Value Chain: Why Voters Punished Obama and the Democrats

Last Updated Nov 7, 2010 2:38 PM EST

Many of the post-mortems on the GOP's large congressional gains this week focus on Barack Obama's alleged difficulty connecting with voters. If Americans saw red, the theory goes, it's because the president failed to stir their souls. Here's Nick Kristof in a variation on the theme that specifically takes issue with Obama's rhetorical style:
Please, Mr. Obama! The prose needn't be as dry as the Harvard Law Review. And we wouldn't mind being lifted by an occasional verse of poetry.
Defeat at the polls inevitably prompts this sort of critique. Pundits and political pros fault a leader's fuzzy messaging, apparent aloofness, uninspiring vision and, in this case, aversion to rhyme. Often, blame is laid on the failure to develop a proper "narrative," with the underlying suggestion that elections are, above all, about telling stories. Where Republicans often press their candidates to strike a tougher pose, Democrats typically want theirs to present a more empathetic one.

Like all cliches, there's a grain or two of truth in all such nostrums. And yet they obscure a deeper truth about elections: Politicians fail less because of, to borrow Kristof's term, a dearth of "poetry" than because of a dearth of values. By that I mean a political and economic ethos that guides choices about policy, legislation and other decisions of state.

Many things explain why Obama and his party got pasted on Tuesday -- high unemployment, Republican obstructionism, Democratic apathy, and, yes, a clunky narrative -- but the major reason is that they lost their nerve. And that, in turn, stems from the administration's disengagement from traditional Democratic values. Because of course, values are the story. As American Prospect co-editor Robert Kuttner, a prominent liberal, remarks on the challenge of fixing the economy in wake of an epic financial crash:

Obama either had to succeed big, or it was guaranteed that he would fail big....
[O]bama did not decide to be bold in his first two years in office. He decided to be timid and conciliatory. People on his own economics team, such as Christina Romer, were telling him that the stimulus was far too small, and that it was too tilted to tax cuts.
Paul Krugman echoes this line, pointing to Obama's lack of "audacity" in backing a fiscal stimulus package that, while politically feasible, was far too small to put the economy back on track.

Nowhere was this diffidence more apparent than in the government's approach to re-regulating Wall Street. Presented with the best opportunity since the Great Depression to overhaul an industry that capsized the U.S. economy, Obama played it safe. A plan to nationalize large, insolvent banks -- a tried and tested solution for such crises -- was summarily rejected.

Instead, we got Dodd-Frank. Although the financial reform law contains worthy elements, such as clamping down on derivatives and protecting consumers from abuse, Republicans are now threatening to scuttle these critical provisions and to deprive key regulatory agencies of funding. During the debate over Dodd-Frank, the White House and U.S. Treasury also allied with bankers to thwart efforts to restructure the financial industry by, among other things, rebuilding the divide between federally guaranteed commercial banks and investment banks.

No one is happier with that outcome than Wall Street, which Charles Gasparino says is far less hostile to Obama than is commonly thought:

The occasional dressing-down notwithstanding, the president and his administration are still seen by many on Wall Street (and Main Street) as being on the side of Wall Street. Or as one senior J.P. Morgan executive told me recently under condition of anonymity: "We may be pissed at Obama, but when it comes down to it, he was pretty good for our business."
The government has shown a similar reluctance to confront banks over the "robo-signing" scandal. Even as evidence piles up of homeowners being illegally evicted from their homes, Obama and other top officials have argued against even a temporary halt in foreclosures. That same deference also crippled the administration's main mortgage modification program, HAMP, which fails to hold loan servicers accountable for refusing to work with homeowners in earnest. It also drove the White House in 2009 to oppose proposals to let bankruptcy courts write down mortgage principal for struggling homeowners.

It's a platitude to observe that Obama alone isn't to blame (presidents never are). As ProPublica recently documented, from the earliest days of the financial crisis so-called Blue Dog and New Democrats exploited their position on key congressional committees to solicit political contributions from big banks in exchange for diluting financial reform:

Three days after Lehman Brothers collapsed in September 2008, the New Democrats unveiled a financial-reform working group co-chaired by [Illinois Rep.] Melissa Bean. The group was piloted by John Michael Gonzalez, Bean's chief of staff, who left four months later to lobby for several banks and financial-services trade groups.
The co-chair of that group was Connecticut Rep. Jim Himes, a former Goldman Sachs (GS) banker. ProPublica notes that the head of the Financial Services Roundtable, a leading industry lobbying group, labeled the New Dems "awesome."

No couplet, no matter how felicitious, can redeem such craven self-interest. If Obama is to be faulted, let it be for presiding over what Chris Hedges recently called the "death of the liberal class." And if conservatives are tempted to rejoice, they shouldn't:

It means there is no longer any check to a corporate apparatus designed to further enrich the power elite. It means we cannot halt the plundering of the nation by Wall Street speculators and corporations. An ineffectual liberal class, in short, means there is no hope, however remote, of a correction or a reversal through the political system and electoral politics.
That political collapse amounts to -- here we are again -- a moral retreat on the critical issues of the day. Save the poetry; give me values.

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    Alain Sherter covers business and economic affairs for CBSNews.com.