Wall Street, regulation, and liberalism’s Achilles Heel

By the numbers, the left should win most elections. For all the vaunted talk about how many people call themselves “conservatives” versus “liberals”, the fact is that there are more registered Democrats than Republicans, and the mainstream Democratic stance on almost every issue is more popular than the mainstream Republican one.

There is, of course, worry that support for the left tends to be a mile wide and an inch deep: those sentiments of good will and equality often dissipate when the other side cries about national security or raises the specter of race resentment. That’s why a lot of would-be Democratic politicians run to the right to woo “independent” voters.

But in truth, the greatest danger to the left isn’t that. After all, the demographic to whom race resentment appeals most is gradually disappearing, even as popular appetites for overseas adventures are dwindling.

Instead, the greatest challenge for the progressive agenda is that people stop believing in the power of government to curtail big corporate money. The right is making headway with the intellectually preposterous argument that the only thing wrong with Big Money is when it colludes with Big Government.

That theory can seem quite compelling to a certain kind of sophomoric libertarian mindset, and persuades a surprising number of low-information voters. It’s almost impossible to argue for a stronger regulatory framework if people start believing that regulatory agencies are doing more to help the big guy than the little guy.

That’s why stories like the cozy relationship between Goldman Sachs and its regulators are so problematic. It’s not just the fact that the foxes are in the henhouse from a policy perspective. It’s also that the entire progressive economic program comes undone if the regulators are in bed with the people they’re supposed to be regulating.

The very first job of Democrats is to ensure that when we argue for tighter controls on the power of Big Money–primarily through taxation and regulatory agencies–that we’re doing more to help regular people than to help the fat cats we’re supposed to be watching.

To this day, the incestuous relationship between Washington and Wall Street remains the most important problem for the left to solve. It’s not just a policy problem. It’s also an enormous political persuasion problem.

David Atkins

David Atkins is a writer, activist and research professional living in Santa Barbara. He is a contributor to the Washington Monthly's Political Animal and president of The Pollux Group, a qualitative research firm.