The Republican Party is in trouble, and it knows it. But it does not have a clue what to do.

The Democratic Party is in trouble, too. But it is troubles run much deeper: It does not even recognise that it has a problem, as it stands on the brink of making that problem substantially worse.

Just after the circus known as CPAC came and went last month, RNC Chairman Reince Priebus unveiled the GOP's self-autopsy. The unspoken premise of this exercise was symptomatic of what was wrong: that Republicans, who were stunned when they lost the 2012 election just the way all the polls said they would, were none-the-less perfectly capable of objectively figuring out what was wrong with themselves.

Ri-i-i-i-i-ight!

Of course, any group or organisation that is in trouble faces a somewhat similar dilemma - the more trouble you are in, the less likely you are to understand why - but the degree of disconnect from reality in today's GOP puts them into class with few other members outside of the ruling parties of one-party states.

But the Democrats have it even worse. They have won the popular vote in every presidential election since 1992 except for 2004, and yet they have been playing defence - rather badly - throughout most of this period. They do not have the means to even consider what it might look like to go on offence, except as a kabuki theatre to rev up their base come election time.

In truth, the Republican party only has three problems: its policies are unpopular, its policies do not work, and they hate everybody who does not agree with them. In contrast, the Democratic party has only one problem: it wants to be more like the Republicans.

This is perfectly exemplified by the Obama administration's announcement of a budget proposal that will foolishly include allegedly "smart" cuts to both Social Security and Medicare - a Republican wet dream for generations. It is what the donor class of America's Versailles demands, even though Social Security does not add a dime to the deficit, and Medicare costs are driven by America's out-of-control health costs in general (roughly 50 percent higher than any other country), not by anything intrinsic to the programme itself.

Long-term federal budget woes



As Thomas Ferguson and Robert Johnson pointed outmore than two years ago, the real causes of America's long-term federal budget woes is precisely that same donor class, or more specifically, its concentrated oligarchic power centres in the military-industrial compex, the medical-industrial complex and the financial sector. So long as the donor class so thoroughly dominates US politics, only the victims can safely be blamed. And Obama is not anything if not "safe".

From tax cuts for millionaires and billionaires to slashing Social Security and Medicare to opposing any form of gun safety laws - even universal background checks that 90 percent of NRA members support - the GOP pattern of supporting unpopular bad policies is remarkably consistent, as is their knee-jerk tendency to demonise anyone who does not agree with them.

Agree on 2 out of 3 policies - even 6 out of 7 - and you are a RINO, Republican-In-Name-Only. And the GOP's sad truth is, there are far more RINOs than elephants: if Ronald Reagan were alive today, he would be a RINO, too. He raised taxes as well as cutting them, gave amnesty to millions of undocumented workers and supported the assault weapons ban.

A little bit of history is in order here. In 1928, the Republicans won their third straight election, having presided over a heady economic boom, only to see it all go bust in the most severe economic downturn that US - and the world - had ever seen. They would not win control of both the White House and Congress again for 72 years - and even then, it took the intervention of the Supreme Court to put their man in the White House.

Eight short years later, history repeated itself, with the worst financial crises since the Great Depression, and Democrats lead by Barack Obama swept back into power again. By all rights, the Republicans should not have expected to be back in power again for another 72 years - if then. After all, as George W Bush famously said, "Fool me once, shame on you. Fool me twice... won't get fooled again."

But that is not exactly how things have turned out, to put it mildly. In 1932, the defeated Herbert Hoover reached out to Franklin D Roosevelt, trying to get him to agree to continue Hoover's policies, despite Hoover having lost in a landslide. Roosevelt declined. Obama, in sharp contrast, has bent over backwards to join his policies with that of Republicans. He not only refused to prosecute Bush-era war crimes, he expanded on them with his drone programme, while prosecuting whistleblowers instead.

He first vigorously supported, and then extended Bush's Troubled Asset Relief Program (TARP) which was designed to save the banking system by saving the biggest banks. He then continued with a vastly undersized stimulus bill that was more than 1/3 tax cuts, and a health care reform plan originally cooked up by the conservative Heritage Foundation in the early 1990s. He took Bush's education privatisation vehicle, No Child Left Behind, and put it on steroids with his Race to the Top, which has only predictably generated more widespread corruption.

Every effort he made was to prioritise building bipartisan bridges over actually solving the problems America faced. Of course, the GOP attacked him mercilessly every step of the way, smiling secretly all the way to the bank with the results.

It is a far cry from what happened in 1932, when the Democrats took power under Franklin D Roosevelt, winning five straight presidential elections over two decades time, and controlling both houses of Congress with only two brief two-year interruptions over the next 48 years. It was not until another 20 years after that, in the 2000 election, that -with the help of the Supreme Court - Republicans once again held the White House and both houses of Congress, ushering in what came to be seen as one of the worst presidencies of all time, culminating in the worst financial crisis since the Great Depression.

Betweem 9/11, the Iraq War, Katrina, poor job growth, declining incomes and the repeated demonisation of political opponents, Bush was already widely perceived as one of the worst presidents in US history even before the bottom dropped out in September 2008, with an approval rating hovering around 30 percent, and some polls in the mid-20s. There was, quite frankly, no major policy area in which Republican ideas actually seemed to be working.

Which is why Barack Obama's campaign message of "hope and change" was so broadly appealing to so many, even leading many Republicans to approve of him in the early days of his presidency.

Failed bipartisanship



So what happened? Simple: bipartisanship happened. Failed bipartisanship, of course, since the GOP was determined to make President Obama fail, even if it took the whole country down as well. But bipartisanship, nonetheless. In the 1930s, when the business community turned away from FDR, he responded quite naturally - and fairly swiftly - by turning to his base.

It is not that FDR was an ideologue - quite the opposite. FDR was a profound pragmatist, whereas Obama is a centrist, neoliberal ideologue, whose thinking is so rigid that he won't even consider empowering his own more leftish supporters, even to strategically counterbalance hard right Republicans, who still do not regard his presidency as legitimate.

Regardless of your own ideology - conscious or unconscious - you just have to wonder why Obama clings so doggedly to both substantive policies and political strategies that repeatedly fail so profoundly. No doubt there are multiple factors involved, but the most compelling answer, I have come to believe, comes down to a lack of vision: Obama quite simply cannot see any alternative. His politics are drastically confined by the crabbed nature of his neoliberal imagination, formed in the shadows of Reagan and Thatcher.

If the Republicans' most obvious problem - the one even they can see - is their deep hostility to diversity, the Democrats' problem is a funhouse mirror image: they think diversity is the answer, even when and where it cannot possibly be, a de facto way of avoiding deeper problems, such as profound structural inequality, which is demonstrably much worse today than it was in the pre-civil rights 1940s, 50s and early 60s.

To be sure, millions of women and minorities are much better off than their counterparts were back then, and their relative success has helped buy the political fortunes of both Hillary Clinton and Barack Obama. But today's American middle class is far less secure as a whole, and America's working poor have far less hope than they did in that bygone era, and the Democratic party's embrace of neoliberalism - highlighting diversity while ignoring, even enabling economic injustice - has left the vast majority of its would-be constituents ill-served, even including the better-off women and minorities whose good fortunes remain far more precarious than anyone would have imagined prior to 2007.

Thus, according to a report by the Pew Research Center, black wealth fell 53 percent during the financial crisis, Hispanic wealth fell 66 percent and Asian-American wealth fell 54 percent, compared to a decline of 16 percent for white households. The wealth gap between blacks and whites nearly tripled from its low in 1995 to its 2009 level.

There was a time when virtually every Democratic officeholder, from dogcatcher on up, realised that their party's fate was inextricably linked to the welfare of its core constituencies. FDR Democrats knew that in the marrow of their bones. But Obama is a neoliberal Reagan Democrat, who knows nothing of the sort.

An insight into the neoliberal imagination can be gleaned from literary critic Walter Benn Michaels, who has written repeatedly about the neoliberal imagination, particularly in contrast to Lionel Trilling's famous 1950s book The Liberal Imagination. In a 2005 essay for the Boston Globe he wrote:

[D]iversity gives us what we might call the fantasy of a left politics-a politics defined by its opposition to racism, sexism, and homophobia and hence by the idea that what we should do with difference is not eliminate it but appreciate it. Classism is the key here because classism is the pseudo-problem that brings left and right, conservatives and reactionaries together.... Classism is what you're a victim of not because you're poor but because people aren't nice to you because you're poor. For neoliberals, in other words, it's prejudice not poverty that counts as the problem, and if, at the heart of the liberal imagination, as Trilling understood it, was the desire not to have to think about class difference, at the heart of the neoliberal imagination is the desire not to have to get rid of class difference.... [T]he politics of the neoliberal imagination involve respecting the poor, not getting rid of poverty.

Of course, it is better to respect the poor than to stigmatise them, but you cannot eat respect, much less pay the rent with it, and that is not just a problem for the poor, and for authentic left politics. It is a problem for the Democratic party as well. The Republicans' continued alienation of minorities, women and gays will never be enough to return the Democratic party to health.

For that, Democrats need to offer real solutions to the material, economic struggles these groups face, just as they once did for their core constituencies during their long period of political dominance from the 1930s through the 1960s. But real solutions cannot be found within the limits of the neo-liberal toolbox, because the broader problem of economic inequality and injustice cannot even be imagined by the neo-liberal imagination.

"Obama's campaign message of 'hope and change' was so broadly appealing to so many that it even lead many Republicans to approve of him in the early days of his presidency."

'Grand bargain' obsession



So, instead of fighting against increased economic inequality, we find Obama advocating for a "kinder and gentler" form of it, which brings us back to Obama's new budget proposal, his latest round of "grand bargain" obsession, this time touted as a way out of the sequester cuts, putting Obama squarely on record in favour of cutting Social Security and Medicare. Even beyond the obvious suffering this would cause, the political folly is self-evident, as can be seen in a mid-March piece by the National Journal's Ron Fournier:

What is the GOP incentive to deal? First, getting the signature of a Democratic president on a bill reducing entitlements would be a victory for a generation's worth of Republican candidates. Casting GOP politicians as Granny-bashers would be harder to do after a Democratic White House tweaks Medicare and Social Security. Second, even token reforms by Obama in 2013, opens the door to deeper entitlement changes in the future.

What is not for the GOP to love? Sure they are in self-destruct mode. But if Obama is so eager to lead the Democrats into doing the same, they just might be able to remain competitive as both parties keep leading America down the imperial road to ruin.

It has happened before. In the 1850s, the Whig party became so fractured that it crumbled into dust, but the Democrats also split into Northern and Southern wings in the 1860 election, supporting two different candidates for President. Neither party as they existed in 1850 could handle the problems facing the nation - particularly the problem of slavery. It was not one party or the other that failed, it was America's political system as a whole. And that is precisely what we are seeing once again, today.

The Republicans were once the Party of Lincoln, but they are that no longer. They are much, much closer to being the Party of Jefferson Davis, with their government hatred, animosity towards minorities and their knee-jerk fealty to the idea of states' rights.

Meanwhile, Democrats, under Barack Obama, are no longer the Party of FDR. They are much, much closer to being the Party of Herbert Hoover, following Obama's initial protection of the bankers and neglect of foreclosed and imperiled homeowners, and his persistent obsession placing budget-balancing over job-creation and caring for the most urgent needs of tens of millions, victimised by the bad behaviour, bad judgment and bad ideas of their so-called "betters".

In recent months, it has become a commonplace of the liberal commentariat that the nation needs a healthy, responsible Republican party. And they have a point, even though they do not have a dime's worth of say in the matter. But they are strangely silent where they actually could have some influence, since the nation even more desperately needs a healthy, responsible Democratic party as well. The problem is, far too many of them seem fatally blinded by the limits of the neoliberal imagination as well.

Paul Rosenberg is a California-based writer/activist, senior editor for Random Lengths News, where he's worked since 2002. He's also written for Publishers Weekly, Christian Science Monitor, LA Times, LA Weekly and Denver Post. In 2000/2001, he was a principal editor/writer at Indymedia LA. He was a front-page blogger at Open Left from 2007 to 2011.

Follow him on Twitter: @PaulHRosenberg