Economic recovery, the kind of relationship leading Democrats have with Wall Street and other special interests, and whether the health insurance legislation that is passed is defensible will do a lot towards determining who turns out this November, and who persuadable voters support. At this point, trying to downplay the enthusiasm gap, or thinking that it's going to improve without concrete achievements on major issues (the issues the Democratic trifecta was elected to deal with), is borderline delusional.
Here is some weekend reading that drives these points home.
President Obama's own instincts on how do deal with the economy seem to be somewhat better than those of his most senior advisers.
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Obama is under immense political pressure from the center and the right, and from some of his own top aides such as OMB Director Peter Orszag, to put deficit reduction ahead of job creation.
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We will soon find out, in the State of the Union Address, whether Obama will deliver on his promises to do something more about jobs, or whether his more conservative economic advisers will prevail.
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The path that Obama is on, unless he alters it fast, will lead to prolonged economic stagnation and Republican champagne next November. If you think a lunatic-fringe Republican party is any protection, look at the blowout victory of Pat Robertson protégé Bob McConnell in the Virginia governor's race two months ago. And this in a blue-trending state.
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A financial industry that is alive thanks only to taxpayer bailouts continues to use its political influence to block reform and the president takes it while his Treasury Department keeps spooning out the help.
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What will it take for Obama to recover his footing? Some key personnel changes might be a start. As investigative reporters did deeper into the mess that Larry Summers made of Harvard's finances, you have to be thankful that the man isn't running the nation's economy (oh, whoops, he is.)
Summers reinforces all of Obama's conservative instincts and none of his progressive ones.
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Let's not give up on the promise of Barack Obama. There is just too much at stake, and there is a part of him that has decent progressive instincts. But he is being led to ruin both by the insularity of a circle of advisers too wired to Wall Street, and by his own habitual temporizing.
[T]he odds are that any good economic news you hear in the near future will be a blip, not an indication that we're on our way to sustained recovery. But will policy makers misinterpret the news and repeat the mistakes of 1937? Actually, they already are.
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Congress should have enacted a second round of stimulus months ago, when it became clear that the slump was going to be deeper and longer than originally expected. But nothing was done - and the illusory good numbers we're about to see will probably head off any further possibility of action.
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Will the Fed realize, before it's too late, that the job of fighting the slump isn't finished? Will Congress do the same? If they don't, 2010 will be a year that began in false economic hope and ended in grief.
Issue Number One -- the overriding concern that will determine more than anything how many seats the Democrats lose next fall -- is jobs. If unemployment is 10 percent or more next November, the Dems are in danger of losing the House and will almost certainly be short of the 60 votes they need in the Senate.
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I think the chances of unemployment being 10 percent next November are overwhelmingly high. But although voters are acutely sensitive to the rate of unemployment, they're also influenced by the direction employment is heading. If it looks like jobs are coming back, they may forgive a high absolute level of unemployment -- even one as high as 10 percent. But if it looks like jobs aren't coming back, that we may be stuck with a high level of joblessness for years, voters will take out even more of their anxieties on Democrats next November.
The irony, of course, is that Republicans want to cut spending and reduce the deficit. If they had their way, we'd have double-digit unemployment as far as the eye can see.
The states are in the worst fiscal shape since the Depression. The Great Recession has caused state tax revenues to fall off a cliff. Some states - New York and California come quickly to mind - are facing prolonged budget nightmares. Across the country, critical state services are being chopped like firewood. More cuts are coming. Taxes and fees are being raised. Yet the budgets in dozens and dozens of states remain drastically out of balance.
This is an arrow aimed straight at the heart of a robust national recovery.
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This is not a disaster waiting to happen. It's under way.
Without substantial new federal help, state cuts that are now merely drastic will become draconian, and hundreds of thousands of additional jobs will be lost. The suffering is already widespread.
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The Obama administration has provided significant help to states through its stimulus program, and it has made a difference. It prevented the crisis from being much worse. But much of that assistance will run out by the end of the year and states are fashioning budgets right now that will absolutely hammer the quality of life for some of their most vulnerable residents.
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We can hardly afford any additional economic shocks. Turning our backs on the desperate trouble the states are in right now is nothing less than an utterly willful invitation to disaster.
The simple truth is that in midterm elections, no party can win without its base because turnout is lower than in presidential elections. Those who do vote are more committed to their parties and their ideological priorities.
Behind the 1994 Republican midterm sweep was a dispirited Democratic base unhappy about the failure of heath-care reform, grumpy about the economy and badly split over the North American Free Trade Agreement, for which President Bill Clinton pushed so hard. While Democrats stayed home, Republicans mobbed the polls and won races all the way down the ballot. It's the midterm rule: No base, no victory.
But this doesn't mean independents or swing voters can be ignored, and there are ways to turn out the base that don't turn off the middle.
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The president must distance himself from Wall Street, to which his administration looks much too close. The bank bailouts and the arrogant behavior of the titans of finance enrage not only progressives but also moderate middle-class voters unaccustomed to multimillion-dollar bonuses. On the right, the tea-party movement gains traction by casting big government and the big banks as unseemly bedfellows.
While Carter and Clinton could both point to progressive legislation enacted during their terms, many of their most significant achievements -- the deregulation of transportation, the consolidation and deregulation of finance, the abolition of welfare, the enactment of trade agreements with low-wage nations -- actually eroded the economic security that Franklin Roosevelt, Johnson and their congressional contemporaries had worked to hard to create.
Unlike Carter and Clinton, however, Obama took office at a moment when the intellectual force of laissez-faire economics was plainly spent. His reform agenda was nothing if not ambitious: health care for all, financial re-regulation, climate-change legislation and a Keynesian stimulus to revive a wounded economy. But as the first anniversary of his inauguration approaches, it's clear that despite the impending enactment of a genuinely epochal expansion of health care, a progressive era has not burst forth. Major legislation languishes or is watered down. Right-wing pseudo-populism stalks the land. The liberal base is demobilized. The '30s or the '60s it ain't.
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The construction of social movements is always a bit of a mystery. The right has had great success over the past year in building a movement that isn't really for anything but that has channeled anew the fears and loathings of millions of Americans. If Glenn Beck can help do that for the right, can't, say, Rachel Maddow and Keith Olbermann help build a movement against the banks or for jobs programs? It might well be too little too late, but without left pressure from below, the Obama presidency will end up looking more like Carter's or Clinton's than Roosevelt's or Johnson's.
Bailing out and coddling the big banks is the number one reason that swing voters, Democratic base votes, and Democratic activists have gotten angry at the establishment and less inclined to support Obama. If Democratic candidates on the ballot this year take up the anti-big bank banner, they will reap big benefits, because the anti-Wall Street movement is gaining momentum. And if the rest of us start challenging Wall Street's power in other ways, we might really begin to change America in a serious way.
Democrats repeatedly fail to fight for first principles. Voters are angry. Democrats are now the party of incumbency in a nation that again demands change.
It is astounding that Republicans, who adopt nihilism as a strategy and banana-republic obstruction as a tactic, who hope that America fails as a plan and who have popularity at rock-bottom levels, could win a major election victory over Democrats.
With a president who remains on the sidelines and a majority that becomes a mockery, the Senate looks like the movie "Casablanca" without Bogart or Bergman.
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Here is a great truth that remains unspoken in official Washington today: On issue after issue it is the Progressive Caucus that speaks for the majority of political independents, not the president who gives in too easily, not the Republicans who oppose any change, and not the Casablanca Democrats who exploit the 60-vote rule for petty cash, petty pork or petty vanities.
While Democrats surrender on a long list of major healthcare reforms supported by large majorities of independents, insurance and drug companies pour campaign cash into Republican coffers in states throughout the nation. The front page of The New York Times said it all, in bold ink, on Dec. 29: "Money pours to G.O.P."
These gushing rivers of special-interest money are aimed at electing Republican governors and state legislators, who would dominate the great redistricting following the 2010 census, threatening Democratic members of the House and Senate in 2010, sounding a death knell for Democratic control of the House once the redistricting is done, if not sooner.
Insurers and Big Pharma cannot be blamed for thinking of Democrats, Never give a sucker an even break. First they induce surrender on progressive issues of great popularity with independents at the federal level, then they wage partisan war against Democrats at the state level, against what is left of an unpopular bill.
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It is false and folly to suggest Democrats win by repeatedly surrendering on issues where they speak for the majority. Only by fighting for the majority they represent will Democrats win the next great change election that is coming.
Also, Steven Greenhouse on the the backlash to the Obama Administration's push for the regressive Chevy Tax.
