Bernanke Is a Drag on the Economy and on Democrats

If the Democratic Party wants to lose—or, to be more precise, wants to lose badly in 2010 and 2012, it need only maintain its current loyalty to the most powerful interests on Wall Street.

The United States already has a party of Wall Street. It does not need two.

Yet, despite an occasional populist turn (like his current bank bashing), President Obama has, with his absurd nominations and even more absurd policies, given every indication that he intends to position the Democratic Party closer to corporate interests than all but the most reprehensible Republicans.

Forget about Obama's rhetorical flourishes. As a candidate and as president, he has too frequently chosen to side with multinational corporations rather than working Americans.

After securing the 2008 Democratic presidential nomination, Obama told Fortune magazine that business executives did not need to worry about his talk of reforming U.S. free trade policies; despite some nice rhetorical flourishes on the primary campaign trail in hard-hit industrial states, Obama said he had no intention of embracing or implementing a fair trade agenda.

Once he was elected, Obama selected as his chief of staff the Democratic party's most ardent advocate for free trade and the broader corporate program, Rahm Emanuel. Then, the new president peopled his administration with Wall Street insiders like Treasury Secretary Tim Geithner and economic adviser Larry Summers.

When it came time to push for stimulus legislation, Obama accepted a plan that squeezed necessary spending for job creation in order to pay for tax cuts for wealthier Americans. Now, instead of the promised unemployment rate of 8 percent or below, we're in double digits.

When it came time to fund an automobile-industry bailout, Obama implemented a plan that shifted tens of billions of dollars from the U.S. Treasury into the accounts of firms which then announced they would close more than two dozen U.S. auto plants and use the federal money to fund the opening of new factories in China and Mexico. At the same time, those companies forced thousands of auto dealerships to shut their doors and lay off more than 100,000 workers.

In the fight over financial-services regulation, Obama and his aides have repeatedly rejected serious moves to hold banks and brokers to account—creating a circumstance where Democrats in the House and Senate must battle not just Wall Street and the Republican Party but the White House if they hope to achieve meaningful reforms. Even now, as Obama tries to surf some of the anger at big banks, polling tells us Americans are skeptical—and rightly so, as the president's party continues to collect campaign contributions from, you guessed it, the big banks.

If John McCain had racked up Obama's record, he would be condemned by even the most moderate Democrats as a tool of the corporate elites.

Because Obama is a Democrat, many in his own party continue to cut him slack.

In doing so, they are giving the party of Franklin Roosevelt and Harry Truman just enough rope to hang itself in 2010.

Unless there is a radical shift in direction, Democrats will find themselves running in this fall's congressional and state elections as the party of an economic status quo most Americans believe is corrupt in its character and damaging in its practices.

How can the Democrats save themselves?

By saying no to Obama and to Wall Street when it comes to the direction of the Federal Reserve. Hopefully, that "no" will be heard by the president and his aides in time for the White House to set a sounder course.

But regardless of how Obama responds, congressional Democrats can and should raise the necessary objection—and act upon it when Bernanke's confirmation vote is taken later this week.