Published: September 2, 2010
The Democrats could be heading toward a defeat of historic proportions in November, but it is possible to imagine a scenario in which things might have turned out differently:
On Dec. 16, 2008, President-elect Barack Obama and his senior aides gathered for a briefing on the state of the U.S. economy. It was horrifying. The economy was on the verge of collapse. There was little prospect that robust growth would be returning anytime soon.
Many of the president-elect’s advisers had been reading histories of the New Deal. They had ambitious plans to address the crisis: federal jobs programs, new building projects, new spending initiatives. This was no time to worry about deficits, they said. This was an opportunity to address needs that had been neglected for decades.
Obama, in this fanciful version, held up his hand. He told his aides to put away the history books and reject the New Deal comparisons. Unlike in 1932, Americans today have a raging distrust of Washington, he observed. Living through a crisis caused by excessive debt, they will viscerally recoil at the prospect of federal debt without end. “Somehow,” Obama concluded, “we have to address the crisis without further terrifying the American people.”
The stimulus package, he continued, should rely heavily on cutting payroll taxes. This, he argued, will send a quick jolt to the economy without concentrating power in Washington. It will deliver a sharp psychological boost to the middle class. It might even be bipartisan. Obama noted that John McCain had a $445 billion stimulus plan along these lines and his fellow Republican senator, Mel Martinez, a $713 billion plan.
Nancy Pelosi and the Democratic committee chairmen were upset. For decades they’d been storing up spending proposals. This was their chance to pass them all. The president told the House speaker that she would get many of her priorities, but not in a 100-day rush. Privately, Democratic aides developed a political strategy they called Save Nancy From Herself.
She may know San Francisco, they warned, but she doesn’t know America. If she has her way, the Democratic Party will spiral back to 40 percent support and she’ll be minority leader again.
Obama and his aides wanted to pick fights with Republicans, but on their own terms. Above all, they wanted to avoid the big government versus small government debate of the past few decades. This was the one argument Republicans knew how to fight and the one argument Democrats were bound to lose. Instead, they sought to frame the argument around growth and productivity — Democratic growth plans versus Republican growth plans.
At about that time, General Motors and Chrysler started teetering. Obama decided to help the companies if they were willing to make the tough choices that would boost long-term competitiveness. It occurred to him that this was the template for the whole country.
For decades, Obama told the nation, America had squandered its advantages and now the crisis had come. There would be no quick fixes. But in this winter of recession, America could rebuild its foundations. It could lay the groundwork for real and lasting prosperity.
Obama put signs around the White House: “No Quick Fixes.” Administration officials were forbidden from promising a short-term summer of recovery. They talked incessantly about long-term productivity. Democrats were going to define themselves as the economic Back to Basics Party. They wouldn’t let Republicans define them as somehow “alien” or “socialist.”
Obama not only bailed out Detroit, he created an infrastructure bank to rebuild roads and bridges for the long term.
In March, Congress passed an omnibus spending bill, stuffed with earmarks. Obama vetoed it. By this time it was clear that Republicans were going into rejectionist mode. They were opposing everything. To maintain their majority, Democrats would have to separate independents from the Republicans. They had to reassure independents that spending was being controlled.
April brought the cruelest fight: whether to spend the rest of the year getting health care reform or a new energy policy. Obama decided to do energy first. The economy was uppermost on everybody’s mind. Americans were wondering where new innovations would come from, what new jobs would emerge.
By doing energy first, Democrats were able to spend the entire summer talking about technological advances, private sector growth and breakthrough productivity gains.
Obama toured one small business after another, and got his energy bill. In the fall, he gave a series of major speeches under the heading: “Our Children’s Economy.” He laid out a strategy for a century of growth.
Americans didn’t like all of it. But this wasn’t conventional big government liberalism. The Democrats seemed to be a serious party attending to serious things. When November 2010 rolled around, the unemployment rate was still high, but Democratic leaders had prepared voters for that. In the meantime, America was rebuilding its core, strengthening itself for better days ahead.