New Democrat Update - October 2008
HOW POLARIZATION GETS IN THE WAY
The recent collision between the political and financial systems starkly revealed deep and troubling concerns about Washington and Wall Street. Both require healthy levels of confidence, something in very short supply right now.
Without question, the economy is facing a very real crisis. The government was forced to take over Fannie Mae and Freddie Mac, as well help rescue some banks and other companies. Despite all that, Americans just do not believe the political establishment. Their faith in the federal government is just as low as investor confidence in mortgage-backed securities.
These days, crises seem only to result in more political polarization. The political center could not hold here because the left wanted more homeowner protections while the right insisted on less federal intervention. Neither side could get everything it wanted so, once again, Washington demonstrated an inability to solve a big problem.
The growing disconnect between citizens and their government could not be more glaring. In a recent public survey conducted by Harvard, 77% declared there was a crisis of leadership. As a USA Today-Gallup poll conducted September 26-27 showed, voters viewed the financial rescue proposal as a pox on all houses. Only 39 percent and 31 percent approved, respectively, the Democratic and Republican leadership’s response. Bush, despite the very real advantage of the presidential bully pulpit, could only garner a mere 28 percent.
An unconvinced public (partly because the problems on Wall Street have not yet hit Main Street), combined with a deep political divide in Washington, could translate into economic disaster. As respected Washington Post business columnist Steven Pearlstein pointed out:
"Americans fail to understand that they are facing the real prospect of a decade of little or no economic growth because of the bursting of a credit bubble that they helped create and that now threatens to bring down the global financial system . . . Restoring real stability to financial markets will require the kind of systemic approach and extraordinary government interventions that the public has refused to authorize and finance. In better times, the public might have put aside its reluctance in response to the strong and unified recommendation of political and business leaders. But it is a measure of how little trust remains in both Washington and Wall Street that voters are willing to risk a serious hit to their wealth and income rather than follow their lead.”
Rebuilding trust requires first learning the lessons of our recent past. One major cause of the country’s troubles lies in our increasingly polarized politics.
The Bush administration bears a big brunt of the responsibility for getting the country in this mess in the first place. Its ideological rigidity and irrational hostility toward government has resulted in the systematic rejection of any rational, cost-effective economic regulation, regardless of the new challenges that have arisen from an increasingly globalized and ever-changing economy.
In addition, Bush’s pleas for action on the crisis have been unsuccessful because voters just do not believe him. The president’s false claims made during the run-up to the Iraq war, incompetence during and after Katrina, and the stretching of the truth on so many fronts (censoring science, as well as politicizing abortion and global warming) has fatally damaged his credibility.
How conservatives got to power was also counterproductive. Led by the likes of Karl Rove, they conducted belligerent partisanship “take-no-prisoner, whatever it takes” politics both during election cycles and while governing. Often politically effective for that day’s news cycle, it was only a matter of time before such behavior would further erode public trust and decisively turn public opinion against the administration and Washington.
It has gotten so bad that conservatives do not even trust each other. House Republicans overwhelmingly voted against the strong wishes of a Republican President, a Republican Treasury Secretary, a Bush administration-appointed Federal Reserve Chairman and their own congressional leadership. Senator John McCain, Bush’s would-be GOP successor, also proved to be less than persuasive with the rank and file.
Republicans have been running Washington for much of this decade, and thus, it would be misleading to equate the extent of Democratic misdeeds with those of the GOP. Too often, the media and those on the right have tried to equally and inaccurately blame both sides.
Nevertheless, some in our party continue to insist that the best antidote to Republican polarization is more polarization, only Democratic style. They want a left-leaning version of Karl Rove-like politics.
At a time, when Democrats might well regain the White House and increase their majorities in Congress, taking a Rovian path would not only hurt the country but the party’s long-term political prosperity as well. As Republicans are learning, a party cannot stay in the majority for long merely by playing politics and forgetting about governing. The public figures out that game rather quickly.
. . . AND WHAT TO DO ABOUT IT
Instead, all Democrats should follow Senator Barack Obama’s consensus-building leadership style, emphasizing the bridging of differences, rather than an obsession with presenting voters with evermore starker choices between the parties. As the Democratic presidential nominee so aptly demonstrated in the first debate, there is nothing wrong in telling voters when you agree, as well as disagree, with your opponent.
Minimizing polarization is not just about making everyone feel better. It is a means toward better public policy through considering a wider range of views and gaining broad public support.
Obama’s demeanor on the stump, after the House failed to approve the rescue plan, has been devoid of angry rhetoric and long on thoughtful calmness. On September 30 in Reno, Nevada, Obama delivered the right kind of message we need from other leaders across the ideological spectrum:
“Hardworking Americans who invested their nest egg to watch it grow are now watching it disappear. But while the decline of the stock market is devastating, the consequences of the credit crisis that caused it will be even worse if we do not act and act immediately.
Because of the housing crisis, we are now in a very dangerous situation where financial institutions across this country are afraid to lend money. If all that meant was the failure of a few big banks on Wall Street, it would be one thing.
But that’s not what it means. What it means is that if we do not act, it will be harder for you to get a mortgage for your home or the loans you need to buy a car or send your children to college. What it means is that businesses won’t be able to get the loans they need to open new factories, or hire more workers, or make payroll for the workers they have. What it means is that thousands of businesses could close. Millions of jobs could be lost. A long and painful recession could follow.”
That demonstrates the kind of leadership American desperately needs. It shows a strong willingness to confront our many challenges and telling the American people what must be done in everyday language. In addition to reforming how our government works - including a modernized financial regulatory architecture, the next administration, in close partnership with a much less partisan Congress, will need all of that and more to successfully strengthen our national security and revamp our health care, education, political and retirement systems.
The stakes are high.