The New Liberal Order

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The Receding Right
Flash forward to the evening of Nov. 4, and you can see why liberalism has sprung back to life. Ideologically, the crowds who assembled to hear Obama on election night were linear descendants of those egg throwers four decades before. They too believe in racial equality, gay rights, feminism, civil liberties and people's right to follow their own star. But 40 years later, those ideas no longer seem disorderly. Crime is down and riots nonexistent; feminism is so mainstream that even Sarah Palin embraces the term; Chicago mayor Richard Daley, son of the man who told police to bash heads, marches in gay-rights parades. Culturally, liberalism isn't that scary anymore. Younger Americans — who voted overwhelmingly for Obama — largely embrace the legacy of the '60s, and yet they constitute one of the most obedient, least rebellious generations in memory. The culture war is ending because cultural freedom and cultural order — the two forces that faced off in Chicago in 1968 — have turned out to be reconcilable after all.

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The disorder that panics Americans now is not cultural but economic. If liberalism collapsed in the 1960s because its bid for cultural freedom became associated with cultural disorder, conservatism has collapsed today because its bid for economic freedom has become associated with economic disorder. When Reagan took power in 1981, he vowed to restore the economic liberty that a half-century of F.D.R.-style government intrusion had stifled. American capitalism had become so thoroughly domesticated, he argued, that it lost its capacity for dynamic growth. For a time, a majority of Americans agreed. Taxes and regulations were cut and cut again, and for the most part, the economic pie grew. In the 1980s and '90s, the garden of American capitalism became a pretty energetic place. But it became a scarier place too. In the newly deregulated American economy, fewer people had job security or fixed-benefit pensions or reliable health care. Some got rich, but a lot went bankrupt, mostly because of health-care costs. As Yale University political scientist Jacob Hacker has noted, Americans today experience far-more-violent swings in household income than did their parents a generation ago. (See pictures of the 1958 recession.)

Starting in the 1990s, average Americans began deciding that the conservative economic agenda was a bit like the liberal cultural agenda of the 1960s: less liberating than frightening. When the Gingrich Republicans tried to slash Medicare, the public turned on them en masse. A decade later, when George W. Bush tried to partially privatize Social Security, Americans rebelled once again. In 2005 a Pew Research Center survey identified a new group of voters that it called "pro-government conservatives." They were culturally conservative and hawkish on foreign policy, and they overwhelmingly supported Bush in 2004. But by large majorities, they endorsed government regulation and government spending. They didn't want to unleash the free market; they wanted to rein it in.

Those voters were a time bomb in the Republican coalition, which detonated on Nov. 4. John McCain's promises to cut taxes, cut spending and get government out of the way left them cold. Among the almost half of voters who said they were "very worried" that the economic crisis would hurt their family, Obama beat McCain by 26 points. (See pictures of Obama's campaign.)

The public mood on economics today is a lot like the public mood on culture 40 years ago: Americans want government to impose law and order — to keep their 401(k)s from going down, to keep their health-care premiums from going up, to keep their jobs from going overseas — and they don't much care whose heads Washington has to bash to do it.

Seizing the Moment
That is both Obama's great challenge and his great opportunity. If he can do what F.D.R. did — make American capitalism stabler and less savage — he will establish a Democratic majority that dominates U.S. politics for a generation. And despite the daunting problems he inherits, he's got an excellent chance. For one thing, taking aggressive action to stimulate the economy, regulate the financial industry and shore up the American welfare state won't divide his political coalition; it will divide the other side. On domestic economics, Democrats up and down the class ladder mostly agree. Even among Democratic Party economists, the divide that existed during the Clinton years between deficit hawks like Robert Rubin and free spenders like Robert Reich has largely evaporated, as everyone has embraced a bigger government role. Today it's Republicans who — though more unified on cultural issues — are split badly between upscale business types who want government out of the way and pro-government conservatives who want Washington's help. If Obama moves forcefully to restore economic order, the Wall Street Journal will squawk about creeping socialism, as it did in F.D.R.'s day, but many downscale Republicans will cheer. It's these working-class Reagan Democrats who could become tomorrow's Obama Republicans — a key component of a new liberal majority — if he alleviates their economic fears. (See pictures of former Presidents Clinton and Bush.)

Obama doesn't have to turn the economy around overnight. After all, Roosevelt hadn't ended the Depression by 1936. Obama just needs modest economic improvement by the time he starts running for re-election and an image as someone relentlessly focused on fixing America's economic woes. In allocating his time in his first months as President, he should remember what voters told exit pollsters they cared about most — 63% said the economy. (No other issue even exceeded 10%.)

In politics, crisis often brings opportunity. If Obama restores some measure of economic order, kick-starting U.S. capitalism and softening its hard edges, and if he develops the kind of personal rapport with ordinary Americans that F.D.R. and Reagan had — and he has the communication skills to do it — liberals will probably hold sway in Washington until Sasha and Malia have kids. As that happens, the arguments that have framed economic debate in recent times — for large upper-income tax cuts or the partial privatization of Social Security and Medicare — will fade into irrelevance. In an era of liberal hegemony, they will seem as archaic as defending the welfare system became when conservatives were on top.

See pictures of the world reacting to Obama's win.

See pictures of presidential First Dogs.