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From The Rebels (Joshua Green, 2024) pp147-51

Obama’s populist makeover was hardly an accident, and it certainly didn’t owe to Warren’s example alone. His efforts to heal the partisan divide and usher in a postideological era had failed utterly. A year into his term, Gallup found that Obama was the most polarizing first-year president in U.S. history; the gap between Democratic approval of him and Republican disapproval was larger than anyone before him. To his considerable good fortune, however, it was becoming clear that his opponent was going to be Mitt Romney, a modern-day robber baron whom Axelrod privately considered “the perfect foil.” Texas’s governor, Rick Perry, one of Romney’s Republican rivals for the nomination, plunged in the first dagger, indelibly branding the former Bain Capital CEO a “vulture capitalist.” Then, a month after Obama, Osawatomie speech, a super PAC affiliated with Newt Gingrich, an. other Republican rival, produced a twenty-eight-minute film called When Mitt Romney Came to Town that featured a procession of laid-off workers and painted Romney as a rapacious job killer “more ruthless than Wall Street.” Steve Bannon, who would one day run Donald Trump’s presidential campaign but at the time was an investment banker active in Tea Party circles, got hold of the film and leaked it to Bloomberg News. For the only time in the primary season, Romney appeared truly damaged. Ten days later, on January 21, Gingrich unexpectedly won the primary in South Carolina, where the textile in. dustry had been gutted by private equity companies. “You could see the beginnings of a populist wave,” Bannon later recalled. But Gingrich was ambivalent about the line of attack. Rush Limbaugh and other conservative bigwigs criticized him and leaped to the defense of laissez-faire capitalism. Gingrich wavered. Ten days later Romney beat him in Florida and sailed on to the nomination. Bannon considered it an Opportunity squandered: “The people responded, but the politicians didn’t.” He set off to find one who would.

The lesson wasn’t lost on Axelrod. As soon as Romney secured the Republican nomination, Obama’s campaign picked up the populist attack. The opening salvo was a brutal ad that depicted Romney as having heartlessly bankrupted a Kansas City steel company in his lust for profits. Thematically, it was a carbon copy of the Gingrich film. A laid-off worker in the ad calls Romney a “vampire.” To reporters, Obama’s political advisers ceaselessly emphasized the “values” Romney supposedly demonstrated in his business career, implying something untoward or even unethical in his character for having chosen this line of work. The goal was, of course, to redirect the focus of the presidential election away from the slow recovery —the unemployment rate remained above 8 percent all summer—and onto the specific record of his opponent. Yet this required no Machiavellian scheming from Axelrod or any other Democrat because, oddly enough, Romney wanted the same thing.

It was inevitable that Romney’s career at Bain Capital—and thus the excesses of the financial industry—would feature prominently in the race because both candidates believed that they needed to exploit it in order to win. Romney was eager to de-emphasize his liberal term as Massachusetts governor, so he felt he needed to convince voters that his private equity background imbued him with special skills to fix the weak economy. Obama, presiding over that economy, needed to convince them of just the opposite—that Romney’s business skill didn’t apply to the presidency. His reelection hinged on discrediting Romney as a viable alternative, which meant going after Bain and the financial industry.

On May 21, a few days after the debut of his “vampire” ad, Obama left a NATO summit in Chicago to address reporters on what he insisted, a touch defensively, was the vital issue of the day—not some weighty geopolitical matter, but Romney’s business career. “This is not a distraction,” Obama said. “This is what this campaign is going to be about.” And so it was. Romney himself bore no small responsibility for the race and its outcome. He invited scrutiny by intentionally mischaracterizing his work at Bain as having been geared in some meaningful way toward “job creation’—he implausibly claimed to have created 100,000—rather than shrewdly maximizing profits for his investors, as was really the case.

But Obama engaged in certain deceptions of his own—a smaller one, about Romney and the menace of private equity, and a larger one, about his willingness to fulfill the Teddy Roosevelt role in a second term. During the campaign, liberals fluent in financial policy mostly kept quiet as Obama heaped the sins of Wall Street on Romney’s shoulders. It was good politics. But sometimes the hypocrisy chafed: Obama surrounded himself with Wall Street veterans, gave no prior indication of being troubled by private equity, and made no attempt to change the industry. It didn’t factor in the Dodd-Frank banking reforms or pose enough of a threat to worry financial reformers. “It’s a predatory business model which is unappealing and undesirable,” said Dennis Kelleher, president of Better Markets, a nonprofit that promotes the public interest in financial matters. “But it doesn’t pose a systemic threat, and there’s no risk of bailouts arising from its activities, so taxpayers are not at risk from it.”

The larger deception concerned Obama himself. It was the kind that first-rate politicians routinely deploy—the kind that draws admiring nods from hard-bitten political pros and other cynics, but would strike an ordinary person as classic Washington phoniness, Anyone following the campaign in the newspapers or on television would have settled on an image of the two candidates long before Election Day. Romney, with his patrician mien and expensive homes, was the candidate of Wall Street, the big banks, the financial overclass. He could never outrun Mike Huckabee’s deadly quip that he “looks like the guy who fired you.” Obama might not have been the savior he was once cracked up to be. Things weren’t going great. But as the guy calling out Romney every day, condemning the greed and selfishness of bankers and financiers, and standing up for the little guy, he registered as someone fixing to do something about it if given another term. This broad impression of the candidates was testimony to the effectiveness of Obama’s campaign and to the potency of a well’ targeted populist message. But it was fundamentally misleading. ! didn’t reflect Obama’s benign view of the financial industry or herald a leftward policy shift or diminish Wall Street’s influence on the Democratic Party one iota. Like their liberal counterparts, Wall Street Democrats mostly kept silent during Obama’s attacks because they knew, some of them personally and directly, that these posed very little risk to their livelihoods or even their chance to serve in government. On the same day that his vampire ad rolled out, Obama attended a fund raiser in New York City hosted by a prominent private equity executive.
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The old way to influence national politics was to accumulate a record of bipartisan achievement and a reputation for probity, as Clinton had done. The new way Warren pioneered was to have big, loud, messy fights that offered moral clarity and galvanized public sentiment behind a position. Warren used this technique to win a large and vocal grassroots following that gave her an independent base of support and remarkable power for a freshman senator. She used this power to take on her own party.