No Wonder So Many Are Disillusioned by Our Politics -- We've Got an 18th Century Political System
The following is an excerpt from the Introduction to 10 Steps to Repair American Democracy: A More Perfect Union, 2012 Election Edition by Steven Hill.
In 2008, an economic earthquake of historic proportions shook the world. That was followed by numerous aftershocks whose effects are still being felt years later. In the middle of the economic crash, a new audacity of hope arrived in the form of the first African American president elected in U.S. history. It was a jubilant moment showing America at its best, taking a giant step toward the dream of a multiracial society.
The very campaign of Barack Obama, which drew in unprecedented numbers of young people, seemed to auger a new era in politics that held out the potential for a badly needed transformation. Time magazine featured the face of President-elect Obama on its cover, photoshopped into a likeness of President Franklin Roosevelt complete with tipped cigarette holder and grey fedora. It seemed that a new New Deal was on the horizon for an America suffering from the ravages of a historic economic collapse.
Yet, within a short time, the Obama administration found itself flat-footed on nearly all policy fronts. Confronted by intractable challenges and difficult choices presented by the economic crisis, and hindered by a polarized Congress more interested in political brinksmanship and deploying cheap, anti-majoritarian strategies like the filibuster, the Obama administration responded with timid proposals that failed to realize its promise. It turned out that America’s antiquated political system was so creaky and sclerotic that it was impervious to even the most talented of its politicians.
President Obama’s leadership failure came at a crucial moment. Without a politics that could rein in the economics, Wall Street honchos at Goldman Sachs, Lehman Brother and others had turned our banks and financial system into their personal casinos to be bailed out by taxpayers when their bets tanked. The economic crash had been caused by a hyper-deregulated U.S. financial system that, without sufficient political and administrative oversight, had spun out of control. Wall Street’s brand of capitalism resulted in a socializing of the losses and privatizing of the gains. And so it fell to the American political system, which had failed to rein in the runaway train to begin with, to re-regulate the economy and try to make the country safe again for capitalism.
Yet following President Obama's inauguration in January 2009, not only did he continue many of the Bush administration’s policies but the people he chose as his cabinet members and regulators were industry insiders who were not going to change things fundamentally. Wall Street executives, at first cowed by their own incompetence and the sudden systemic instability that forced them to accept government handouts, rediscovered their bravado and began digging in against fundamental reform. The Obama administration and other key authorities, such as the New York Federal Reserve, stood back while Wall Street and the corrupted ratings agencies resurrected much of the ultra-complex trading system that had led to such a spectacular global collapse. New regulations eventually were passed, especially the Dodd-Frank legislation, but many financial experts felt that certain key defects were never adequately addressed. After the dust had settled, many of the “too big to fail” banks and financial institutions that remained were even bigger than before the crisis, having swallowed those that went belly up. Wall Street was back to its high-flying ways, and a smoldering anger rumbled across the nation as it became clear that Main Street had been swindled by Wall Street, and government had done little to protect everyday people.