Thursday, December 09, 2010

The perspective of corporate Democrats

Markos Moulitsas gives a good description of the perspective advocated by corporate Democrats of the Third Way group, which supports Social Security Phaseout, in Third Way tells Democrats to stop being Democrats Daily Kos 11/05/2010:

Twenty-two of Third Way's board members hail from the financial sector, and Wall Street certainly fears economic populism. Of course they want to ditch it! But that has nothing to do with wanting the Democrats to win, and everything to do with protecting their monster slice of the American economy (even as they demand that pensioners lose their promised retirement benefits). In reality, no one gives a shit about deficits -- except those who want to use them as an excuse to destroy the government's social net. If unemployment stood at 5% today, all the deficits in the world would've meant nothing.

Look, the bottom line is that you have a group of corporatist Democrats that watered down Democratic legislation because they argued it was necessary to win their districts. They got wiped out. Their prescription for survival, one which had pernicious effect on Democratic effectiveness the last two years, was proven to be a loser.
Paul Krugman has a very different take on what the Democratic Party needs to do, as he explained in a column from about the same time, The Focus Hocus-Pocus New York Times 11/04/2010:

Mr. Obama’s problem wasn't lack of focus; it was lack of audacity. At the start of his administration he settled for an economic plan that was far too weak. He compounded this original sin both by pretending that everything was on track and by adopting the rhetoric of his enemies.
And he is right about the core of the Blue Dog message, whether it comes in the Third Way package or some other:

Of course, there's a subtext to the whole line that health reform was a mistake: namely, that Democrats should stop acting like Democrats and go back to being Republicans-lite. Parse what people like Mr. Bayh are saying, and it amounts to demanding that Mr. Obama spend the next two years cringing and admitting that conservatives were right.

There is an alternative: Mr. Obama can take a stand.
The effects of the economy would have likely hurt the Democrats in the 2010 elections in any case. But Krugman is right that the Administration didn't do what it needed to do for the economy, and wound up reinforcing the Republican opposition far more than it ever should have:

Meanwhile, the administration's bank-friendly policies and rhetoric — dictated by fear of hurting financial confidence — ended up fueling populist anger, to the benefit of even more bank-friendly Republicans. Mr. Obama added to his problems by effectively conceding the argument over the role of government in a depressed economy.

I felt a sense of despair during Mr. Obama's first State of the Union address [2010], in which he declared that "families across the country are tightening their belts and making tough decisions. The federal government should do the same." Not only was this bad economics — right now the government must spend, because the private sector can't or won’t — it was almost a verbatim repeat of what John Boehner, the soon-to-be House speaker, said when attacking the original stimulus. If the president won't speak up for his own economic philosophy, who will? [my emphasis]
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