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Where Do We Go from Here?

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Pete Souza/White House
Barack Obama at the White House, November 2010

And there are steps that the White House could take without congressional approval. Democrats could pressure the administration to fix the inexcusable mess at the HAMP (mortgage modification) program—a program whose Kafkaesque complexity has in many cases made matters so bad for home owners that it has triggered the foreclosures it was supposed to avoid. In addition, mortgage relief would benefit the wider economy. Furthermore, the scope of mortgage relief could be made much wider if Fannie Mae and Freddie Mac were used to guarantee mortgage refinancing. Other proposals go even further: for example, that Fannie and Freddie engineer reductions in mortgage principals. All of this could be done, conceivably, by executive order.

Democrats could also demand that the administration—specifically, the Treasury—act on the problem of China’s currency manipulation, which keeps the remnimbi artificially cheap compared to the dollar. While China’s actions are not the main factor in our economic woes, they are a factor. China’s unprecedented level of currency manipulation siphons off demand for US products that is much needed in our depressed economy, and shifts our imports away from other countries such as Mexico that are much more likely to reciprocate with purchases of American goods. The obvious American response is to threaten, and if necessary actually impose, countervailing duties on Chinese exports—a step that is backed even by strong advocates of free trade, such as Fred Bergsten of the Peterson Institute for International Economics. Such a move would have overwhelming Democratic support in Congress, and would put Republicans on the spot if they tried to block it.

While seeking to limit damage on the economy, Democrats can also force the Republican agenda into the open. On issue after issue, the public favors what is in fact the Democratic position over what is in fact the Republican position—but Democrats gain little from this preference, because voters don’t know what either party actually stands for. Merely to cite Republican opposition votes as an obstacle to change is to ignore what might be done to inform and mobilize the public.

Obama’s failed efforts at bipartisanship are partly to blame. Consider the remarkable message of a poll on Social Security taken just before and on the night of the midterm elections.1 This poll found overwhelming support for what amounts to the Democratic position on Social Security: maintain benefits, don’t raise the retirement age, but do raise taxes on higher earners if necessary. Yet the same poll found Republicans more trusted than Democrats to do the right thing. How is this possible? Surely Obama’s support for a supposedly bipartisan deficit commission—even after the commission’s cochairmen came out for cutting benefits and raising the retirement age—must have had an effect on the outcome. Voters apparently suspect that Democrats will sell them out on Social Security; and it’s up to Democrats to get out the message that they’re wrong.

There are other issues on which Democrats can try to draw the line. They inexplicably failed to make a midterm election issue of Republican demands that upper-income tax cuts be extended even in the face of large budget deficits; and Obama has now settled for a two-year extension of all the cuts, in return for some additional stimulus. It’s a questionable deal, but in any case the tax-cut issue will return—and the real lesson of the debacle so far is that Democrats need to make the case for not perpetuating tax cuts for the wealthy early and often. In fact, this is one issue where Democrats have to regain some credibility, if they want to reenergize a defeated and demoralized base.

And this brings us to our last point. Democrats need to make it clear that if Obama isn’t going to be the leader of the Democratic agenda—and all indications are that he can’t or won’t—they will advance that agenda anyway, with or without his help. They have to be ready to delink their political fate from Obama, and make it clear that they won’t tolerate further undermining of their goals by deluded calls for bipartisanship. Progressive groups—MoveOn, for example—helped put Obama in office by mobilizing their members and followers through a variety of organizational strategies, including use of the Internet. They did so only to be ignored and dismissed once the 2008 election was won, and now they need to be revived.

How far should delinking from Obama go? There is no obvious contender to mount a primary challenge, which is in itself a testimony to Democratic weakness. But the possibility is clearly there, and both will and should become a reality if Obama follows a path of capitulation.

In 2008, progressives fell for the fantasy of hope and change on the cheap; they believed Obama’s promise that the reforms America needed could float through on a tide of bipartisan reconciliation. It was not to be, and clinging to that illusion will only lead to more defeats. If progressives want to rebound, they’ll have to fight.

—December 16, 2010

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    Conducted by Lake Research Partners, October 31–November 2, 2010, and available at StrengthenSocialSecurity.org. 

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