Faced with a dire financial crisis and two foreign wars – not to mention a host of long-festering problems like health care, the environment, debt and de-industrialization – Obama’s choice was not an easy one.

If he took the populist route and further panicked the financial markets, the nation and the world might have plunged into a new Depression with massive unemployment.

There were also political dangers if he chose the populist path. The national news media rests almost entirely in the hands of corporate “centrists” and right-wing ideologues, who would have framed the issues in the most negative way, blaming the “radical” Obama for “wealth destroying.”

This media problem dates back a quarter century as American progressives have mostly turned a deaf ear to those calling for a major investment in media and other institutions inside the Washington Beltway, as a way to counter the dominance of the Right and the Establishment.

So, if Obama had nationalized one or more of the major banks, the stock market would likely have dived – even more than it did in early 2009. And there would have been lots of commentary about the inexperienced and inept Obama making matters worse.

He would have confronted media denunciations as a “socialist” or worse. The CNBC “free-market” crowd, led by Larry Kudlow, would have used their influential forum to rally the business sector; Fox News would have cited nationalization as proof they were right about the “communist” Obama; Washington Post editorials would have chastised him.

A new Depression might well have been pinned on Obama.

Similarly, if Obama had ordered aggressive investigations into torture and other crimes committed by George W. Bush and his administration, there would have been howls about Obama’s vindictiveness; about how his promises of bipartisanship had been lies; about coddling terrorists.

Given the tiny size and marginal influence of the progressive media, any cheers for Obama’s courage and principles would have been drowned out by the condemnations that would have bellowed forth from CNN, Fox News, the Washington Post and other powerful media voices.

In other words, the populist route would have traversed some very dangerous territory. At least superficially, the collaborationist route looked less daunting.

By continuing Bush’s policies of bailing out the banks, Obama might succeed in stabilizing the financial markets. He could reverse the collapse of the stock markets (which had wiped out trillions of dollars invested in middle-class retirements and union pension funds, as well as the paper wealth of many rich people and top executives).

By reaching out to Republicans and Democratic “centrists” on health reform – and by adding lots of tax cuts to his stimulus bill – Obama also could blunt right-wing attacks portraying him as a crazed radical. By “looking forward, not backward” on Bush’s crimes, he could show independent voters that he was serious about his campaign promises regarding bipartisanship.

By retaining Bush’s Defense Secretary Robert Gates (a Washington Establishment favorite) and by recruiting his primary opponent Hillary Clinton as Secretary of State, he could win applause from the mainstream media for his “team of rivals” and maybe win over a few influential neoconservatives who would see these hawkish appointments as continuity for Bush’s war policies.

The Triangulators

This course also would mean turning to Bill Clinton’s retreads, from John Podesta as transition chief to Rahm Emanuel for White House chief of staff. After all, the Clintonistas had defined the strategy of “triangulating” against the Democratic “base” to win a measure of approval from the Washington/New York powers-that-be.

Indeed, choosing the collaborationist route would mean replaying much of the Clinton playbook: reject calls for accountability on the outgoing Republicans; treat anyone who wants to know the full story of the GOP crimes as extreme; join in covering up Republican wrongdoing in hopes of some reciprocity; continue most of the foreign policy initiatives to avoid charges of “softness”; behave “responsibly” on domestic matters even in the face of GOP attacks and obstructionism; devise a health-reform plan that protects the interests of private insurers.

This collaborationist course could even cite repudiation of the “base” as further proof of Obama’s moderation.

Sure, these moves would anger Obama’s core supporters from 2008, but where would the “base” go? Maybe, Obama could rely on the memories of the Bush years – and warnings about a prospective Sarah Palin presidency – to keep the progressives in line.

Understandably, in December 2008, this collaborationist path looked the most inviting. With a few minor deviations, it became the one that Obama followed.

The subsequent problems were largely predictable, though compounded by some of the inexperienced President’s unforced errors.

By giving Bush;s team a pass on torture and other war crimes – even protecting them via “the state secret privilege” – Obama got no thanks from the Republicans, just as Clinton got no reciprocity for giving Ronald Reagan and George H.W. Bush a pass on Iran-Contra, Iraqgate, October Surprise and other scandals from that era. [See Robert Parry’s Secrecy & Privilege.]

Also, by turning on people who had honorably pressed for the truth about the Bush-II-era scandals – much like Clinton did to honest investigators from the Reagan-Bush-I era – Obama undercut and alienated these potential allies.

By choosing continuity over change on foreign policy, Obama – like Bill Clinton – failed to apply any real brake on the military-industrial complex which has been draining the U.S. Treasury for six decades while entangling the United States in foreign wars.

By seeking “common ground” on the economy, Obama ended up owning the bank bailout and got stuck with a watered-down stimulus that still drew nearly unanimous Republican opposition, much as the Republicans voted en bloc against Clinton’s deficit-reduction plan in 1993.

Though Obama’s modest stimulus bill appears to have helped stanch the bleeding on unemployment, GOP lawmakers and their right-wing media allies nevertheless brand it a failure and a waste of money.

Maneuvering on Health Reform

On health reform, Obama sought to avoid the pitfalls that crippled Clinton’s effort in 1993-94. However, Obama actually replicated many of Clinton’s key mistakes, albeit with a few tactical differences, such as giving Congress the lead rather than having the White House compile its own legislative package.

Substantively, Obama’s and Clinton’s approaches had many similarities. Instead of proposing a single-payer “Medicare for all” system, they sought to protect the private insurance industry while devising complicated jerry-rigged “reforms” to the system.

Because of the complexities of both reform strategies, Republicans and other opponents mocked the plans for their number of pages, while still blasting them as “socialistic government takeovers.” Then came the inevitable compromises that made the bills even more confusing and unappealing.

Clinton and Obama also made political mistakes. Clinton imposed excessive secrecy in having First Lady Hillary Clinton assemble the package behind closed doors. For his part, Obama failed to demonstrate forceful presidential leadership in guiding the legislation through Congress.

Obama allowed his initial deadlines for congressional action – before the August recess – to slip so Senate Finance Committee Chairman Max Baucus could pursue pointless negotiations with three Republicans. By the time Baucus realized that Sen. Chuck Grassley, R-Iowa, and others were playing him for a fool, the Right had built a powerful “grassroots” movement of its own to fight any reform.

Then, rather than getting angry with “centrist” Senate Democrats who held health reform hostage by threatening to join a Republican filibuster, Obama catered to them, granting concession after concession. Like any negotiation from weakness, Obama only invited more demands from more hold-outs.

The most galling case for the Democratic “base” was Obama’s capitulation to Sen. Joe Lieberman, I-Connecticut, who had been Bush’s favorite Democrat on the Iraq War and who had switched to Independent after losing a Democratic primary in 2006. He then backed Sen. John McCain for President and questioned Obama’s patriotism, before accepting a spot in the Democratic caucus this year and keeping a committee chairmanship.

For his vote on health care, Lieberman demanded that a “public option” – even one with a trigger – be dropped. Senate Democrats then replaced it with one of Lieberman’s own ideas, letting uninsured Americans 55 to 64 buy into Medicare. But Lieberman then repudiated his own plan, saying he would filibuster unless it was removed, too.

So, White House chief of staff Emanuel told the Senate leadership to surrender to Lieberman’s demands no matter how inconsistent they might be. The Obama administration also has been pandering to other “centrists,” like Sen. Ben Nelson of Nebraska, who wants strict language against women obtaining abortions through a subsidized insurance system.

Yet, while fawning over these “centrists,” Obama’s team has been following the Clinton playbook toward the “base,” reserving the only flashes of anger for progressives who complain that the giveaways have gone too far.

Clinton immortalized this classic triangulation maneuver when he ostracized an African-American hip-hop artist named Sister Souljah who was perceived as his ally.

This week, in a similar Sister Souljah moment, White House spokesman Robert Gibbs called former Democratic National Chairman Howard Dean “irrational” after Dean finally threw up his hands in disgust at the Senate’s overly compromised health bill. Instead, Dean urged Democrats to circumvent the 60 votes needed to stop a filibuster by using “reconciliation” to pass as many real reforms as possible.

As progressives hailed Dean’s rebellion, the Obama administration rolled out its big guns to pound away at its own disaffected supporters -- and demand that they get in line behind the health bill even if it has been gutted of nearly all the reforms that progressives favored.

Less-Traveled Path

While the end game for the health bill is still playing out, the result does not look promising for Obama.

After making health reform his top domestic priority – and finding no bipartisanship – Obama holds out as his best hope that he will sign a bastardized piece of legislation that will force tens of millions of Americans to sign up for private insurance that they may not want or can’t afford.

Even if there is such a signing ceremony, Obama has managed to demoralize and alienate his “base.” He’s compounded that problem with the perception that he has catered to the big banks on their bailouts and pandered to neoconservatives by escalating the war in Afghanistan and inserting Bush-like arguments in his Nobel Peace Prize speech.

After all the compromising and concessions, Obama and the Democrats are now looking at disaster in the congressional races for 2010. The millions of voters who were inspired by Obama’s call for change in 2008 are disillusioned if not embittered. Many are likely to stay home next fall.

By contrast, the Republicans are brimming with confidence. They’re sure they can blame all the nation’s problems on Obama and ride the wave of right-wing enthusiasm to a victory reminiscent of 1994 when the Democrats were routed from the House and Senate, leaving Clinton to struggle on trying to stay “relevant” and avoid impeachment.

In retrospect, the more challenging path at last year’s crossroads might have been the politically preferable one after all. While it would have upset the Washington/New York apple cart, Obama could have pinned the blame for America’s ills on the Republicans and tied them to the lobbyists and bankers.

Even in the face of economic troubles, he might have kept the excitement alive among his supporters and put public pressure on Congress to enact meaningful reforms. If the Republicans still obstructed, he could have turned his rhetorical skills against them and pressed for bigger Democratic majorities in 2010.

But Obama is not the only one to blame for not taking the path less traveled a year ago. Most well-to-do progressives continue to keep their wallets closed when it comes to building the kind of small-d democratic media-political infrastructure that is needed inside the Washington Beltway.

By failing to do the hard work of building institutions, the progressive community has largely sidelined itself, sitting in the stands and booing the players on the field. In other words, much needs to be done – and not just by Obama – to set the United States on a different course.

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project Truth' are also available there. Or go to Amazon.com.

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