Even before Massachusetts voters sent a wake-up call to President Obama and Congressional Democrats in the form of a conservative Republican successor to Edward Kennedy, mainstream pundits and Democratic proponents of caution and compromise were misreading it. Martha Coakley did not lose the Senate race to Scott Brown because Massachusetts voters suddenly turned into tea partyers.

Coakley’s problem was twofold. The state attorney general ran a cautious, by-the-numbers campaign that failed to energize Democrats and independents–the vast majority of Bay State voters. While ranting by national conservatives about creeping socialism meshed with Brown’s anti-tax, anti-national healthcare message to fire up angry Republicans and “throw the bums out” independents, frustrated Democrats wondered why they should maintain a sixty-seat Senate majority to pass a lame healthcare bill and surge more troops into Afghanistan.

When Democrats finally figured out they were in trouble, party activists and their labor movement allies scrambled to find an issue that would energize the base. It wasn’t healthcare, and it certainly wasn’t foreign policy. With their super-majority in jeopardy, Obama and his team suddenly realized Americans are mad as hell at big bankers and an economic “recovery” that found its way to Wall Street but bypassed Main Street. In his last-minute campaign stop for Coakley, Obama sounded more populist than at any time since his election. “I’m fighting for financial reforms to stop Wall Street from playing havoc with our economy,” he told voters. That was the right message. But it was delivered way too late and with an air of desperation that did little to inspire confidence that his administration is really going to crack down on Wall Street speculators and errant CEOs.

Yes, progressive populism is exactly what Obama and his allies should be preaching when the official unemployment rate is 10 percent and the real number is above 17 percent. But Democrats should know by now that for a populist message from those in power to be taken seriously, it must be delivered consistently and credibly. The approach of the administration and Congress to healthcare has run into difficulty not because the proposals are too bold but because what is being sold as reform is far too generous to Big Insurance and Big Pharma and far too tightfisted when it comes to bringing good, affordable coverage to more Americans. Obama and his Congressional allies must not abandon the push for reform; they must strengthen their resolve. If this healthcare legislation fails, it could snuff out any chance for action in areas like financial regulation, immigration and employee free choice.

The president should also recognize that claims about the success of his stimulus program ring hollow to laid-off workers. And an auto bailout that is closing plants does not make any more sense than a bank bailout that is enriching CEOs and stockholders but doing little to free up credit for small businesses, farms or families struggling to keep their homes.

Massachusetts sent a wake-up call, no doubt about it. But it was not a call for abandonment of–or further compromise on–healthcare, easing off big banks or a laissez-faire approach to rising unemployment. The signal from Massachusetts is that the murky politics of bipartisanship aren’t cutting it in Boston, Worcester or anywhere else in America. That’s the message Democrats must hear if they are to have any hope of maintaining majorities in Congress this fall.