The change we didn’t get

TWO YEARS ago, tens of thousands of people gathered in a Denver stadium to hear candidate Barack Obama promise dramatic change as the country was slipping into a financial panic:

We meet at one of those defining moments, a moment when our nation is at war, our economy is in turmoil, and the American promise has been threatened once more. Tonight, more Americans are out of work and more are working harder for less. More of you have lost your homes, and even more are watching your home values plummet. More of you have cars you can't afford to drive, credit cards, bills you can't afford to pay, and tuition that's beyond your reach.

That was true then. It's even more true now.

These days, of course, the political momentum has shifted to the right, with the Republicans expected to score big gains, if not take control of both houses of Congress.

To use the vaguely obscene but appropriate cliché: WTF?

The pundits have a ready answer, and they're already rehearsing their Election Night pronouncements: Obama strayed too far to the left, alienating voters in what is instinctively a "center-right nation." Just as voters delivered a rebuff to George W. Bush in 2006 by delivering Congress to the Democrats, the electorate will reign in Obama for pursuing his progressive, even quasi-socialist, agenda.

There are plenty of signs that Obama and his advisers agree with that assessment. For example, word is that Obama's top economics adviser Larry Summers, the outgoing chair of the National Economic Council, will be replaced by someone more business-friendly, like former Xerox CEO Anne Mulcahy. As if Summers, an architect of financial deregulation who made millions working part-time for a hedge fund, is a dangerous left-wing radical.

No, the real reason that Obama's bubble has burst is his failure to use his widespread popularity to extract concessions from capital, and use them to consolidate his political base. The Democrats are about to take a pasting not because they were too bold, but because they tailored their policies to Wall Street and Corporate America, at the expense of working people on almost every issue.

At one level, that's no surprise. The Democrats are, as the ex-Republican adviser Kevin Phillips once noted, history's second-most enthusiastic capitalist party.

But you might have assumed that the Democrats' ardor for the rich must at least coexist with a desire to hold on to the power that fell into their hands. By taking office amid the greatest economic crisis since the Great Depression, Obama and congressional Democrats had an opportunity to bury the Republicans by pushing through legislation that would have solidified the support of working-class and poor voters for a generation.

IT COULD have happened. But it didn't.

Obama and the Democrats did pass a $787 billion stimulus package. Yet while it was the biggest in U.S. history, it was also underpowered--both in the total amount spent and its significant reliance on tax cuts rather than direct spending.

And while the Bush administration created the $700 billion Troubled Asset Relief Program (TARP) to bail out the banks, the Obama administration used the money not just to keep propping up financial institutions, but also to nationalize General Motors. Rather than save auto jobs, the Obama administration oversaw a bankruptcy that led to tens of thousands of layoffs.

Next came the blizzard of money from the Federal Reserve in the form of near-zero interest rates and a range of loan programs--but it all fell into the pockets of the big banks. Homeowners facing foreclosure had to worry and wait for federal programs that have only helped a tiny minority of those in need.

It's that double standard that rankles--or infuriates--those who looked to Obama with, well, hope. Meanwhile, Corporate America isn't investing, even though business is sitting on a cash hoard of $1.8 trillion--thanks in large part to the financial bailouts and those low interest rates.

But none of that fazes Washington's self-appointed wise men and women. In their view, Obama veered too far with the left with health care reform, and that's what's animating the right-wing backlash around Tea Party.

Wrong again. A new AP poll found that 40 percent of people felt that the health care legislation signed into law by Obama, which consolidated the role of the private insurance industry, didn't go far enough--compared to just 20 percent who thought it went too far.

Incredibly, the health care law--which could have been a hallmark Democratic achievement like Social Security and Medicare--has instead become a millstone around the Democrats' necks.

At the same, the billions in federal funds flowed into the banks, and the states got aid that was far too small to avert the budget cuts and layoffs that are sweeping the country. That has only compounded the social misery generated by years of mass unemployment, which the current weak recovery hasn't alleviated, and won't for years to come.

Then there are Obama's wars. The president delivered on his promise to remove all U.S. combat troops from Iraq--if you believe that those heavily armed 50,000 soldiers were left behind for the foreseeable future to act as school crossing guards.

In Afghanistan, Obama dispatched a total of 50,000 more troops, bringing the total number of U.S. soldiers there to more than 100,000--fighting a losing war to prop up a government of crooks, drug runners and warlords, while innocent Afghans suffer the terror of the U.S. military machine. A Rasmussen poll published in early September found that "just 18 percent of voters say the situation in Afghanistan will improve over the next six months, the lowest level of confidence since last October."

BAIL OUT the bankers, give a blank check to the generals, shaft the workers and abandon the poor--whose numbers, by the way, are at record levels. It all adds up to a recipe for electoral defeat for the Democrats.

None of that was inevitable. Franklin Roosevelt, to whom Obama was compared by many when he took office in 2009, managed to turn a far worse economic crisis into a political opportunity, locking in Democratic dominance of Congress for most of the next six decades.

But Roosevelt faced something Obama didn't: an insurgent working class that mobilized mass protests, general strikes in key cities and union organizing drives at the heart of U.S. industry. Elected on a fairly conservative program, Roosevelt was nevertheless forced by both pressure from below and the intractable economic crisis to take bold and risky actions--and put people to work.

The Corporate America of the 1930s screamed "socialism" at Roosevelt, too. He even said he "welcomed" the bosses' hatred.

But Roosevelt was shoring up U.S. capitalism, not threatening it. "I am the best friend the profit system ever had," he said. He recognized that the creation of government programs to give people jobs, such as the Works Progress Administration, might be expensive, but would provide political benefits, too.

Today's Democrats, however, enthralled by decades of neoliberal, pro-market economic dogma, don't seem able or willing to use their political power to discipline corporate bosses, even when the long-term interests of U.S. capitalism are on the line--the incredibly expensive yet spectacularly ineffective health care reform legislation is the best example.

Long gone are the days when a Democratic senator who lost an election would take a quiet do-nothing job as a university president. Take, for example, Tom Daschle, the former majority leader of the U.S. Senate, who today has a far more lucrative job as a rainmaker for one of the most high-powered law firms in Washington. Other members of Congress would like similar career options. So perhaps it's not surprising that nominally pro-worker liberals lined up to support the slap-on-the-wrist law that was billed as financial regulatory reform.

Without the kind of mass movements that forced Roosevelt's hand, Obama felt pressure only from above. So the bankers, despite being effectively nationalized, still got to block any serious threat to their wealth. And the rich, worried that the Bush tax cut bonanza might soon be repealed, were able to bankroll the Tea Party protests that tapped into popular anger over the economy and diverted it into a racist and anti-immigrant backlash.

Liberal organizations and organized labor bear some responsibility for this state of affairs. Having failed to mobilize against the giveaway to the banks or to demand jobs, they left an opening for the billionaires to manufacture a "movement" to denounce the status quo.

The One Nation march set for October 2 is a last-ditch response. But while it will voice important demands, such as increased social spending and jobs creation program, it's certain to be dominated by Democrats who promise to stand up for working people, even as their policies go precisely in the opposite direction.

The failures of the Obama administration are, in the end, a reminder of what U.S. history has always shown: that without large, fighting mass movements, the Democrats, like the Republicans, will always defend the status quo.