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Early in 2005, the newly seated junior senator from Illinois, Barack Obama, invited me to join him for dinner with a small group Ad Policy

of the heads of Washington’s most influential progressive organizations. It was a pretty depressed group, given the outcome of the previous election. This exciting young African-American’s inspiring keynote speech at the Democratic National Convention, coupled with his subsequent landslide Senate victory, were pretty much the only good news anybody had seen in the preceding year’s politics.

The contents of what was said during that meeting are off the record, but I can say that after being seated next to Obama for the course of the evening, I came away deeply impressed by his poise, self-confidence and intelligence. In profound contrast to virtually every Democratic politician with national ambitions at the time, Obama evinced not the slightest concern about his ability to connect with culturally conservative and deeply religious Americans. But he was worried about his own—and his party’s—inability to offer a coherent response to the economic transformation under way in America. Long before the Wall Street crash, when housing prices were still high and most middle-class Americans felt themselves to be on relatively secure ground, Obama was looking for a way to address the problems of workers being undercut and eventually displaced by global competition. He knew how to talk to people in church; it was outside the locked factory gates in towns where the jobs had moved overseas that he felt himself stymied.

I don’t really remember if anyone had anything useful to offer that night, but if so it wasn’t much. I do know that if you ask most Americans what conservatives believe will fix whatever’s wrong with America at any given time, they can give you a simple, coherent response: lower taxes, less government, more "freedom." It may be wrong. It may benefit only the rich. But it is easy to understand and repeat, particularly when billions of dollars have been invested to make it appear plausible.

Indeed, the entire edifice of supply-side economics was constructed with this goal in mind. Neoconservative pundit Irving Kristol, Wall Street Journal editorial page editor Robert Bartley and former Treasury Secretary William Simon, among others, made this their cause throughout much of the 1970s and ’80s, with often astonishing results. They helped channel hundreds of millions of dollars, later mushrooming into billions, into the newly created conservative counterestablishment. These groups and others championed the arguments of Austrian economist Friedrich von Hayek and his American counterpart, monetarist Milton Friedman, to replace the global Keynesian consensus with their own. Their ideas were further disseminated by a rash of new quasi-academic and political journals and publishing houses, later augmented by an entire alternative media structure we now understand to be a natural part of our politics and culture.

It was in this period, as intellectual historian Daniel Rodgers explains in his forthcoming Age of Fracture, that the "near global dominance of the new political economy" became evident. "Faith in the wisdom and the efficiency of markets, disdain for big government taxation, spending, and regulation, reverence for a globalized world of flexible labor pools, free trade and free-floating capital" became the dominant ideology of American politics. This helps explain why, just recently, in the midst of America’s most severe economic downturn since the Depression, no less influential a figure than Federal Reserve chair Ben Bernanke felt compelled to assert to a gathering of the top members of his profession, "I grasp the mantle of Milton Friedman…. I think we are doing everything Milton Friedman would have us do." It is also why the Republicans appear so confident in demanding a tax "compromise" with the president in which they are happy to assign $133 billion (out of a total of $347 billion) to fewer than 5 million Americans—the 5 million who are already lucky enough to be earning more than $250,000 a year.

It’s not merely that conservatives are better at selling their product, or that they happen to have an easier—and undoubtedly simpler—ideological product to sell. It’s that they know what they are selling. Liberals in general and Obama in particular cannot say the same. Much of what Tea Party candidates claimed about the world and the global economy during the 2010 elections would have earned their adherents a well-deserved F in any freshman economics (or earth science) class. But it was a story that enough voters could connect to their circumstances and fears to allow themselves to trust these charlatans with the future of their government. Liberals do not appear to address potential solutions with anything like the far right’s aura of God-given self-confidence. That is undoubtedly a disadvantage with some voters, but it is one that could be countered with a plausible story about how progressive policies and plans can be expected to provide citizens (and their children) with a brighter future than the one they feel they face today.

To achieve this, however, will require considerable re-imagination regarding our story about how the world works and America’s place in its future. Obama told such a story as a candidate during the 2008 election. But as president, having (understandably) lost the magic of that moment, and facing a much graver crisis than anyone imagined at the time, he had no story or even theory to explain what has gone wrong and how to fix it. There are more people at Obama’s table offering ideas than there were five years ago, but when it came to facing up to the Republicans’ threat to force a double-dip recession if they didn’t get their millionaires’ tax cut, they still amounted to nothing. And therein lies our fundamental problem.

Editor’s Note: To contact Eric Alterman, use this form.