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The first and most obvious point is that Josh and I don’t disagree that the 2008 financial crisis is the huge, in many ways defining, event that all our politics today flow from. No disagreement there. We also agree that a key element of the last decade is that Obama and to some degree Democrats got saddled with the blame for ‘big government’ because of extraordinary spending to cushion the effects of the financial crisis that happened on President Bush’s watch. To put it more crisply, Bush left the scene. Republicans, fairly disingenuously, disowned him and pretended that history began in January 2009. The real kernel of the issue is the impact of Obama not pushing through more profound structural reforms of the economy amidst the crisis and not pushing for more aggressive criminal enforcement for the various bad actors who helped trigger the crisis. We’ll get to that in a moment.
For now, suffice it to say that, yes, the financial crisis is a massive driver of our contemporary politics. A clearer, better and I think very accurate argument is that Obama’s failures led to the Sanders movement. That’s neither surprising nor a bad thing. This is both because of the shortcomings of grappling with the financial crisis which has generated a profoundly different attitude toward the economy for Americans under 35 and also because of the shortcomings of incrementalism more broadly that Obama illustrated. (Here it is worth noting that this isn’t just the shortcomings of the response to the crisis but the crisis itself. This may seem like an obvious point but I’m not sure people quite absorb it.)
Here the Affordable Care Act, which I strongly support, is as emblematic as the financial crisis itself, though the latter is vastly more consequential. President Obama used his political capital to push through a version of health care reform which had its origins as a Republican idea to prevent a single payer type or more government regulated version of health care reform. (For this you have to go back to the doomed Clinton proposal from 1993-94.) Yes, it’s more progressive and generous in its subsidy structure. And there’s Medicaid expansion which was a huge part of the overall package. But at the end of the day, you have Democrats trying to meet Republicans half way, perhaps arguably more than half way, getting literally zero Republican votes and then seeing Republicans exploit the inevitable transition bumps, sabotage the program legislatively and mount a years long effort to strangle the proposal in the courts. It locks in the role and profitability of private insurers and yet those same lobbies spent years in a rearguard fight to upend it.
This is the very strong logic of Medicare for All. Why are we arguing with ourselves, resorting to complicated regulatory structures to meet Republican demands for ‘market oriented solutions’ when Democrats get attacked for that complexity and get zero Republican buy in? At a minimum, start the negotiation with what the country should have, which is some version of the plans which exist across Europe and in virtually every other wealthy industrialized democracy? At least as a matter of moving the Overton Window this is certainly the better approach.
A similar dynamic applies to the financial crisis. Obama literally saved capitalism, at massive political cost to himself and his party and Republicans used the carnage to attack him as a socialist. If that’s going to happen anyway, why not actually use the political capital to reform the system?
Of course, it’s not only hyper-caution. Obama’s top economic advisors were still cut largely in the Clintonite mold, technical fixes and management over a deeper critique of late-20th century laissez-faire economic orthodoxies. Indeed, it’s not just about Sandersism. Democratic policy types across the spectrum have moved significantly in a more progressive direction during and since the Obama years and not only because of Sanders. Probably nowhere is this clearer than on the front of macro-economics.
This all makes sense since these are evolutions within the left and center-left. Both the successes and failures of Obamaism have created the powerful and fractured Democratic coalition we see today.
A lot of people argue that the failure to hold people criminally liable for the financial crisis is the central issue. I agree this was a mistake. And I think it goes to Obama’s essential small-c conservatism, disregarding the inherently political (not partisan but political) nature of criminal justice. I simply don’t believe it had the scope of consequences many claim nor do I think it was as easy to do otherwise as some like to think.
And here I return to my real point. Yes, the financial crisis is a huge driver of our politics on the right and left – in the accentuation of bad economic trends, the delegitimation of public institutions. But Trumpism is mainly a product of the radicalization of the GOP over the last two to three decades. That not only precedes the economic crisis. It draws on trends and aims that are quite alien to the conversations I’ve noted above. My argument is certainly not that Trumpism came from nowhere or that the solution to it is simply to turn back the clock. It is that the ‘Obama gave us Trump’ or ‘Neo-liberalism gave us Trump’ conventional wisdoms really amount to a kind of center-left navel gazing that imagines that the right somehow doesn’t really exist, that the radicalization of the American right is something that doesn’t need to be understood on its own terms.