The Obama ''trickle down'' is, sadly, not all that different from the Bush-Paulson strategy. Like its predecessor, it endorses the bailout of giant financial institutions as the linchpin of its economic policy. It is, simultaneously, profoundly anti-democratic and anti-capitalist.It has made all the difference in the world having a Democrat in the White House directing our foreign policy. No more crazy neo-cons starting wars on false pretenses and planning and hoping for a half dozen more. Sane policies and a touch of humility on the world stage have made the world a safer place for everyone.
Other aspects of the Obama policy seem likely to prop up Wall Street traders at the expense of the rest of us. The administration's big ''cap and trade'' proposals could prove more advantageous to well-heeled ''carbon traders'' than to the environment. The other big winners may be Silicon Valley venture capitalists, who-- increasingly bereft of their own ideas for making money--hope to cash in on Washington-subsidized energy schemes.
Of course, not all Democrats have sold out. Sens. Byron Dorgan, D-N.D., and John Tester, D-Mont., have expressed opposition to bailing out ''too big to fail'' institutions. New York Attorney General Andrew Cuomo has been fearless in unveiling the enormous Wall Street bonuses--over $32.6 billion last year-- handed out as firms suffered $81 billion in losses and almost drove the world economy to ruin.
Unfortunately, these are exceptions. Illinois Sen. Dick Durbin recently admitted that the banks remain ''the most powerful lobby on Capitol Hill,'' adding that they ''frankly own the place.''
So far in 2009 the Democrats have netted nearly 60% of all campaign contributions that have come from the financial industry, now the largest sector in terms of donations. The biggest donations have gone to such influential Democrats as Sen. Charles Schumer and his sidekick, newly appointed Sen. Kirsten Gillibrand, from New York; Sen. Chris Dodd D-Conn., and Majority Leader Harry Reid D-Nev. Schumer, the Street's leading vassal in Congress, has emerged as the rising star in the Democratic leadership. If Majority Leader Reid loses his seat--as is now possible, according to polls in Nevada--Wall Street's main man could well end up a future Majority Leader.
Some Democrats try to have it both ways, playing populists for the peanut galleries but getting cozy with the industry when it matters. Massachusetts Rep. Barney Frank, the House Financial Services Chairman, talks tough but has a history of friendly relations with financial powerhouses. One of Frank's own top assistants, Michael Pease, just went to work for the biggest winner since taking TARP bucks, Goldman Sachs. As left-winger blogger Glenn Greenwald put it recently: ''The only way they can make it more blatant is if they hung a huge Goldman Sachs banner on the Capitol dome and branded it onto the foreheads of leading members of Congress and executive branch officials.''
In the end the faux populist Democrats end up with policies that make Ronald Reagan's ''trickle down'' seem downright Leninist. Harry Truman once quipped that ''There should be a real liberal party in this country, and I don't mean a crackpot professional one.'' Sadly, it's increasingly the latter.
The hypocrisy should open a path for the Republicans as wide as the Grand Canyon. But the ill-named Party of Lincoln still seems to think that the path to power lies in the tired old formula of ultra-patriotism, guns, abortion and religious rectitude. Screaming ''socialism'' may awaken the spirits of some on the old right, but it's hard to make a convincing case when George Bush socialized banking and grew the deficit.
You certainly can't trust big-business conservatives to stop bonuses for the TARP babies, particularly the 25 financial firms deemed ''too big to fail'' by the likes of Ben Benanke. Give GOP big-business leaders higher stock prices, and they will follow you anywhere. Only a few--such as Sen. Charles Grassley, R-Iowa,--have shown they are truly serious about the free market or defending the interests of the regular taxpayer.
Given this sad political picture, the best hope now is to build an alternative perspective that focuses on the basic economic issues. This would not be the media celebrated movement of moderates--Democrats-lite and Republicans-lite--who seek kumbaya through compromise. It would, instead, require a radical third tendency--neither strictly left or right--that would draw on long-term American priorities and values.
These new radicals would focus on basic issues like improving infrastructure, and primary education and bolstering the nation's productive economy. Their inspiration would come from a long tradition of federal successes--from the Homestead Act and the WPA to the Interstate Highway and the space program. They would view the financial crisis not as an imperative for protecting the well-connected but for financial reform, decentralization and innovation.
Such an approach would address what the British author Austin Williams calls our ''poverty of ambition.'' Americans historically have rejected a future constrained by entrenched hierarchies. Most, I believe, would support spending money and paying taxes, if it was spent to achieve big things that would lead to a greater, more widespread prosperity and opportunity.
Just imagine if the upward of $1 trillion spent guaranteeing Goldman Sachs and Citigroup executives giant paydays had instead gone into roads, bridges, subways, buses, port development, skills training, energy transmission lines and basic scientific research. And imagine if instead of protecting Citigroup and Bank of America, we encouraged stronger local banks and solvent financial entrepreneurs to fill the breach left behind by gross failures.
But in domestic politics I think the difference is not so much. It will make a difference on health care reform because with Republicans in charge it would simply never happen. But we won't get the radical reform we need for the simple reason that Congress is in bed with the pharmaceuticals and HMO's and insurance companies and physicians and everyone else who has grown rich off of the dysfunctional system we have now.
Same with the financial industry. They own the place. A trillion dollars to bail them out and nothing changes. Big bonuses for those who are adept at moving money around - but not 'down' to the small businesses that need loans or homeowners who are going under. The rich get richer and another long jobless recovery begins where everyone who isn't rich doesn't feel very much like anything has recovered at all.
But thank God we have Wal-Mart!
I think there is something to be said for taking as much money out of the big economy as possible and supporting local businesses and farms and co-ops. And... supporting small operators in emerging economies through micro-loans and SERRV and Ten Thousand Villages.
Politically we need a real populist movement that isn't nativist and fear-based ala Lou Dobbs, but one that focuses on support for decentralized and local economies in combination with a robust federally funded government that takes care of the big items like health care and infrastructure where bigger really is better. What we don't need any more are the too-big-to-fail banks and financial institutions and the politicians who answer first to them.
I am very glad that Obama is President and that Democrats are in charge of Congress. But having them in power just shines a light on how deeply tilted our political system is in favor of the very rich. We need to save them from themselves and remind them of who voted for them and why.