Friday, March 28, 2008

A New Deal Moment?

Wall Street is in a crisis. Home foreclosures are on the rise. The Republican presidential nominee argues that "it is not the duty of government to bail out and reward those who act irresponsibly," while the Democratic rivals for the nomination debate the best government response. Could it be that a New Deal moment is at hand in American politics?

While "Intervention Or a Bailout?" in the Times argues that both parties recognize the important role of government in solving the problems of housing and financial markets, the similarity ends there. Republicans, as William A. Niskanen of the Cato Institute observes, are likely to protect markets. Democrats are likely to protect individuals.

That's an old and defining difference between Democrats and Republicans, one that Democratic politicians rode to victory for decades after the New Deal. While it would be too much to expect a wholesale to return to the regulatory state of the New Deal, it is heartening to see that the economic issues and core ideas at play in the coming election will play to the Democrats' strengths and the Republicans' weaknesses.

Paul Krugman makes a case that Hillary Clinton's policy responses to the crisis of housing and finance are more progressive than Barack Obama's. But whatever the differences between Obama and Clinton, it looks like the Democratic nominee will run by arguing that the federal government must help ordinary Americans. John McCain will offer the typical Republican medicine of preserving free markets.

In this year's political climate, that should give Democrats a big advantage. The party of Obama and Clinton has an opportunity to do something that Democrats haven't done in a long time: make a persuasive case that their party's philosophy of government best represents the interests of ordinary Americans. If the Democrats can make this point stick, they might even be able to turn a 2008 presidential victory into a new Democratic majority.

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