That’s how the party ended up with its most vulnerable members — centrist Blue Dogs in the South — hawking austerity during the worst mass unemployment crisis in 80 years. Almost all of them lost in 2010. That loss, in turn, paved the way for many of the other major problems Democrats are having. That was a census year, and huge Republican victories allowed them to control the subsequent redistricting process, in which they gerrymandered themselves a 7-point handicap in the House of Representatives and in many state legislatures.
That brings me to the foreclosure crisis, the handling of which was even worse. Instead of partially ameliorating it as with employment, the Obama administration helped it happen. As David Dayen writes in Chain of Title, the financial products underpinning the subprime mortgage boom were riddled with errors, and in order to be able to foreclose on people who had defaulted, they had to commit systematic document fraud. This epic crime spree gave the White House tremendous leverage to negotiate a settlement to keep people in their homes, but instead the administration co-opted a lawsuit from state attorneys general and turned it into a slap on the wrist that reinvigorated the foreclosure machine. There was also $75 billion in the Recovery Act to arrest foreclosures, but the administration’s effort at this, HAMP, was such a complete disaster that they only spent about 16 percent of the money and enabled thousands of foreclosures in the process.
As a direct result, the homeownership rate has plummeted to levels not seen since the 1960s. …
This is not to absolve Republicans of their obstruction in Congress or President-elect Donald Trump or anything else. But the fact of the matter is that Democrats had two golden years to fix the depression, restore the housing market, hold Wall Street to account, and cement a new generation of loyal Democrats, and they bobbled it.
2009: The year the Democratic Party died