Although most polls indicate that Americans are putting the blame on Republicans for the government shutdown in terms of actual politics, the Republicans are winning. The debt ceiling is a quintessential example of the failure of leftism under both the Obama and Clinton administrations.
Obama has lost Waxman-Markey (climate change), Manchin-Toomey (gun control and the Gang of Eight (Immigration). Dodd-Frank (finance reform) has been dismantled and hasn't even begun to correct the damage wrecked by Gramm-Leach-Bliley (which repealed Glass-Steagall) and the Commodities Modernization Act (deregulating derivatives).
Obama's healthcare reform was supposed to include a public option, universal Medicaid expansion and exclude the Cadillac tax (which will hurt union workers who negotiated good healthcare plans). Ideally, of course, we would move to single-payer or socialized medicine, but this is America! We're exceptional! In 2008 Obama mocked the idea of an individual mandate: "I mean, if a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house." His agenda has been so decimated that he's literally having to pass of old moderate Republican ideas as genuine leftism, and he's still being called a commie!
Obama has been negotiating with sociopaths for the last five years. He came in ready to bargain, but has instead met a party immune to compromise. Obama has gained almost nil in revenue, while spending has been cut drastically (and foolishly). Now, he's being asked to give up his major (only?) legislative victory for absolutely nothing in return. In fact, the Democrats position right now is to beg for a "clean-CR" that would cut spending below Paul Ryan's first budget and basically to the level he proposed for 2014. That's right, the current Democratic position is to cut funding roughly to the level of what the psychotic Rand Acolyte/Republican "idea" man is asking for. Dear readers, let me restate this one more time. The Democratic position right now is to keep in place a law based around a Republican idea and cut spending below what Republicans wanted in 2010.
The Republican quest to cut spending and taxes while not actually doing anything hasn't been stalled by the fact that they lost the presidency, the senate and got fewer votes in the House than the Democrats. They've so dramatically shifted the conversation that they are still winning.
The truth is, Republicans have been winning since the 80s and haven't stopped. The Clinton/Obama domestic agenda is right of Nixon/Eisenhower. There is no left in America. Democrats would qualify as center-right in any other country, while the Republicans would constitute a fringe right-wing nationalist party that generally takes in 10% of unemployed alcoholic racists with free time to come up with crazy conspiracy theories. The Tea Party patriots would be bunkered underground prepping for a coming apocalypse. In America, they are a major national party, holding the government hostage for even more draconian spending cuts (and maybe some tax giveaways for their rich friends). As long as they keep gerrymandering districts, make sure blacks don't get to vote and take a never-compromise position, Republicans will keep winning.
The left in America needs revival, and there is certainly hope. Young people, according to Pew Research Center, actually have a slightly positive view of socialism (+3) and a slightly negative view of capitalism (-1). Poor Americans also grown disenchanted with capitalism (-8), as have blacks (-10) and hispanics (-23). There is a large untapped reserve of populist fervor that will quickly turn to disillusionment as the corporate and finance controlled neo-liberal arm of the Democratic party fails to address the issues that matter to them: environmental degradation, rampant inequality, the rise of greed and the lack of empathy in our society.
But all of this populist energy will remain under the surface as long as money drives the political system, there is no way for a leftist movement to foment - there will be no Koch-like donors supporting an anti-corporate pro-environment movement. To quote Marx: "The ruling ideas are nothing more than the ideal expression of the dominant material relationships, the dominant material relationships grasped as ideas; hence of the relationships which make the one class the ruling one, therefore, the ideas of their dominance."
Martin Giles and Larry Bartels have both done extensive research on the political system's responsiveness to poor voters. The results are not good. In 2005, Larry Bartels examined how responsive Senators were in the 101st, 102nd and 103rd congress to the preferences of various constituents. His findings are summarized in the chart below.
While neither party is particularly responsive to the needs of poor Americans (the number is negative, meaning that if poor Americans desire the policy, it's actually less likely to happen), Democrats are marginally better than Republicans at responding to the desires of the middle class. Even after controlling for political knowledge and voting behaviour, the results held, indicating that wealth, not education or political activism, is what makes politicians respond. Martin Giles has developed such research into a book, Affluence and Influence, which records similar findings.
Frederick Solt researched political responsiveness and participation internationally and found that higher levels of inequality decreased voter turnout and narrowed the political discussion, with poor and middle class voters becoming disenchanted.
The best way to revive the left is to focus on two key issues: economic equality and political access. Economic equality, while it garners lip from the left has never been the center of a real legislative agenda since the Great Society. That's because, although improving access to education and providing universal health care are all small steps towards alleviating inequality, the only way to truly make a difference would be a stronger, more vibrant union movement, an increased minimum wage and higher taxes on the wealthiest americans.
Economists Steve Temin and Peter Levy argue in Inequality and Institutions in 20th Century America that the decline in unions was an institutional phenomenon, one driven by politics, not an inevitable consequence of the changing economy. David Blanchflower and Richard B. Freeman point to Canada as a country where labor has remained strong because of favourable public policy:
Canadian labor law substantially limits what management can do to oppose unions... Canada does not permit management to engage in the massive union prevention campaigns that pervade the United States... and the two major provinces, Ontario and Quebec, have gone a long way to protect unions as institutions.
This decline in unions has been disastrous for American workers. Bruce Western and Jake Rosenfeld find that, "the decline in organized labor explains a ﬁfth to a third of the growth in inequality—an effect comparable to the growing stratiﬁcation of wages by education." There is a correlation between union representation and inequality within the U.S. and internationally.
The effort to end inequality can also be aided by higher levels of redistributionary taxes. U.S. tax rates are low by international standards and research from Thomas Piketty and Emmanuel Saez shows how progressivity has declined in the U.S. tax system.
Research suggests that tax rates have to be around 60 - 70% before there is any impact on economic growth (the highest marginal tax bracket right now is 40%). The U.S. could easily increase tax rates and distribute more money downward, thereby reducing inequality. Increasing the minimum wage would also put downward pressure on inequality and give workers more dignity.
The second aim of the left will be even tougher than alleviating inequality: getting money out of politics. The Roberts court has dealt numerous blows to the U.S. campaign finance regime and may again this year. A system of stricter campaign finance would free candidates from the demands of corporations and the financial sector. Part of the reason Democrats are wary of limiting corporate power and the influence of finance may be the fact that their campaigns are bankrolled by these donors. Powerful corporate lobby groups like ALEC, the Chamber of Commerce and the various "astroturf" groups push the domestic agenda to the right.
With a rigorous system of campaign finance reform, a reinvigorated left would actually have a chance to mobilize. This recovery has been drastically unequal: Emmanuel Saez finds that 93% of the gains over the past 2 years have accrued to the richest 1 percent of Americans. There's certainly room for a new left movement, the question is whether it will happen.