The Democratic Primary Is A Fight Over Wall Street And Obama's Legacy

It's a deeply emotional problem for Democrats.

WASHINGTON -- If you want to understand the real meaning of Thursday night's debate between Democratic presidential candidates Hillary Clinton and Bernie Sanders -- or the increasingly ugly feud between their supporters -- you have to go back to President Barack Obama's election in 2008.

Obama's triumph brought together every wing of the Democratic Party and inspired a generation of young voters: idealists who wanted a complete break from the Bush years, centrists who were angry about the Iraq War, radicals who wanted to reshape the financial system, bankers who concluded Obama would get the economy back on track, and many, many more. Each faction projected its own worldview onto Obama, believing he would pursue their own particular vision of the future.

That was impossible. And so, committed Democrats have been fighting about Obama ever since he entered office. The meaning of his presidency and what it could have been are not simply topics of academic debate -- they cut right to the emotional core of why many people got involved in Democratic Party politics, and why they identify as Democrats at all.

Obama will probably be remembered by historians as a liberal champion. In the face of a hardline conservative opposition fueled by often-transparent racism, he expanded access to health care, implemented Wall Street reforms and rescued the economy from almost total collapse. It is this vision of Obama that Clinton is tying her own image to, attempting to present Sanders as a traitor to the cause.

But if Obama is remembered as a consummate progressive, it will be because he delivered corporate America's final conquest over the Democratic Party, and in doing so, enabled future historians to erase the party's anti-corporate wing from the narrative.

Obama began his presidency by essentially telling movement progressives to shut up and quit making trouble for his corporate-friendly agenda. Former Obama spokesman Robert Gibbs derided and insulted "the professional left" in press conferences. When liberal organizations advocated for a public option during Obamacare talks, former White House Chief Of Staff Rahm Emanuel pressured them to stop by threatening their funding sources. Obama economic adviser Christina Romer was sidelined after demonstrating that the economic stimulus package needed to be much larger than what National Economic Council Chair Larry Summers would accept. Obama has deported more people than any other president -- nearly 25 percent more than even President George W. Bush. He supported Medicare and Social Security cuts for years.

While it's true that he faced scorched-earth opposition from Republicans, it was Obama who pressed for an entitlement-slashing "Grand Bargain" during the nearly catastrophic debt ceiling talks of 2011. This maneuvering on critical support for the elderly is what prompted Sanders in 2011 to advocate for a primary challenger to Obama -- a comment Clinton is now wielding against him as evidence of supposed liberal apostasy.

"I think there are millions of Americans who are deeply disappointed in the president, who believe that, with regard to Social Security and a number of other issues, he said one thing as a candidate and is doing something very much else as a president," Sanders said in 2011.

At the time, Sanders didn't come out and say Obama should be replaced -- only that the prospect of another candidate could hold his feet to the fire.

At first, that's how many political experts viewed Sanders' challenge to Clinton. When she publicly opposed Obama's Trans-Pacific Partnership trade pact -- one of the biggest foreign policy goals of his administration -- it was a clear victory for the liberal wing of the party. Corporate executives love TPP; labor unions do not.

But then Sanders kept campaigning. He raised huge amounts of money from small donors and won a massive victory in the New Hampshire primary. Clinton maintains a wide lead over Sanders among black voters, and her debate performance Thursday night included an unsubtle effort to maintain that margin by hailing Obama's achievements.

After several skirmishes, Sanders eventually dismissed Clinton's charges about his stance on Obama by pointing out that she had not always looked so fondly on the current president herself.

"One of us ran against Barack Obama," Sanders said, invoking the 2008 race. "I was not that candidate."

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Now that the South Carolina primary is looming on the calendar, Sanders could have referenced the Clintons' embarrassing, race-baiting tactics from eight years ago. He didn't.

And because Sanders is uncomfortable on foreign policy, he also largely ignored a very well-documented dark side to the Obama years that many early Obama enthusiasts have since criticized. Former Attorney General Eric Holder publicly argued for the extrajudicial assassination of American citizens. A few weeks after Obama announced that the war in Afghanistan would not end on his watch, U.S. forces bombed a Doctors Without Borders hospital in Kunduz. Obama has a kill list. 

But Sanders was less shy about Wall Street. Voters, Clinton suggested, don't have to worry that big banks can influence politicians like herself with huge campaign contributions. After all, she argued, Obama got a lot of money from the financial industry, and he still signed the Dodd-Frank Act.

Sanders wasn't impressed.

"No Wall Street executive has been prosecuted," he noted.

And it is indeed on Wall Street where Obama's liberal bona fides are weakest. Obama hasn't even bothered to spend tens of billions of dollars that Congress allotted to him for foreclosure relief. His refusal to tackle the housing problem made the Great Recession longer and more severe. Holder failed to prosecute the widespread fraud at the heart of the 2008 collapse -- or even to pursue the myriad infractions that regulators revealed in subsequent activity. When she was a federal prosecutor, Loretta Lynch didn't bring a single case -- not even a fine -- against any HSBC employee after she forced the firm to settle for allegedly laundering billions of dollars drug money. She ignored clear evidence of what proved to be a massive tax evasion scandal at the company in the process. Obama still named her Holder's successor.

People forget that Obama hired Bill Daley, a former JPMorgan Chase vice president who had lobbied the White House against creating the Consumer Financial Protection Bureau, to serve as his chief of staff. The agency, which was the brainchild of Sen. Elizabeth Warren (D-Mass.), ultimately survived Daley's entreaties, but he was a bank-friendly voice in Obama's ear for much of his first term.

Daley now works for a Swiss hedge fund, and other top Obama advisers have a tendency to land jobs with decidedly illiberal corporations. Gibbs is now the top flack for McDonald's. His successor, Jay Carney, now smears New York Times reporters on behalf of Amazon. Peter Orszag, Obama's former Office of Management and Budget director, decamped to Citigroup and began writing op-eds defending the Bush tax cuts for the rich. Summers left to work for Citi and the hedge fund D.E. Shaw & Co. Obama adviser David Plouffe took a job at Uber a few months before its senior vice president boasted about a plan to spend "a million dollars" digging up personal dirt on journalists who criticized the company. Former Treasury Secretary Tim Geithner is now a private equity kingpin. Emanuel didn't return to investment banking after leaving the White House, but his disgraceful handling of the Laquan McDonald police shooting in Chicago has made him a political pariah. 

None of this means that Obama has been a bad president. But it has long been clear which faction won out among Obama's early supporters: the corporate faction.

For many Obama enthusiasts, this can be overlooked. The Affordable Care Act made imperfect deals with insurance companies and pharmaceutical firms, but it did ultimately expand health care access. Obama went easy on banks, but he did pass some good new regulations. The overwhelming majority of economic gains under Obama have gone to the top 1 percent, but at least the unemployment rate is back under control.

When Clinton challenges Sanders on the Obama legacy, she is, of course, making an identity politics play for black voters. But she's also making an implicit argument about the centrality of corporate elites and corporate favors to the very idea of progressive politics. Sanders' entire campaign is built on the rejection of that idea. And Democrats haven't decided which vision they prefer.

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