It is good to see the President and Vice President saying positive things about the Occupy Wall Street movement. The big question now is what happens when the rubber really meets the road.
Occupy Wall Street is speaking to the same dynamic I have been warning Democratic politicians about for a long time now, something that grows with every month of economic stress and political dysfunction: there is a growing divide between progressive activists/outsiders and the Democratic Party leadership. As long as there is the sense that the big banks on Wall Street and other big corporate special interests keep making massive amounts of money while the middle-class is getting crushed, the unemployed have no prospects, and young and poor people have no ladder to climb into the middle class, people are going to be angry. And if they don’t feel like the Democrats are actually fighting for them on these core economic issues, instead of helping the Democrats win elections, people like the folks in Occupy Wall Street will take to the streets and denounce both political parties and the entire political establishment.
My Democratic friends will argue that this isn’t fair, that they have a far better track record than the Republicans on helping people, and that they are trying really hard. I’m sympathetic to some of them, because there are a lot of good Democratic politicians who really do care about making things better for most people (the 99 percent, as Occupy Wall Street calls us). But they need to do some tangible things that will show people whose side they are on.
I believe there are three things that will really matter in determining whether most disaffected progressives and Democrats will go into the 2012 elections reasonably united.
The first is whether the President gives into the hostage taking Republicans on more big issues. He has improved his position dramatically with progressives in the last month because he has shown some real fighting spirit, and is not backing down or leaning backward to show how even-handed he is. He seems like he is actually fighting for us. He is showing strength and principled leadership, and it is winning him lots of points. But that all goes away in a hurry if he backs down again on something big.
The second factor is whether he takes some concrete actions of executive power to show he is fighting for people. President Obama can’t simply ask for Congress for things, and then show disappointment when it doesn’t happen, because doing only that and nothing else makes him look weak. Like strong Presidents in the past, he needs to use not just the bully pulpit but executive branch authority. The President can issue executive orders on a wide range of subjects that help the middle class, such as changing the federal government’s contracting and procurement procedures to make sure companies getting government business are giving their workers decent jobs. The Treasury Department and Federal Housing Administration can issue regulations making it far tougher for banks to foreclose on homeowners. The Justice Department can be far more aggressive in its anti-trust enforcement, and in going after banking fraud and other corporate fraud. Agency after agency can issue more regulations that push big business to treat their workers and customers and local communities right. The middle class, and those trying to make their way into it, shouldn’t have to wait until a better Congress comes along to get help from the executive branch.
The third factor is the most important, politically and substantively, which is to break the cycle of the big banks winning most of what they want from government, and especially to force them to write down mortgages for underwater homeowners. Occupy Wall Street has captured the imagination of the public simply because most people understand that the big banks on Wall Street are at the heart of the terrible economy and the dysfunctional government. In spite of the fact that the national media and the political pundits in DC. have mostly ignored housing and financial issues since the financial crisis settled down a couple of years ago, this issue is under the surface in virtually every conversation I have with people and in every focus group I have seen. When the banks blew up the economy, got bailed out, and then went on to record profits and bonuses while the rest of the economy crashed, it fundamentally broke the faith Americans had in their government. And when it seemed that both parties were in bed with Wall Street, it badly hurt Obama and the Democrats.
The issues are so big, though, that the Obama administration keeps getting more chances to prove themselves as fighters for the middle class and against the greed of the big banks. Banks European woes could easily spread here, and force dramatic action. The housing crisis continues unabated. Bank of America is teetering on the verge of bankruptcy, and may need to be restructured. The state AGs’ settlement looks like it is dead, and the administration will need to figure out how to respond now. The administration will have one opportunity after another to choose the side of homeowners and consumers in facing down the biggest banks. If they show themselves to be fighters for the middle class, they would go a long way in shaking off the bad reputation they got early in 2009 in terms of being in Wall Street’s back pocket. That would be the right thing to do economically, in fact might well be the single greatest thing they could do to help pump up the economy. And it would do more to help Obama politically than any other thing he could do.
The reason that Occupy Wall Street, a small group of inexperienced activists with no money or early institutional backing, were able to create such a big spark is because most of the country — not just progressive activists but lots of middle-America swing voters as well — knows that Wall Street is at the heart of our country’s economic problems, and that neither party has stood up to them enough. Unlike the Republican politicians who have denounced Occupy Wall Street, President Obama had the smarts to say good things about them when asked. If he now backs up those words with executive power, and puts his administration firmly on the side of homeowners and consumers and the middle class when they are being pushed around by the big banks, he will help both the real economy — and himself politically — in a major way going into 2012.