Is America in the grip of a right-wing backlash that will hit the November elections like a hurricane? This narrative is gathering steam. It is fed not only by the minority partisan right-wing media but also its majority "liberal" counterpart, which loves a horse race and is fascinated with the Tea Party, even if it isn't so eager for the Republicans to take Congress. Regardless of the outcome, 90+ percent of the pundits and press will cheese up the same, tired, old cliché in their post-election analysis: the Democrats were punished (they will inevitably lose at least some seats in Congress) because they tried to go too far, too fast, and too left for the inherently conservative American masses. And this junk will be consumed for years, adding another layer of fat to the lazy couch potato that is American journalism's "conventional wisdom."
How about another narrative that makes more sense? Let's start with the economic issues, since the economy was the number one issue for likely voters in the latest New York Times/CBS poll. Our worst and longest recession since the Great Depression was caused by a real estate bubble that accumulated and burst before Obama was elected. The Democrats passed a stimulus package that was much too small to compensate for the resulting loss of private spending. As my colleague Dean Baker has pointed out, the collapse of this bubble would be expected to knock about $1.2 trillion annually off of private demand. This is about eight times the size of government stimulus spending when we subtract the budget cuts and tax increases of state and local governments (special thanks to the Republicans for cutting $100 billion from the stimulus bill that would have gone straight to municipal governments to prevent some of this).
Now how does this get presented in the media? First, we have a debate about whether the stimulus helped or hurt the economy, or whether it created or saved any jobs at all. This is somewhat ridiculous, from the standpoint of national income accounting. It is reminiscent of the "debates" that carried on in the media for many years (they continue in some quarters), long after the question was settled in the scientific community, as to whether global warming was taking place. The non-partisan Congressional Budget Office estimates that between 1.4 and 3.3 million more people were employed by mid-2010, as a result of the stimulus. There is a wide range of uncertainty about the size of the effect, but there's hardly any doubt that the stimulus helped save jobs and output.
Then the horror movie scenes began about the dreaded budget deficit which, over the next decade, is almost entirely attributable to two non-stimulus-related items: Iraq and Afghanistan war spending and the Bush tax cuts. In spite of this well-financed campaign against the scourge of red ink, only 3 percent of voters see the deficit as the most important issue facing the country, as compared to 32 percent who chose the economy and 28 percent for jobs. But somehow the deficit got to be so alarming to somebody that it became politically impossible for Congress to even talk about another stimulus for the economy. So very predictably, the recovery lost steam and the Democrats felt just "powerless" to do anything to boost the economy and employment before the election. This guaranteed big losses for their party in the election.
It didn't help that the Obama administration failed to create a distinction for voters between the $700 billion bailout for the banks, which was widely hated for obvious reasons, and their stimulus package. Most Americans still don't see a difference. This was a huge public relations failure.
But all this adds up to something different from a "right-wing backlash." Indeed, the CBS/New York Times poll shows a 20 percent approval rating for Congressional Republicans (the same as for the Tea Party) as opposed to 30 percent for Democrats.
But 55 percent of voters – a record for the past 20 years – say it is time to give a new person a chance to represent their district.
The conclusion is obvious: voters are angry – not the anger of the rich who believe, as John D. Rockefeller famously said, that "God gave me my money." It is a populist rage that will drive some independent or swing voters to vote against incumbents and the incumbent party. Even if it means voting for people who they don't particularly like, trust, or agree with on the issues.
Republicans were able to keep this country moving to the right for nearly four decades – including through the Clinton years. For much of this time they used a fake populist appeal based on cultural issues, portraying a "liberal elite" who was contemptuous of the values of working-class white voters – who have generally been the biggest group of swing voters. The strategy succeeded because Democrats refused to make the obvious economic populist appeal to the real interests of these voters – who were getting hammered by the loss of manufacturing jobs, weakening of labor and redistribution of income that was engineered by the leadership of both parties. In 2004, non-college-educated whites with household income between $30,000-$50,000 voted for Republicans for Congress by a 60-38 percent margin; in 2006 a switch to a 50-50 split (22 percentage points) contributed significantly to the Democrats' victory in Congress.
The Republicans' long-term strategy collapsed in 2008. The Democrats were lucky in that the peak of the financial crisis hit just before the elections that year. In October 2008 the number of Americans believing that the country was on the wrong track hit an all-time record of 89 percent. Most importantly, this situation focused the attention of swing voters on the economy, something that negates the potential appeal of "distraction" issues such as abortion, gay marriage, guns or even the thinly-veiled racism that had been part of the Republicans' appeal since President Nixon's post-civil-rights-movement "southern strategy." Obama himself had eschewed economic populism in his campaign (making an exception in Midwestern primaries such as Wisconsin where he needed more working-class support in order to win), in keeping with his carefully cultivated media image of post-partisan conciliator. But the economy did the job for him, and for the Democratic party.
What does this mean for the elections of 2010? I would predict that Democrats – even in some not-so-Democratic districts – who appeal to the massive populist discontent among the voters will do better than those who follow the conventional wisdom and run to the right of Obama on such issues as health care reform or taxes. This applies especially to the swing voters but could also be significant in rallying the party's base, which is somewhat disillusioned and needs to be energized. Since this is a non-presidential-year election, voter turnout could easily swing the election.
It is not so hard to make this appeal: millions of people are losing their homes and their jobs, while the Wall Street gang who sank the economy are once again raking in billions — and only because they have been rescued and subsidized with hundred of billions of our taxpayer dollars. If enough Democrats campaign on these kinds of themes and offer a populist alternative, they will keep both houses of Congress.