Obama's backers expected that a second depression would lead to a second New Deal. His victory seemed to bear out their predictions. The crisis was here, now was the time to exploit it. But instead of another New Deal, the crisis has led to an Anti-New Deal, a revolt against government regulation.
The left's dogmatic rigidity, its adherence to theories of history in which capitalism leads to socialism blinded it to the obvious. A major national economic crisis had come again, but the context of it had changed.
There was a world of difference between 1933 and 2010 in the level of government involvement in the economy. Today we are living in a New Deal world, reformed, moderated and elaborated on. Massive government intervention in the economy is not a radical new idea, it's business as usual. The architects of the New Deal could claim that they were addressing the failures of capitalism-- but today there is no longer any sector of the economy that legally takes place outside the sphere of government. The buck stops in DC.
The anti-capitalist rhetoric of the left has been unconvincing for that reason. When the two richest men in America hold fundraisers for the Democratic Party, does that mean the capitalists have taken over the party, or that the socialists have taken over capitalism? Most people intuitively know the answer to that. The modern economic reality is an oligarchy where public officials and private lobbies intersect.
The dirty handshakes between the public sector and the private led to this disaster. It's easy to call for more regulation in response-- but who regulates the regulators?
Obama rose to power on wheelbarrows of money from the rich, the super-rich and from unknown sources that have never been accounted for. He raised twice as much money as McCain, and while the media disinformation machine insists that it was the power of social media at work, it was actually the power of socialism.
Socialism is just crony capitalism misspelled, and everyone knows it. Everyone who has ever competed for a government contract, been forced to join a union by government mandate or been squeezed out of an industry by agreements negotiated between corporate lobbyists and their congressional allies that is. The more you regulate, the more you control.
New York Times columnists may kvell over Warren Buffett's eagerness to be taxed at a higher rate, but most people suspect that it isn't saintliness at work, but personal economic interest. The same interest that led Buffett, Bill Gates and other top billionaires to support Obama. There is nothing strange about the phenomenon of anti-capitalist capitalists. Capitalism is one way to make money. Socialism is another. The modern monopoly is as likely to rest on government regulation as on the naked marketplace. And the modern trust operates out of the White House and Capitol Hill.
But it is not just personal corruption that leaves the left a less than credible force of economic reform. The entire national context has changed.
There is no use denouncing the capitalists, as if it were 1929 outside the window instead of 2011. That old form of economic hegemony no longer exists except under government patronage. And there is also no use in pretending that the complex relationship between government and business can be untangled with only one of the parties getting the blame, while the other party gets the power.
The public is more accepting of government intervention today than it was then, but it is also more distrustful of it. And that distrust easily comes to the surface in a time of crisis which is why the movement to hold government accountable is gathering steam.
The Great Depression paved the way for a change in the relationship between the public and the government. And the Ought Depression may be doing the same thing. But while the New Deal made it a close relationship, the political wars of the last two years are leading instead to a breakup between the public and the government.
Progressive government has not only failed to avert several economic crises, it has also completely mismanaged the social safety net and become so hideously expensive that it can no longer be kept up. Those are all dangerously compelling answers and the left has come up with no response to them except to throw out conspiracy theories and cry racism. Such intellectual desperation reminiscent of a dictator ranting hysterically on a televised broadcast as the noose tightens around his regime.
This is the larger earthquake shaking Washington. And it's not just the ivory towers of the left that are trembling. The Republican Party has not built up the same type of political machine that its opposite numbers on the left have, but it's still the party of big government. Not for philosophical reasons, but for practical ones. Few people take a job only to make themselves redundant. And few politicians give up power once they have it.
The Republican Party is less likely to have a radical social agenda or to construct an empire of activists integrated into every level of the public and private sector to carry it through, but it isn't the party of freedom either. After the wild days of Teddy, it has been content to be the reasonable party. The party of moderates who come in to clean up the mess that the radical lunatics leave behind. To be the ones that the nation turn to when the FDRs and Jimmy Carters and Obamas make too great a mess. And then a very presidential figure sweeps in, fixes some things, throws out some others, raises taxes and does all the things that even his liberal predecessor couldn't get away with, and leaves to the cheers of a grateful nation with his 'Dime Store New Deal' clutched tightly in hand.
That's why the Tea Party is the real earthquake in Washington DC. A political movement dedicated to the political disarmament of government power. It's an attack on the centralization consensus, the cornerstone of progressive politics that says bigger is better and more central oversight is what gets the job done.
In a decade where a digital marketplace was created by allowing the natural self-organization of people to shape their own decision-- the decentralization proposed by the Tea Party is on the right side of history. The Federal government white elephant that seemed so impressive in 1955 looks like a hopeless antique in an age of freelance workers, reputation management and the self-ecosystem.
The evolution of technology has also led to a quantum leap in personal empowerment. Whether it's the Army of One or the Army of Davids-- the individual is the center of his own organization. And this conflicts with an ever more intrusive government which insists on telling people what to eat. With the family and the corporation collapsing-- the state is still trying to present itself as the one enduring thing in everyone's life. The cradle to grave state that can't take care of its finances, but promises to take care of you.
The exploitation of the economic disaster to create a 21st century New Deal failed because it was the ragged ends of the New Deal that had brought about the economic disaster, and the New New Deal that created an even bigger disaster with its uncontrolled spending.
The American public has lost faith in big government and in the messiah of big government. And a nation of people who feel out of control in the midst of a whirling economic crisis want to regain some control by taking it back from the bureaucrats, the lobbyists and the politicians. This is the real earthquake and when it strikes, then the golf game will be called on account of a hard electoral rain.