E Pluribus, Unum

Four years ago, Barack Obama burst upon the national stage with an inspirational address, decrying those who would seek to divide the nation. "There's not a black America and white America and Latino America and Asian America," he thundered, "there's the United States of America."

Yesterday, an embattled Obama articulated a far more realistic vision of the role race plays in our society. He acknowledged that there is indeed a black America and a white America. That a racial divide runs so deeply through our nation that we fail to credit or understand each other's grievances. That anger on either side of that divide is so real, and so profound, as to have produced a racial stalemate.

And yet, precisely because of that dour realism, this second speech was far more compelling than Obama's debut. To understand that apparent paradox, it's worth considering what Obama actually said about the state of race in America.

First, let's sketch the broad contours of the debate into which he was inserting himself. There are those on the left who contend that race is chimerical, a tool used by elites to divide the working classes. On the right, culture has largely supplanted genetics as the explanation of choice for racial disparities, in either case, rendering the problem all-but-intractable and absolving society of blame. And, as Obama himself pointed out, in the broad American center silence has been the rule - resentments fester just below the surface, but are rarely voiced in public. Into that void stepped the junior senator from Illinois.

As is his wont, Obama drew upon the most compelling elements of each of these visions, without succumbing to their excesses. He echoed the classic leftist critique of political and business leaders who exploit racial divisions to distract "attention from the real culprits of the middle class squeeze." And he affirmed the right's insistence on the danger of "becoming victims of our past" and the need for "taking full responsibility for our own lives."

Then he went a step further. "Trinity," Obama said "embodies the black community" in all its richness and all its shortcomings, and he is as much a part of that community as it is of him. And buried in that is a radical claim about the nature of America. By speaking of the joys of communal life and the strength he draws from his Christian faith, Obama was making the case for the importance of the particular amidst the universal. That's why he chose to read aloud from his memoir a passage describing his sudden epiphany that Trinity was built upon a foundation of collective experience. That much, one suspects, Reverend Wright would have applauded.

But Obama was not finished: "Our trials and triumphs became at once unique and universal, black and more than black." There, in a single sentence, is the essence of Obama's insight. Our identity as Americans neither elides nor erases our other affiliations. Quite the contrary. It is our strong grounding in our own particular communities and traditions that allows us to unite around our shared American values. That's why the young community organizer on Chicago's South Side struggled to connect with his audience until he found a church of his own - a particular community to ground him, and to allow him to reach for the universal. It's why communities of faith and of ethnicity, of shared values and activities, have always formed the basis of our vibrant civic life. When Obama speaks of "binding our particular grievances...to the larger aspirations of all Americans," he's simultaneously arguing for the importance of particular identities, which provide the basis for mobilization, and for the primacy of shared national goals. We are a United States of America because, instead of simply denying or suppressing our differences, we choose to build upon our unique identities in the pursuit of a more perfect union. E pluribus - out of the particular - Unum - we construct the singular.

And that's the second key insight that Obama offers. Differences need not be divisive. They can provide the basis for cooperation as readily as the grounds for animosity. In fact, Obama may be uniquely positioned to make this argument, born into a family "of every race and every hue." He reminds us that our separate communities blur at the edges, that they are fluid things, that they overlap and intermingle. That if we choose, our tragic racial history can at last be consigned to the past. That America is not static. That "our America can change. That is true genius of this nation."

It is, in the end, a subtle shift - but no less profound for that. If four years ago, Obama asked us to subsume our particular identities in the furtherance of collective goals, yesterday, he called upon us to harness our particular needs in the service of national aims. A call to unity that asks us to draw upon our separate identities is far more likely to provide a lasting basis for cooperation than one which relies upon our forgetting our differences. With his speech in Philadelphia, Obama finally offered a vision of unity that was sufficiently mature and sophisticated to be more than inspirational - it was convincing.

Crazy Like an Uncle

Fox News ran a typically sensationalistic report last night on the Reverend Dr. Jeremiah A. Wright, Jr, retiring pastor of Obama's own Trinity United Church of Christ. The ostensible news hook for the story was a sermon delivered by Wright on January 13, which the network suggested may have violated the church's tax exempt status. Let's get that out of the way up-front. Wright never uttered the magic words "endorse" or "vote," which would have been clear violations. If discussing the candidates were grounds for the revocation of nonprofit status, whatever the rules may technically say, then the IRS would first have to clear a substantial backlog, revoking the 501(c)(3) status of thousands of other churches before it got to Trinity.

But the real news in the report was an incendiary clip of the Reverend Wright in high dudgeon, framing the election in starkly racial terms. "Jesus was a poor black man who lived in a country, and who lived in a culture that was controlled by rich white people," he says. Perhaps enough to raise some eyebrows, but pretty much par for the course at Trinity. What followed was not. "It just came to me within the past few weeks, y'all, why so many folks are hating on Barack Obama." Unlike Hillary and Rudy, he says, Obama doesn't fit the mold of elites. Hillary has never experienced racial discrimination, he argues, and can not know what that's like. "Hillary ain't never been called a Nigger!" he shouts. "Hillary ain't never had her own people say she wasn't white enough." It's not in the clip I link to above, but Fox reports he even took a direct shot at Bill Clinton: "Hillary is married to Bill, and Bill has been good to us. No he ain’t! Bill did us, just like he did Monica Lewinsky. He was riding dirty."

First, let's be clear about what's being said. Wright is targeting those in the black community who were inclined to support Hillary. The sermon was delivered less than a week after Obama's loss in New Hampshire, but well before the Illinois primary, and his frustration is almost palpable. His argument, such as it is, is that Obama (like Jesus) knows what it is to live in a society that turns its back on him and his kind. That Hillary cannot know that. That there is no reason for blacks to feel indebted to the Clintons. And so, at least by implication, that it is incumbent on black people to support Obama and not Hillary.

I understand the man's point, but the fact remains - this is every bit as divisive and polarizing an argument as that advanced by Geraldine Ferraro. If it is wrong to suggest that gender alone entitles a candidate to votes, that the experience of being a woman in a man's world is uniquely difficult - then it is also wrong to suggest race play a similar role. Wrong, polarizing, and ultimately self-defeating.

Indeed, Obama's campaign was quick to recognize that these remarks were beyond the pale. Campaign spokesman Bill Burton issued this response:

Senator Obama has said repeatedly that personal attacks such as this have no place in this campaign or our politics, whether they’re offered from a platform at a rally or the pulpit of a church. Senator Obama does not think of the pastor of his church in political terms. Like a member of his family, there are things he says with which Senator Obama deeply disagrees.

That, I'm afraid, isn't going to cut it this time. Obama may not think of Wright in political terms, but it's quite clear that the converse is not so.

It's worth exploring the relationship between Obama and his pastor in somewhat greater depth. Here's Senator Obama, in perhaps his most affecting explanation of that relationship:

It is true that my Pastor, Jeremiah Wright, who will be retiring this month, is
somebody who on occasion can say controversial things....It is also true that he
comes out of the 60s; he is an older man. That is where he cut his teeth. That
he has historically been interested in the African roots of the African American
experience...
He is like an old uncle who sometimes will say things that I
don't agree with. And I suspect there are some of the people in this room who
have heard relatives say some things that they don't agree with...
And as I
said that last point I would make is that you know my Pastor is going to be
retiring over the next month. So my general view, and the reason that I raise
this, this is always a sensitive point, what you don't want to do is distance
yourself or kick somebody away, because you are now running for President and
you are worried about perceptions, particularly when someone is basically
winding down their life and their career.

I find myself empathizing with Obama, and admiring his instincts. He doesn't want to denounce a man who played a crucial role in his own life, who was a friend and a mentor when he needed one, just because it's now expedient to do so. He understands that Rev. Wright hails from a different generation (what, in another context, he labeled the Moses Generation) and Obama's entire candidacy is premised on the notion that that generation's day has passed, that it is now time for the next generation to take the reins of leadership, to transcend the divisiveness of earlier battles, to move us forward to a better future without neglecting the sacrifices of the past. I'm even sympathetic to the problem of a controversial spiritual leader. Who among us attends religious services with regularity, and hasn't squirmed in the pew from time to time, as the pastor or preacher or reverend or rabbi gives voice to a thought with which we adamantly disagree? Perhaps even a thought that is politicized or prejudiced? Or hasn't had an elderly relative do the same?

That's why I've always moved the scurrilous, conspiratorial e-mails to the trash bin on my computer. I was content to know that Obama was attracted to Reverend Wright and his church for the "cultural community" that they embodied; for their recognition that not just material interests, but also "hopes and dreams and...ideals and...values" motivate actions; and yes, for their Christian faith. If there's a single theme to Obama's intellectual achievements, it's been his ability to sieze upon powerful words and themes, lifting them out of their original context and reframing them to be inclusive and uplifting. Thus, Rev. Wright's fiery sermon on "The Audacity to Hope" in a racialized world becomes the title of Obama's serene meditation on the possibilities of transcending political and racial polarization. That seems to hold true more broadly. It's how Obama is able to credit the honorable motives of his opponents even as he disagrees with them. It's how Obama took the best of what Reverend Wright had to offer - community, inspiration, rebukes for his congregation's shortcomings - and set aside the anger and divisiveness that seemed to him relics of an earlier time.

The problem is that, with just weeks to go before he stepped down and removed himself as an ongoing issue, Reverend Wright crossed the line. Obama was succesful in his efforts to distance himself from Wright's opinions on myriad other subjects; he simply said he disagreed. That won't work for Wright's opinions on Obama. If these sorts of attacks have no place in our political dialogue, then a generic denial by a campaign spokesman isn't going to cut it. Obama himself will need to forcefully and clearly reject the logic of Wright's claims, the tone of his remarks, and the words that he used. Then he has to take the most painful step - he needs to distance himself from Wright.

There's a lot of glee on these boards this morning regarding the Ferraro debacle. I don't share it. Ferraro has left us weaker, as a party and as a nation. "I don’t think identity politics has served the Democratic Party well. I think it’s been an enormous distraction," Obama said in response to her comments. As usual, the man had the right words for the occasion. But now that one of those closest to him has made statements that are at least as divisive and egregious, he needs to find similarly powerful words to express his rejection of those statements.

It's not that the Clinton campaign, or for that matter, conservatives or the media, have gotten in his head, or that Obama's too weak, or that he needs to prove his manhood. Not every incendiary remark made by a supporter is a test of a candidate's ability to withstand attacks, to hit back, to give as good as he gets. Sometimes, those remarks are a test of what the candidate believes, and of the ideas he's prepared to embrace, even implicitly, in his pursuit of power. It's a test Clinton failed with Ferraro. And without denouncing these remarks, Obama fails it twice. He loses on a tactical level, because a campaign that splits along racial and gender lines is a campaign he loses. And he loses on an ideological level, because he has devoted his political life to convincing Americans that those divisions are less important than the things we share in common.

This one's not going away until Obama puts it to rest. So, Senator, what do you have to say?

It's the Economy, Stupid

I think it's fair to say that, as of this morning, economic concerns have fully and firmly eclipsed other issues in the presidential race. We're likely already in recession; the Federal Reserve is taking unprecedented steps to bail-out the financial markets; consumers are reeling from higher prices; and this may only be the tip of the iceberg. But you wouldn't know it to listen to our presidential candidates, who have remained resolutely oblivious to the nature or extent of the present crisis. For the most part, they continue to recite the poll-tested bromides that have dominated economic policy discussions on the left for much of the past decade. When they turn to the economy, the candidates compete to denounce free-trade pacts and decry excessive corporate pay. It's tough to believe that they're changing the minds of uncomitted voters that way. If the Democrats are going to prevail in November, they need to explain to voters how the Republican Party managed to derail the world's most powerful economy - and then they need to convince them that Democrats have a plan to get it back on track. But even a cursory review of the rhetoric on the trail reveals how poorly the candidates have performed at that essential task.

Let's start with Obama. A speech he delivered last month in Wisconsin lays out his approach in a fair amount of detail. It begins promisingly enough by assigning responsibility for the present disastrous state of affairs in clear and direct language:

We are not standing on the brink of recession due to forces beyond our control.
The fallout from the housing crisis that's cost jobs and wiped out savings was
not an inevitable part of the business cycle. It was a failure of leadership and
imagination in Washington - the culmination of decades of decisions that were
made or put off without regard to the realities of a global economy and the
growing inequality it's produced.

But what are those decisions? Obama simply recites the standard litany of Democratic complaints: tax cuts, trade deals, Iraq, corporate lobbying, CEO pay, and outsourcing. The mortgage crisis, he argues, was simply "the straw that broke the camel's back." You'll forgive me, senator, if I don't join you in blaming NAFTA for this recession. Obama seems to have mistaken the peripheral for the central, and the central for the peripheral.

Hillary, remarkable though it may seem, has been even further from the mark. She, too, starts by assigning blame:

[T]he problem with our economy is not the American people. Instead, the problem
is, in part, the bankrupt ideas that have governed us for the last seven years.
They have rewarded the very few at the expense of the many.

But it's tough to tell, from her speeches, precisely what's gone wrong - just that it's all Bush's fault. The speech almost immediately turns into a laundry-list of popular policy proposals, many with their own catchy names. The highlights include suspending foreclosures and adding green-collar jobs in the short-term, and then looking forward by addressing the energy crisis, investing in infrastructure and education, expanding unionization, reforming the tax code and health care, and encouraging saving for retirement. It's all part of her Economic Blueprint for the 21st Century. And they may all be worthy notions, even if the particulars are debatable. But other than suspending foreclosures, none of them is more than remotely connected to the present crisis.

So let's detail what neither candidate seems willing or able to say on the stump. The present crisis is indeed the result of decades of poor decisions made by successive administrations, compounded by the specific policies embraced by President Bush and his appointees. But it's not (mostly) about any of the problems listed by the two candidates.

We face our present crisis because the government chose to abdicate its regulatory responsibilities in favor of blind faith in the marketplace. Seventy-five years ago, after the worst financial catastrophe in our nation's history, FDR oversaw the passage of an extensive regulatory regime intended to insure that such a collapse could never happen again. Over the subsequent decades, as the financial system evolved and banks found innovative ways to evade these regulations in the pursuit of profits, those rules were updated in an effort to keep pace with the changes. Then, during the Reagan administration, there was a fundamental change of course. Instead of trying to keep up with changes, regulators began racing in the opposite direction, hurrying to remove regulatory hurdles in the interests of growth.

The theory was simple. Spreading risk over a broader array of institutions and investors would serve to diminish the exposure of individual banks, thus accomplishing by market forces what once required regulation. These institutions could then offer an array of innovative products that would benefit consumers. The theory was also spectacularly wrong.

The result was a failure on two separate (though related) levels. The first failure has become evident over the past couple of years. A frenzy of irresponsible lending and borrowing, fueled by structural innovations like the securitization of mortgages, fueled a spectacular real estate bubble which is now collapsing. That led to the second failure, which is now being revealed in spectacular fashion. Financial institutions assumed risks they neither accurately assessed nor fully understood, while outdated rules and passive regulators failed to curtail their excesses. Now the music has stopped.

Two particularly vivid incidents can serve to illustrate this two-tiered failure. In 2001 and again in 2004, Office of the Comptroller of the Currency successfully pre-empted the attempts of state regulators to reign in some of the worst excesses of the marketplace, arguing that only the federal government had the right to intervene. It will come as little shock to learn that OCC is a classic captive agency, receiving 96% of its funding from the banks it's supposed to be supervising. Its primacy affirmed, OCC sat on its hands, refusing to act until it was far too late.

The second incident is unfolding this morning. Investment banks like Bear Stearns became, in effect, lending institutions - buying up mortgages and repackaging them for sale, thus effectively setting the standards for loans in the marketplace. Banks have long been subject to extensive regulation, in part on the theory that since the Federal Government effectively guarantees their deposits, it ought to have a say in how they shoulder risk. This weekend, we learned that taxpayers will also foot the bill for the collapse of investment banks. Alas, there is no similar regulatory scheme in place to limit their risks.

So let's return to the campaign trail, to explore the remedies being proposed by Obama and Clinton in response to the present crisis. To his credit, Obama has gone further than Clinton in focusing attention on the problem of irresponsible lending and borrowing. His platform highlights two particularly useful proposals: the STOP FRAUD Act, which would crack down on some of the most abusive lending practices; and the HOME score, which would provide a simple metric (like an APR) for borrowers to measure the costs and obligations to which they are agreeing, empowering them to act more responsibly. Both candidates have proposals to limit foreclosures. Hillary wants to do "everything possible to ensure that we don't lose any more homes" to foreclosure, calling for a 90-day moratorium, a five-year adjustable-rate freeze, a $30 billion fund for local communities, and a package of similar measures. Obama proposes bankruptcy reform (which would effectively pressure lenders to be more proactive in restructuring loans) and a generous mortgage tax credit targeted at lower income households. Most economists are agreed that Hillary's bailout would trade the possibility of short-term relief for the certainty of long-term problems; the verdict on Obama's proposals is more split.

It's easy to get wrapped up in the debate over these specifics, but that debate omits what the candidates have left unsaid. Both remain firmly committed to the notion that homeownership is an unequivocal good that ought to be enjoyed by the broadest possible number of Americans. That's the sort of thinking that landed us in this mess in the first place.

So here are two heresies that both candidates need to embrace if they're going to address the present crisis and convince voters that the Democrats have faced up to our economic problems, and have the solutions we need:

Regulation is what makes free markets function:
Every speech the candidates deliver this spring must include this essential theme - We're plunging into a recession because Republicans removed the regulations that make our economy run smoothly. And, of course, its corollary: We can rebuild our economy by standing up to special interests, and passing rules to make the markets run freely and fairly. There's no need to shy away from this sort of talk. Most Americans understand instinctively that's something has gone horribly wrong, that financial institutions have behaved with breathtaking irresponsibility, and that it shouldn't be allowed to happen again. John McCain, to the extent he pays attention to the economy at all, tends to embrace the gospel of the free markets. He and his party are largely responsible for what's gone wrong; Democrats can make a compelling case that they can set it right.

Sometimes, homeownership is a nightmare, not a dream:
When ownership can only be achieved on terms that rely on rising prices or the prospect of future wealth to finance the deal, then families are better off renting. By extension, some families are now in homes that they can't afford and shouldn't have purchased. We don't just need policies that will prevent foreclosure - that amounts to denial, and will perpetuate this mismatch of resources and obligations. We need to develop mechanisms to ease the painful adjustment, enabling families to extricate themselves from ill-advised loans without either fully absolving them of responsibility for their decisions or sentencing them to financial ruin, and without precipitating a further collapse in the market. We need to admit that home prices were artificially inflated, and aren't going back to where they were anytime soon. And then we need to change the huge array of federal homeownership incentives to embrace a more reasonable goal - equal access to homeownership for all who can afford it.

There's still time to make this economic case. Each candidate can frame it in the terms with which they are most comfortable. Obama can speak of the failure of leadership in Washington, which has allowed special interests to defeat regulation, and preyed upon the aspirations of Americans. Hillary might unveil seven discrete proposals, all part of her New American Dream Plan, designed to reform the financial industry and homeownership. I'm not going to detail the specifics. Reasonable people can disagree over both the precise nature of the failures and the proper remedies. The whole point of a campaign is to hear the candidates articulate their own understandings of the crisis, and to lay out their particular solutions. So far, however, all we've heard is silence and denial. And that's not going to put anyone in the White House.

Transforming the debate requires three simple steps. The first is to pin blame where it belongs - not on NAFTA or the decline of unions or an inequitable tax code or an unaffordable war, but on a failure of regulation and on policies that fueled a housing bubble. Then the candidates need to stop pretending that everything will be fine again, and speak a truth most Americans already know and are ready to hear - we've had a binge, and we're going to have a long, painful hangover. And that will set the stage for a message that can win in November - policies and proposals to set us on a path toward renewed and responsible growth, consistent with our values and consonant with our aspirations.

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