The sense of hope that swept in with President Obama has been supplanted by existential doubt: Can the nation ever address its critical structural crises in health care, financial services, energy, and education?
Governmental gridlock has frozen us while many of our competitors—most notably the BRIC nations—eat our lunch. The notion is gaining traction that our system of government cannot confront tough issues and that other, more autocratic nations will be better-suited to the nimble shifts in policy that are needed to maintain a competitive position in the world. As Tom Friedman has said, "We need to be China for a day." Who's to blame for this mess? One theory that has some merit and current appeal is that legislatures—which by their very nature and structure are designed to protect the status quo—are responsible. Legislators get re-elected in their gerrymandered districts by appealing to the current establishment. Transformative policies do not have a broad enough base of appeal to sweep away local ossifying forces.
While it is true that legislatures generally are quicksand to transformative ideas, it is now also the case that within the Congress, the Republican Party has become the party of nihilistic opposition to any proposal for reform. The GOP does this partly by smartly exploiting the rules of the Senate but mostly by being much better at telling stories, narratives that through their simplicity appeal to the public.
Their principle narrative—the small-business owner creating jobs, government as interfering, destructive force—has dominated the past 30 years. After the economic cataclysm of the last two years, you might think that selling this narrative would have gotten tougher. But somehow the Republicans are still the masters at telling a story that grips the public psyche.
Exhibit one is health care reform, which fell prey to stories of "death panels" and demands by Medicare recipients to "get government out of my health care." The Republicans successfully exploited the public's disdain for government—even though it is government itself that is providing the Medicare they so prize.
Nobody is better at the use and mastery of this language than Frank Luntz, who helped script the demise of health care and has now told Republicans how to end financial services reform. Luntz has a new memo—"The Language of Financial Reform" (scroll down to see a PDF of the full memo text)—to manage the death-paneling of financial reform. In the memo, Luntz is effectively advising them how to use language of change and reform while stymieing every meaningful structural shift.
The clear political imperative of the memo is simultaneously to appear to be empathetic to the victims of the economic crisis and pro-reform while fundamentally opposing any change that might harm major financial institutions seeking Republican support. The political strategy is to turn government bureaucrats and low-income borrowers into the blameworthy parties.
Luntz's advice and language are simple: focus on what he calls "words that work." "Bad decisions and harmful policies by Washington bureaucrats" created the crisis; "Taxpayer bailouts reward bad behavior." "We don't need another federal government agency." "The architects of failure are now designing the rescue." "[T]he Financial Reform Bill and the creation of the CFPA makes it harder to be a small-business owner …"
In the face of this language, Democratic support for the critical elements of reform—implementation of the Volcker Rule, creation of a specific consumer protection agency, overhaul of the market for derivatives, and establishment of appropriate capital and leverage ratios—is crumbling.
There is a strong temptation for Democrats to sulk about the distortions of the other side and crawl off in self-pity at the public's failure to grasp the critical arguments we are making. That would be useless, but all too typical.
What we need, in the alternative, is a full-throated response to Luntz from the Oval Office. Here are a few off-the-cuff suggestions for phrases Democrats can use to regain the momentum:
- It is time to get the cops back on the beat and the bank robbers out of the bank vault. It is your money—not theirs.
- "Heads I win; tails you lose" is a first-grade joke—not a theory for our banking system. Yet that is the game that has been played on us.
- If Wall Street wants to gamble on a casino economy, they will not use the American taxpayer as a chip on the table.
- For the first 50 years after the Great Depression, we avoided disaster—but then Washington bought the oldest line in the book from Wall Street bankers—trust me. We have learned the lesson—and we don't, and we won't.
A counternarrative has to be told: A market needs rules, and those who play by the rules must be protected from those who do not. The Republican rhetoric must be called out for what it is: a defense of the very institutions that caused the crisis and a mere continuation of the "Party of No" ideology that has prevented us from moving forward. The public anger that has so far been channeled by Sarah Palin and Scott Brown must be redirected in favor of the necessary structural shifts.
This is the moment for the president to establish that he is, in fact, the great communicator we saw during the campaign. The alternative is to let the sense of foreboding that is sliding across the nation metastasize into something far worse—a sense of defeat and cynicism, a sense that another decade of stagnation will leave us dangerously at the precipice.