Dear Democrats: reform or perish

“At this defining moment, change has come to America”, declared Barack Obama upon winning the presidency in 2008. And the truth is it should have been a defining moment, and change should’ve come to America. But the fact is it wasn’t, and it didn’t. 

The 2008 Financial Crisis caused an economic downturn not seen since the 1930s. Financial deregulation had been the order of the day since the 1980s; US governments from Reagan to Clinton began recklessly repealing the regulatory legislation imposed by President Roosevelt following the Great Depression. As Glass-Steagall was scrapped, investment banks could now engage in high-risk transactions using working people’s money. Meanwhile, the economy grew more and more financialised, with Wall Street putting bets on whether a family would default on their mortgage. 

Of course, inequality skyrocketed, concentrating wealth within 0.1% of the American population whilst starving the bottom 90%. Not that anyone cared. The dotcom crash of the early 2000s should’ve served as a warning to politicians that bankers could not be trusted to run the economy. Still, no one listened. Only on 15th September 2008, when the financial giant Lehman Brothers declared bankruptcy, did the establishment finally begin to grasp the effects of decades of irresponsible and negligent financial ‘freedom’.

Enter a skinny young Black guy from Chicago with an unusual name, promising to rid Washington of the special interests that had hitherto plagued it; swearing to keep Wall Street’s elite on a tight leash; pledging to make another Great Recession near impossible. Boy, did he underdeliver. Despite having vowed that bankers would not fill his White House, President Obama proceeded to do just that. Among others, his Chief Economic Adviser had made $5 million managing a hedge fund, and his Chief of Staff had made $16 million as a partner at an investment firm, both profiting from the very financial instruments that sent tens of millions into unemployment in the first place. 

And then came the administration’s 2010 Dodd-Frank act, a pathetic excuse for financial reform, to which firms adapted quickly. Not to mention the slap-on-the-wrist fine banks like Goldman Sachs received for the mass destitution they knowingly caused. Bear in mind, all of this followed the $700 billion taxpayers’ back-room-deal bailout the criminal banks received (orchestrated by the Democrats as much as the Republicans); money that went straight to the pockets of bank executives. As an average American, how would you feel if you had worked flat-out for years, only to lose your job and savings due to the actions of a privileged few, whose backs were then scratched with the money you had paid in tax? And how would you feel when a guy promising to change things comes along and does the exact opposite?  

Nothing has changed since 2008. In fact, things have gotten worse. Economic inequality is at outrageously unprecedented levels. This is the backdrop to Trump’s 2016 victory: just like Obama, a guy claiming to be a reformist outsider who then underdelivered. The American people have now rejected Trump. But don’t get carried away…

The US is in the midst of its worst public health and economic crisis in nearly a century, a situation exacerbated by the president’s inertia towards the pandemic. Democrats were handed this election on a silver platter, but only pulled off a razor-thin victory, making significant losses in the House, with the Senate still in the balance. It’s embarrassing. For those who say a centrist grandad was the ‘safe choice’, the results don’t seem very ‘safe’ at all. And for those neoliberal centrist Democrats who are pathetically blaming the left-wing of the party for losing their seats, perhaps they should look in the mirror and realise their economic policies only benefit a privileged few. 

We have not had a financial crisis since 2008, but the Minsky cycle of boom and bust continues. It will happen again and meanwhile, whilst the Democrats pretend to be the voice of minority America, when someone like Bernie Sanders gets mass support for actually challenging the economic structures that prevent most disadvantaged people from making their way in the world, they throw the weight of the party establishment to crush them. 

It’s time to throw out the old guard and bring in the wing of the party proposing real solutions to the issues we face: A $15/h minimum wage, the Green New Deal, universal healthcare, a corporate tax hike and breakup of market monopolies. It’s by adopting these policies that the Democrats will win back the broad coalition that Obama built in 2008. The moral arc of the universe that Dr King referred to will not simply bend towards justice on its own. We need to make it so. 

Image: Barack Obama via Flickr