Democrats Lost the Debt Ceiling Debate Because They No Longer Believe In Their Own Policies–Or Their Leader

Liberals are already licking their wounds from the debt ceiling debate, wondering how it is that Republicans managed to get Democrats to abandon tax increases and shift the terms to spending cuts and entitlement reforms.

Though there are many conservatives who are critical of the bill that House Speaker John Boehner passed, and worried about splits within the Tea Party, the fact is that the left feels it lost the deal as well as the debate.

The left did lose–or, more precisely, it lost more than conservatives did–partly because it has failed to confront economic and financial reality.

In April, when Standard & Poor’s first warned of a possible downgrade in the U.S. credit rating, the White House reacted with denial. President Barack Obama’s chief economic adviser, Austan Goolsbee, said that S&P’s warning was a “political judgment” that didn’t deserve “too much weight.”

Liberals continued taking their cues from the likes of New York Times columnist Paul Krugman, who argued that Obama’s $826 billion stimulus was too small. They pushed back against budget proposals by Rep. Paul Ryan (R-WI) that prescribed changes in entitlements in order to save them from insolvency. They continued to argue that Obama had saved the economy–while the economy dipped back toward recession.

But the reality of Obama’s economic failure is forcing Democrats to back down from tax hikes, just as they did when they controlled both houses of Congress in December 2010, and extended the 2001 & 2003 tax cuts anyway.

Republicans were also able to gain the upper hand because while the leaders of both parties were prepared to raise the debt ceiling, only the Tea Party believed no deal might be better than a bad deal.

The Democrats did themselves no favors by exaggerating the reality of that threat. Only some Tea Party Republicans were adamantly opposed to raising the debt ceiling under any circumstances. Yet when Democrats tried to pressure the GOP by casting the Tea Party (falsely) as “extremists” who were prepared to cast the country into default, they actually increased the Tea Party’s leverage and the GOP’s ability to force concessions.

Another reason that the Democrats did badly was they relied too heavily on Obama, who is a very poor negotiator. His tactic was to use the media and left-wing “community organizing” groups–led by Van Jones and Moveon.org–to pressure Republicans to compromise. Yet Obama had killed the left’s enthusiasm earlier in the debate when he pretended that he might be willing to discuss changes to Social Security and Medicare.

But finally, and most importantly, Democrats lost the debt ceiling debate because many, at bottom, do not believe their own ideas.

After two-and-a-half years of Obama, they are no longer willing to suspend disbelief and trust the cult of personality–to buy the idea that Obama could magically achieve what previous left-wing administrations had not. They know that massive spending has created debt, not jobs; they know government control has not created economic growth; they know public sector unions are bankrupting states. Sure, he passed ObamaCare–and it is already a policy disaster.

I am hearing comments from liberal friends that echo those Peggy Noonan cited in her column this weekend: that Obama can’t do the job, that he has no idea how businesses survive and grow; that he was a better choice than McCain (and Palin–liberals won’t yet be dissuaded from their fear and hatred of her), but Hillary Clinton might, in retrospect, have done a far better job. Many are even thinking of voting Republican–just this once.

Pollster and Clinton associate Stanley Greenberg gives the game away in a New York Times op-ed this weekend. He acknowledges that voters dislike government, and says that to win, Democrats have to convince us that our government actually works for us. But none of Greenberg’s proposals–campaign finance reform; taxing financiers and lobbyists; and immigration reform–do much to improve government’s efficiency or efficacy.

Most Democrats know–though few will admit–that big government cannot be improved. Americans elected a president who was supposed to be the most brilliant ever, and who stacked his administration with like-minded Ivy League geniuses–and he made it worse.

What Democrats want, and need, is the old Clintonian heresy: free markets, free trade, and balanced budgets. Not even Greenberg has the courage to say that just yet. Few will–until they lose in 2012.

Republicans made mistakes in the debt ceiling negotiations–agreeing in advance to a debt ceiling increase; backing off Cut, Cap, and Balance too quickly; publicly feuding with the Tea Party; and–from the conservative side–using outside groups to undermine Speaker Boehner. But they won the debate, and they have shattered the confidence of the other side. Democrats no longer believe in their own policies–or their own president.

All they have left is their prejudices–which, ironically, reinforce their growing skepticism of government. Greenberg even calls the government “illegitimate,” simply because of the vocal presence of the Tea Party.

The truth is that the Tea Party’s policies, far from being “extreme,” are closer to the American mainstream than those of the Democratic Party. A defeat for Obama in 2012 would be good for the country–and, in the long run, for the Democrats as well.