There are two things that are sucking all the life out of that surge of hope so many people felt when Obama came to office. The first is the perception that, early on, Obama chose to help rescue the big banks but has been more passive when it comes to creating new jobs for people, a perception which, while unfair in some regards, is reinforced by record profits and bonuses last year for the big banks we rescued while unemployment is stuck around 10%.
The second is that the legislative process always seems like it follows the same depressing pattern: Obama proposes a legislative package that makes some concessions to industry but is pretty decent legislation overall; the House then makes some other concessions to industry and passes a more compromised version of what Obama had laid out; the Senate then gets stuck for a very long time and then tries to break the logjam by making massive compromises to industry lobbyists, but even that doesn't seem to get the deal done. Everyone who ever cared about the issue and making real change gets depressed. Rinse and repeat.
Unfortunately, both of those problems in terms of dousing any excitement level about the Obama agenda are coming to a head on financial reform. Both the general public and the progressive base of the Democratic Party feel like the big banks have already gotten way too much help and now Chris Dodd comes out with a financial reform bill that seems to have given a huge amount away to the big bank lobbyists. As Simon Johnson put it:
The lobbyists did their job a long time ago. Treasury sent up a weak set of proposals Secretary Geithner apparently felt that to do otherwise would be just to seek punishment for past wrongdoings; there is too little concern at the top levels of this administration regarding what comes next. And Senator Dodd was pushed hard by various interests to weaken all potentially sensible proposals including anything that would bring greater transparency and safety to the derivatives market.
But of course even all the bad ideas Dodd put in his bill to please the big banks didn't actually win over a single Republican vote, just as all of Max Baucus gifts to health industry didn't deliver any Republican floor votes for the health reform bill. Now when you start to look at the details of Dodd's bill, just like with the health care bill, you will find some very good things to like, enough that a great consumer advocate like Elizabeth Warren decided to give it some modest support. Here's the problem though: if you are trying to get people excited about your reform agenda, and they are too busy debating with themselves over whether to even support the bill, you have a big, big political problem.
What it feels like is that you are breaking faith with the people who put you in office. Coming out with this kind of highly compromised bill on your single best issue for the fall elections is how you tick off both your base and angry independents at the same time. This is how Democrats will get themselves destroyed in the 2010 elections.
The Democratic Party needs to pick a fight, draw a line in the sand, and dare the Republicans to filibuster. This issue is the one to do it on, and right now is the time to do it. Lets debate whether the Federal Reserve should get a lot of new power. Lets debate whether to start breaking the big banks up. Let the Republicans be on the other side of those issues (and let the Democrats who are friends with the big bankers join them if they want). The Democrats need to have a full-scale fight on these issues, for the sake of their electoral fortunes in the fall, and the sake of their souls.