money for consumption, and with the exceptions of 1996 and 1997, the American worker has not received a real dollar wage increase since 1971 – even during “the good times.” Maybe the giveaway trade agreements, MFN status for China, and the WalMartization of the the economy has had short term benefits. But we’re paying for it now.
The Great Depression may have been the consequence of normal business cycles aggravated by particular conditions, but the one we may have averted had very definite signature causes. This economist credits Obama, as well as Bush, for saving the day.
http://seattletimes.nwsource.com/html/soundeconomywithjontalton/2012469224_did_bush_and_obama_prevent_ano.html
As I’m typing this, NPR is reporting that AIG will now start paying the bailout money back. That’s good news.
Now we need to rethink tariffs and the trade agreements.
November 1, 2010 at 7:59 am
Mitch
Eric,
Is there really a process for backing out of the WTO and imposing protective tariffs?
November 1, 2010 at 8:08 am
Eric Kirk
Well, we’ve never had problems ditching treaties when it was in the national interest in the past.
November 1, 2010 at 8:18 am
Erasmus
PolitiFact.com rates Pelosi’s claims about job creation under Obama — as contrasted with Bush — as a “half truth” based upon selective interpretation of cherry-picked data.– As far as raising tariffs, dropping out of the WTO, etc. — my wonderment knows no bounds. Does anyone not remember how the protectionism of the 1930s lengthened the Depression? Does anyone want the poor and the middle-class to pay more for their imported goods? Are people as amnesiac as this? Please — think again.
November 1, 2010 at 8:25 am
Eric Kirk
I can’t speak to Pelosi’s numbers or the methodology, but as for the Depression, one cause of the extension was an FDR relapse of neo-liberalism. Unemployment had gone down and GDP up since 1933, but in 1937 he decided to obsess over the deficit, and unemployment went up and GDP down.
November 1, 2010 at 8:28 am
Eric Kirk
I’m listening to Amy Goodman right now, and she seems to have missed the point. This was not intended to be just another left wing rally on the mall. There was a very specific message.
November 1, 2010 at 9:17 am
Bruce Ross
Eric,
Oh, and incidentally, even the cherry picking on its own terms doesn’t seem to be true — at least if the BLS supplies accurate data on its website: http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=CES0000000001&output_view=net_1mth
November 1, 2010 at 11:42 am
Eric Kirk
Bruce = she was referring to private sector jobs specifically, but again, I don’t have the expertise nor the data to discuss it intelligently. I assume there will be rebuttal.
November 1, 2010 at 12:12 pm
ED Denson
The Democrats simply do not have a clearly stated summary of what they have done that helped us. Nor what they intend to do next. I was disappointed in Obama’s presentation on the Daley Show recently, especially in that he was not able to articulate what’s wrong with the economy.
Fortunately, after giving the matter very little thought, I am. We built too many houses, and while so doing we inflated part of the economy – that part having to do with mortgages and home prices. When the bubble burst some people were locked into the inflated prices – people with mortgages and those holding them – and the Fed was unable to come up with any plan to allow a reasonable deflation back to values closer than reality.
Why don’t banks just redo the mortgages where someone who’s mortgage is “underwater” by kicking the excess into a claim against the future sale of the house, or an agreement to add it into the mortgage as the economy reinflates? Sure be cheaper than foreclosures and a lot less damaging to the economy and the social fabric. Turns out there are some sort of what amount to bookkeeping conventions that prevent any reasonable action. We had a banking crisis for months not because we had a banking crisis, but because we had a system which required us to know what some of the foreclosed property was worth and no one could figure it out so we had to hold everything else up to wait and see. I’m sure it’s a bit more complex than that, but it did amount to the system being in trouble because of its own internal methods rather than because of reality. Bottom line: no one could either repair or agree to sustain the system so things got much worse.
Obama may have prevented it from getting a whole lot worse, or he may not. I can’t tell. Neither can anyone else, I suspect, which is a political problem.
Obama has done some good things. Healthcare reform is one of them. So is extending unemployment several times. And he would have done a lot more good things if the Republicans had not decided that they could just hunker down, get in the way of necessary legislation, and wait for the mid-terms when the still sputtering economy would combine with the public’s notoriously short memory, and make large gains at the ballot box. They have a story: big government is taking your money and things are not getting better. Obama does not have a story, and can hardly list his own achievements. It seems odd to say, but I wish he were a better public speaker.
November 1, 2010 at 4:56 pm
Not A Native
I agree, this is a very important election because it will decide the question of ‘Was the liberal victory of 2008 a one off reaction or was it a fundamental shift toward the left?’.
Its typical that Democrats would lose congressional seats, but how many and where is what we’ll all be watching.
To me, Obama has been a good manager of day to day crises while steadily pursuing initiatives designed to create more equality, both economic and social. Its a somewhat antiAmerican goal. Its not the familiar politics thats concerned with assigning winners and losers. People are simultaneously attracted to and repelled by Obama’s agenda.
In general, Democrats have only reluctantly supported Obama, ready to break with him at the drop of a poll. If the losses are ‘reasonable’, Obama will have a second chance to dictate an agenda. If not, he’ll have no real political base and will become a powerless lame duck.
November 1, 2010 at 5:29 pm
ED Denson
The person who can veto legislation is never a powerless lame duck. In a way he will now be able to use the Republican’s trump card, the power of “NO,” against them. That’s irony. Perhaps this time if the Republicans can actually think up a bill and pass it in the House we’ll get some attempts by them to reach across the party lines and get some support – make some compromises – listen to the idea of others respectfully – in order to prevent Senate Democrats or President Obama from shooting it down.
November 1, 2010 at 5:59 pm
Not A Native
Ed thats purely theoretical, because being the president of NO isn’t a successful strategy to win in 2012. If Obama tries that, he(and the Democrats) will lose both houses and the presidency. Making ‘points’ against the Republicans by playing tit for tat might be feel-good revenge strategy for angry liberals, but it would result in the president being blamed for inaction, not the Republicans.
If Republicans take the house, it remains to be seen how they will use their power. I expect more of the same, proposing Friedmanesque legislation, refusing to modify it, and blaming the Dems. if the economy continues in malaise. If the economy improves, they’ll credit that to their being in control of the house, ‘stopping the damage the Dems. were responsible for’.
November 1, 2010 at 6:28 pm
Mr. Nice
Pssht this is layman’s math.
Mortgages is underwater because people got double-ARMs on their C credit between 2002 and 2008.
In that time, housing prices rose from about 25% to 50% more than they were worth when buyer X got their house. Say 2006. They prolly bought for 50% more on their house than it’s worth. 2004? They prolly crashed that shit out to put elbows on the Cadillac. gg
Two years later, housing prices have impotently-dicked around 10 or -15% or whatever causing a couple of fake buys followed by shit sales… much like it was in 1990-1996. Picks up in 2014? Might see some of the adjustments you are talking about. Otherwise, bzzzt, naw. Anyone who bought a house is fucked for the next 25 years so no shit the market is timid.
I do hope the housing bubble bubbles again. Folks need more jobs pitching loans to other folks who couldn’t afford them.
November 2, 2010 at 7:40 am
Not A Native
FWIW, Denson. Yesterday Mitch McConnell said that the number one priority of Republicans will be to ensure Obama is a one term president. Guess that blows holes in your idea that the Reps. will be looking to “reach across the aisle and make compromises”.
The order of the day appears to be negative campaigning AND negative legislating. I’m not predicting it to happen here, but thats the sort of political condition that leads to civil wars “breaking out” in other countries.
November 13, 2010 at 7:29 pm
Lisa G.
Thank you, Erik, for voicing much of what I’ve been thinking. Obama’s pragmatism is well thought out and efficacious in ways that don’t play into cultural narratives. I pray you are right about 2012; that is the one point I have difficulty accepting. I’m steeling myself for 12 more years of, well, you know . . .