What Created the Populist Explosion and How Democrats Can Avoid the Shrapnel in November
Continued from previous page
- A strong economic downturn devolves into a Great Recession, as the stock market crashes and major banks fail. By October 2008, upper middle class moderate Republicans in the suburbs are so frightened by what's happening to their assets that they're willing to give Democrats a chance.
- A Republican administration that believes in neither government nor regulation creates a 700 billion bank bailout with no accountability. Unlike Republicans, who would say "no" in a situation like this and let a Great Recession turn into a Great Depression, Democrats do the right thing, but they don't make it clear from the start that these are Bush Bailouts and remind Americans, over and over, that the cause of all the bankruptcies is the bankruptcy of Republican ideology.
- A charismatic young president raises people's hopes and expectations, as he uniquely can. Americans are frightened, but they are willing and waiting to hear an alternative narrative to "government is the problem, not the solution" and a path back to economic recovery and security.
- The White House refuses to tell the American people three stories they desperately need to hear.
- The first is why the economy has gone into the ditch, and who did it. The president is steadfast in his position that we should "look forward, not backward," even as the GOP is blocking his every initiative to clean up its mess. As conservative attacks on him and Democrats increase, he refuses to indict the Republicans in Congress or President Bush for having destroyed our economy and putting one in eight Americans out of work and one in five either behind on their mortgage or in the process of having their homes foreclosed by the same bankers who gambled them away. Why did he need to tell the American people who was responsible for their misery -- and to repeat it again and again? Because otherwise, if the worst economic crisis since the Great Depression didn't subside within a year and half, voters would start to associate it with him and his party. This is Neuroscience 101 -- it's how mental associations are formed. But the president never even uttered George W. Bush's name in his first year in office, and the first time he did mention Bush was to appoint him, along with former President Clinton, to co-lead American relief efforts in Haiti. The president doesn't like putting antagonists in any of his stories, but if forced to, he would cite unnamed "naysayers," "Washington politics as usual," or "Congress," which was counterproductive given that Congress was held by his party. The guiding belief at the White House implicit in this messaging strategy was that Americans have a good grasp on economics and good memories.
- The second story the American people needed to hear from the president was why deficit spending is essential when the economy is spiraling downward. It's not a hard story to tell, even in a sound bite. But one of the best educators to occupy the Oval Office in decades chose not to educate -- he actually did it once, with prodding, but never repeated what was a superb explanation --- nor did he remind voters every time his opponents attacked him for deficit spending that they had left him with a 1.2 trillion dollar deficit on the day he walked into office because of their unpaid-for tax cuts to millionaires and unpaid-for war on Iraq that called on no one to sacrifice except our soldiers and their families (and our kids and grandkids, who will be paying off this war for generations). A year later, with Democrats on the ropes, the president started to tell that story. It was the right move, but appeared defensive because it hadn't been part of his guiding narrative from the start.
- The third story the president needed to offer was an alternative narrative on government. The president and his party were about to offer effective government as a solution to multiple problems after 30 years of solid branding by conservatives since Ronald Reagan about how government is the problem. But the narrative never came.
- The White House and Democratic Congress pass what virtually all economists outside the Goldman Sachs-to-Washington pipeline consider a half-stimulus that they predict will likely produce half-results. It fulfilled its promise. But the equally predictable political result was a discrediting of the concept of government intervention to stimulate the economy in the eyes of the public -- enough to scare off Democratic lawmakers from doing what they learned about Keynesian economics in intro economics for the indefinite future. Instead of blasting the Republicans for having hurled the country toward an abyss that would now take drastic measures to avert and warning the American people that this could easily be the first of two or three trillion-dollar packages that might be needed to get Americans back to work and to get the gears of the economy grinding again before we could start returning to the kinds of surpluses Bill Clinton had left the last time a Democrat was in the White House, the president chose to compromise with a party that was so unpopular when he took office that only 20 percent of voters at that point would even admit to a pollster that they considered themselves Republicans -- the lowest point for the GOP since the rise of public opinion polling 50 years earlier.
- The economy continues its free-fall, shedding 700,000 jobs a month. Meanwhile, Democrats don't take the kind of dramatic steps necessary to stop the bleeding. Americans are becoming desperate, but they remain hopeful that this new president will turn things around, and that perhaps the jobs provisions of the new "stimulus" act will do cauterize the wound. Meanwhile, the stimulus is being portrayed by Republicans as a mixture of pork and fat, and no one is effectively answering the charges, creating increasingly negative associations to an act that was never adequately crafted or sold.
- The logical follow-up to a bill designed to pull the economy out of a ditch is to make such a bill unnecessary in the future, by attacking Wall Street for having thrown us into crisis and passing strong legislation to rein in the excesses that created the economic meltdown. This would have sealed the American people's loyalty to the new president and Congress. (Heading into November, this is, in fact, the most popular piece of legislation the Democrats have passed, but it took them nearly a year and a half to get there, and by then, neither the president nor the Democratic Congress enjoyed the good will of the average American.) Instead, the same banks that received bailouts are foreclosing in record rates on the homeowners whose payroll taxes funded the bailouts but don't seem to get the same kind of attention to their needs from the federal government. Adding insult to injury, the banks double and triple credit card interest rates to as high as 30 percent, including on people's existing credit card debt -- while continuing to receive no-interest loans from the federal government.
- Despite talk of accountability, no one is fired (except one auto executive), virtually no one is prosecuted or even investigated as far as anyone knows, and banks that received bailouts flaunt record bonuses.
Act II: An Anemic Economy Meets an Anemic Health Care Plan