[Editor’s Note: Due to a technical glitch part of this post was missing today. So we’re reposting it and putting in on top.]
How can a sitting Democratic President in 2012, who came to office with a huge electoral mandate four years earlier in the wake of a Republican-generated economic disaster, actually look like he might lose this coming November to a Republican who politically, economically and even personally so perfectly embodies virtually everything that got this Democratic president elected in 2008? The simple answer: Mr. Obama’s behavior toward Wall Street since coming into office.
FDR’s New Deal didn’t bring an end to the Great Depression. When he ran against Kansas Governor Alf Landon in 1936, the country was still wallowing in post-1929 economic misery. Republicans that year could say (and did say) with great honesty that FDR’s policies hadn’t brought back prosperity.
What these policies did do, however, was honor FDR’s promise to give the country a New Deal, especially as it applied to a Wall Street establishment the country distrusted and disliked for very good reasons. In the wake of his 1932 victory FDR did not dump advisers with populist notions with regard to The Street. He didn’t seek to reassure The Street that things wouldn’t change in major ways. He didn’t shy away from financial reforms that would dramatically change the way The Street operated. He didn’t stop hammering away at The Street so as not to offend big players there who might contribute big money to his campaign. He didn’t just take occasional verbal whacks to play to a voting base.
Voters in 1936 responded accordingly. Six months before that year’s election there wasn’t anyone in the country, Republican as well as Democrat, who didn’t know who would win in November. FDR cruised to the greatest electoral victory that year since 1820.
Compare what FDR did with respect to Wall Street with what Barack Obama has done since coming to office. Mr. Obama promised change and hope in 2008. He’s given little or nothing with respect to Wall Street. He traded the populist, truly reform-minded economic advisers he had during his 2008 campaign for a Wall Street friendly Tim Geithner — an adviser and Treasury Secretary whose counsel regarding Wall Street might charitably be termed protective, and less charitably, but perhaps more accurately, plain out appeasement.
Mr. Obama’s general stance toward Wall Street has been to reassure it, not rock the boat, not change things in major ways at all, or only change them in ways that can easily be undone directly via later legislation or less directly through lobbyists’ quiet efforts. When he actually deigns to say negative things about The Street, the comments are nuanced. And after one such obviously politically motivated tweaking, he went off to meet with hedge fund heavies with his hand out, bringing assurances that any nasty comments were just campaign necessities.
I will vote for Mr. Obama this November because the alternative is far worse. Many, perhaps most progressives like myself, will vote thus for the same reason.
But if Mr. Obama actually manages to lose this coming November, something that should have been as politically impossible as an FDR defeat in November 1932, I’ll know the reason why — Wall Street, and his astonishingly foolish behavior toward The Street from both the political and economic perspectives.