Obama’s First Year: Why He Deserves a More Enthusiastic Endorsement from the Left

N. Lichtenstein: Why Obama Needs the Left

THERE ARE two sets of questions one must ask about the first year of the Obama presidency and its disappointments. First, to what extent is the discontent on the left the product of Obama’s own hesitancies, limitations, and proposals? And to what extent are his low poll numbers and the obvious skittishness of Democrats and liberals a product of a program that is inadequate and misdirected?

Second, to what extent are the difficulties of the Obama presidency the product of forces and structures outside his control—the political opposition, the dysfunction of American political institutions (the Senate is one key example), the legacy of the recession and Bush policies, and the popular distrust of bold reform efforts?

Let’s start with the first set of questions. Barack Obama has, in some respects, always represented the more conservative wing of the Democratic Party. As a candidate, he was not in favor of a health care mandate designed to enroll millions of additional adults in a system of near-universal health care and he made a point of saying we should move funds and troops from Iraq to Afghanistan.

This was the case, in part, because Obama’s program–like those of other would-be reformers–was not merely his own but the product of a generation of debates, trial runs, and partial successes among reformist liberals. In this way, he was the consensus candidate. His wall-to-wall support on the liberal-left reflected a unity about the reform agenda—health care, counter-cyclical spending, labor legislation—that was not there in mid-1970s or 1980s when liberalism was defined more sharply by the post-sixties social issue agenda and when a certain confusion reigned among those who sought to regulate, or not regulate, an economy that for the first time in more than a generation failed to combine economic growth with a rise in working-class living standards.

But contemporary liberals and leftists, while in agreement over a larger set of economic ideas, were not prepared for the financial crisis that began with the housing bust and soon convulsed Wall Street. There was no consensus here, no long period of internal debate about how to reregulate the financial system. So Obama’s reliance on Wall Street, which had been plentiful during the campaign, ended up as his default politics on this issue. Had there been no crisis, Obama’s honeymoon might well have lasted a good deal longer. But the various bailouts generated a wave of populist anger when no big reforms and no immediate return to an upward growth path emerged from the crisis. Backlash was inevitable once the dimensions of the bailout became apparent and once the real purpose–plugging the gaps and sustaining confidence in the existing financial system–became clear.

But let us honest to be here. Would it really have mattered in terms of Obama’s popularity if, after spending several trillion dollars, the banks had been better regulated or even nationalized? I think not. Remember that the House of Representatives rejected the Bush Administration bailout at the very height of the crisis on the basis that it was programmatically incoherent—if not right wing. To make the obvious historical analogy: FDR’s bank holiday and his regulatory interventions in 1933 were hardly radical; in fact they stabilized a banking system that was even more widely hated and disdained than that which exists today.

THE Administration/Congressional health care plan is messy and often contradictory, but in essence it also embodies a grand bargain—a sort of corporatist deal not unlike many of the great welfare state reforms we associate with the New Deal and the Great Society. No radical reform of the system is possible. There are too many institutional roadblocks, and there is too much culturally embedded fear of government, even before the “tea bag” eruption exacerbated such an impulse.

As a consequence we are faced with the necessity of a rough bargain hammered out between those who favor a near-universal system of health care provision and those institutions, associations, and businesses whose profits, income, and operating methods are now under scrutiny. In return for a huge government subsidy and for a set of modest mandates on individuals and employers, a near-universal coverage could be achieved with the possibility of covering 90-94 percent of the population. With wall-to-wall coverage, including the forced draft enrollment of millions of healthy young people—30 million new customers!—the insurance companies would finally stop cherry picking their clients and accept a limited degree of regulation with the prospect of more to come. In effect, they would become very prosperous, government-subsidized quasi-utilities.

This grand bargain was accompanied by a lot of lesser bargains, some not so pretty. The Obama people wanted to avoid the fate of the Clinton health care reformers, who had failed to nail down the support of the key business and institutional players. So in the winter and spring of 2009, Obama’s top health policy aides finalized a bunch of deals with Big Pharma, the hospital associations, doctors, the insurance industry, and even Wal-Mart, which on June 30 announced that it would be willing to accept an employer mandate in return for some kind of lid on overall health care costs. (Wal-Mart was immediately assailed by the rest of the retail industry as an unprincipled turncoat.)

All of these deals required the institutional players to take a modest financial hit in return for guarantees that reform would not get out of hand in Congress. Obama thereby forestalled a new round of Harry and Louise commercials; indeed some of these health industry groups put ads on the air and in newspapers endorsing the general outlines of an Obama health care reform.

The other thing that President Obama thought he had learned from the Clinton health care debacle was to let Congress do it. Avoid imposing a presidential scheme on a fractious Democratic caucus. There were just too many interests and players to accommodate by putting forth a plan, no matter how rational, reasonable, and efficient.

This Congressional path was further thought to be politically adroit because of what turned out to be a major ideological and rhetorical mistake Obama made during the campaign: He promised an era of bipartisanship, which was taken serious by, among others, Max Bacus, the chair of the Senate Finance Committee. This turned out to be a fruitless quest, but before we denounce this gambit, one should pause to note the work it did for Obama in his rise to power. By positing the possibility of cross-party cooperation he won the support of huge numbers of voters, independents especially, but he also gave to the GOP a de facto veto over this particular campaign promise.

Indeed, the single most surprising development of 2009 was the remarkable, heroic, back-against-the wall solidarity of the Republican Party in general and of its Congressional delegations in particular. One would expect that after a substantial victory by the Democrats, those Republicans from blue state districts would think twice about opposing the Obama agenda, especially the stimulus, which meant free money for many hard-pressed state and local budgets.

And on health care many Republicans had, at various times, favored key components of the proposed law. History too might have led one to believe that there would be a slice of GOP bipartisanship: Social Security and even the Wager Act passed with some GOP votes, Medicare had 13 Republican votes in the Senate, and in 2007 there had been considerable GOP support for an expansion of the Children’s Health Insurance Program over and against the opposition of President Bush. But the Republicans held tough. I won’t detail the many reasons for their exemplary solidarity but just list some of the consequences.

Most important, the conservatives destroyed one of the prime rationales for a transformative Obama presidency: that it would end divisiveness and engender an era of good will. Here I cannot help but think that the GOP took a page from management’s anti-union handbook. Workers, especially those on the fence, hate conflict and contention. They may want a union, but if the price is continual tension, then it is not worth it; and over time managers know that such workers will blame the union even if the source of delays and division is the management and its anti-union consulting firms.

This has been the GOP battle plan—with just about the same results. The fence-sitters have distanced themselves against the Obama proposals, which they now see as causing contention while the GOP succeeds in energizing its base and capturing a million or two disillusioned voters.

THE OBAMA era has also been characterized by a surprising demobilization of the left and the liberals. In part, this is a function of historical happenstance. His election did not coincide with a bonus march, a strike wave, or a civil rights revolution. And historians are going to spend a lot of time figuring out why the December 2008 sit-down strike at Chicago Windows and Doors, which Obama endorsed, had no progeny.

But beyond all that, the health care initiative has not been fertile ground for a liberal-left mobilization no matter how much they dislike the erosion of the bill. Health care politics has never been a venue for mobilization on the left. At the ballot box, yes, but not in the streets. The passage of Medicare was not a product of mass meetings or demonstrations. The expansion of Medicaid, which would be a major innovation in the health care bill, hardly stirs left-wing hearts—even though it would mean15 million more of the working poor would become eligible for this state and federal program.

Of course, it is not only the particular causes that have demobilized the left; it is also all of the clever deals the Obama people struck with the banks, the wavering Democrats, and the health care interest groups that implied a promise not to mobilize left-wing opposition. This seems to have been the case in September 2009, in the wake of the tea party tantrums, when the prospect of a million person march on the Washington Mall by the left was in the offing, and the Obama people did nothing to encourage it (perhaps even urged against it).

I wish I could end on an optimistic note, but the Massachusetts debacle has put in question the fate of the most significant domestic reform initiative in more than a generation. The passage of a health care reform, whatever its deformities, would have offered Obama liberalism a second chance. The GOP had good reason to oppose it because the reform not only would have been a political victory for liberalism, but it would have had its greatest impact in precisely those red state districts whose congressional representatives were most opposed. It is in South Carolina and Texas that the dramatic and humane expansion of the state into the lives of ordinary folk would be most apparent. They would have seen a new entitlement in action: making it easier to quit a job, go to school, form a union, and make further demands on the government. The probable demise of the health plan therefore insures political trench warfare for the foreseeable future. Obama is not finished, but the shelling from the opposition will continue to be intense and the liberal-left casualties heavy. Get ready for a long and defensive fight.

Nelson N. Lichtenstein is professor of history at UC Santa Barbara and director of its Center for the Study of Work, Labor, and Democracy.