Election 2010 will be known as a "shellacking," the president’s characteristically tempered term for what might better be called a rage-fueled bloodletting. Democrats lost more than sixty seats in the House, the worst rout in postwar history, as well as six Senate seats and key statehouses and governorships.

Republicans framed these results as a repudiation of liberalism. The "unmistakable message," said incoming House Speaker John Boehner, was "change course." Blue Dog Democrats, after suffering the loss of half of their caucus, called for a turn to "incrementalism," in the words of Representative Heath Shuler, who suggested that Nancy Pelosi should be displaced as the party’s leader in the House. (Thankfully, the lady is not for turning.) Washington pundits argued that Obama’s mistake was trying to do too much, catering to his liberal base, and they advised him to imitate Bill Clinton after 1994 by trimming his sails and tacking to the center.

Before this conventional wisdom hardens into received truth, progressives need to take a tough, lucid look at what really happened. With the country beleaguered at home and abroad and the push for reform frustrated, it is vital that we lay out a clear strategy going forward.

It’s Still the Economy

With unemployment near 10 percent, the economy was the overriding issue. Exit polls showed that 40 percent of voters said that their financial situation had gotten worse since two years ago, and two-thirds of them went for Republicans. Voters don’t hold Obama responsible for the mess—Bush and Wall Street are sensibly given most of the blame. But not surprisingly, they hold Obama and the Democrats responsible for failing to fix it.

Obama’s problem wasn’t that he did too much or was too liberal. It was that he did too little and wasn’t radical enough. The recovery plan stopped the economic free fall that Obama inherited, but it wasn’t enough to get the economy going. Weakened by unified Republican obstruction and wrongheaded Blue Dog opposition, public spending was barely enough to counter budget cuts at the state and local level.

Given the scope of the financial bust—Americans lost nearly $11 trillion in the value of their savings and homes—any recovery would have been predictably slow and difficult. That made winning the larger battle of ideas and discrediting the failed conservative policies that drove the economy off the cliff a crucial long-term strategy. But here the president was largely absent without leave. Hoping for bipartisan cooperation, Obama chose not to level a searing critique of conservatism, as Reagan had of liberalism when he took office. His economic advisers Timothy Geithner and Larry Summers were particularly hapless, for they were implicated in the crisis and still espoused much of the neoliberal gospel. Confident that the Recovery Act would work, the White House presented it as the solution, not as the first step in an ongoing drive to build a new economy.

This folly was exacerbated by the decision to continue the Paulson-Bernanke-Geithner policy of rescuing the banks without reorganizing them or at least forcing heads to roll. Taking a cue from the Tea Party, Republicans conflated the recovery plan with Bush’s bank bailout. The administration was charged with running up deficits to bail out Wall Street without creating jobs on Main Street. Without revising their failed mantra, Republicans presented themselves to voters as populist tribunes (while peddling themselves to Wall Street as their protectors). The ploy worked: exit polls showed that a plurality of voters (35 percent) blamed Wall Street for the economic mess, but these same voters chose Republicans over Democrats by a 56 to 42 percent margin. This is the full measure of the White House’s political malpractice.

Progressives bear some blame for the failure too. Buoyed by the emerging majority that carried Obama into office, progressives poured resources into building coalitions to drive the reform agenda on energy, healthcare, immigration and financial regulation. These efforts had some positive effects: healthcare would not have passed without progressive mobilization, and financial regulation got stronger because of a scrappy citizen coalition. But with the exception of labor, there was no large movement calling for action on jobs until the One Nation march in October. Until too late in the game, progressives were reluctant to challenge the limits of the economic debate, to push independently for change and to censure the White House and Congress for pandering to the big banks and failing to move on jobs. The weakness of independent progressive mobilization made it easier for the right to tap into the populist temper.

Passion Attracts

Many establishment pundits have focused on the swing of independent voters, whose support for Democrats dropped from 52 percent in 2008 to just 39 percent in 2010. Conservative Democratic strategists argue that this decline illustrates the dangers of trying to rouse the party’s base in the run-up to the election. This is, in a word, bull.

The voters who turned out in 2010 would likely have elected John McCain in 2008. They were older, whiter and more conservative than the voters who put Obama in office. Turnout was at 40 percent this year, about average for an off-year election. But self-described conservatives represented 42 percent of the vote, up from 34 percent in 2008, and they gave Republicans a higher share of their votes (86 percent, up from 78 percent in 2008). There is no question that the Tea Party mobilization, the torrent of corporate-funded attack ads and the Fox News echo chamber got conservatives to the polls in large numbers. Seniors over 65 represented a striking 23 percent of the vote, and they went for Republicans by a margin of 58 to 40 percent, up from 2008. Here, the dishonest barrage of ads describing healthcare reform as cutting $500 billion from Medicare probably had some effect.

This increase in the conservative vote was mirrored by the falloff in Obama’s base. Young people, minorities and single women—the rising demographics that gave Obama his majority in 2008—shrank from 46 percent of the electorate to 40 percent, and they gave Democrats a lower percentage of their vote than they did in 2008. Young people under 29 represented 11 percent of the vote, down from 18 percent, and they chose Democrats over Republicans 57 to 40 percent, as opposed to 66 to 32 percent in 2008.

Conservatives were aroused; liberals were discouraged. This "enthusiasm gap" affects more than the turnout of the base. An aroused base takes the case to the uninvolved, the disengaged. A discouraged base, like conservatives in the latter Bush years, is tongue-tied, confused, defensive. Far more than the purported turn against liberal policies, it’s this trickle-down enthusiasm effect (or lack thereof) that helps explain why independent voters swung to Republicans in 2010. Independents are not a stable group of voters with fixed opinions equidistant between two parties. Rather, independents tend to be voters who are paying less attention to politics, and with less information, than partisans. Most tend to favor one party over another. A fired-up base brings out the independents that lean to that party and may also help persuade true independents.

The argument that Obama should tack to the prevailing conservative winds is simply wrongheaded. That surely wasn’t the way the Republican Party came back from its defeats in 2006 and 2008. Passion attracts while cautious positioning too often alienates the partisans the president needs to re-engage. As Marshall Ganz has argued, the president went from being a transformational candidate to being a transactional president; the candidate who empowered his supporters became the president who demobilized them—and Democrats paid the price.

No Conservative Mandate

Despite the Democrats’ "shellacking," voters provided no mandate for conservative ideas. Republicans did not gain popularity; Democrats lost it. The GOP strategy was to attack, not to advocate. To the extent Republicans advocated anything, few Americans heard it. And when the extremist agenda of Tea Party candidates like Sharron Angle and Joe Miller, who called for privatizing Social Security, was highlighted, voters rejected it.

In fact, voters remain skeptical about the conservative agenda. Exit polls showed a majority favored repealing the Bush tax cuts for the wealthy or repealing them altogether, as opposed to just 39 percent who wanted keep them entirely. An election-night Campaign for America’s Future/Democracy Corps poll asked voters what they worried about more: the failure to make necessary investments to create jobs and strengthen the economy or increasing government spending so much that taxes will have to be raised. Voters virtually split evenly between the two. Asked to choose between an agenda drawn from the Republican "Pledge to America" (reducing the deficit by cutting spending, extending the tax cuts, offering a 20 percent tax cut to small business) and an investment agenda that creates jobs by spending on infrastructure, science and technology while extending tax cuts for the middle class, the electorate favored the investment agenda 52 to 42 percent. In other words, even the conservative-tilting electorate remains open to progressive ideas to fix the economy.

Obama’s Strategy: Getting Clinton Right   It is essential that President Obama dispel the mist surrounding Bill Clinton’s comeback after 1994. The prevailing view—propagated by New Democrats and the former president himself—is that Clinton’s recovery came from an agile move to the center, joining with Gingrich Republicans to balance the budget and "reform" welfare and embracing conservative symbols like school uniforms and parental V-chips for television.

In reality, after some public flailing about, Clinton found his footing after the Oklahoma City terrorist bombing, using the occasion to speak for the country and condemn those who propagate hatred of public service. He then defended Medicare and Medicaid, education and environmental programs from deep cuts demanded by the Republican Congress. When Gingrich shut down the government, Clinton soared in the polls. "M2E2" (Medicare, Medicaid, Education and the Environment) became the centerpiece of his campaign against the lackluster Bob Dole. Clinton was ahead by double digits when he was still vetoing Gingrich’s welfare repeal.

Obama faces more formidable obstacles than Clinton ever did. The economy is more likely to stagnate, and mass unemployment could easily become the "new normal." Republicans, tempered by the Gingrich flameout, are less likely to overreach. Indeed, they’ve been rewarded for just saying no thus far. They are likely to hold a series of symbolic votes to appeal to their base (a repeal of healthcare) and seek agreements that mean little (a moratorium on earmarks). They can achieve little and still let the president take the blame for a stubbornly bad economy.

Obama has little choice but to reach out to Republicans to gain what agreements he can that might boost the economy. This may entail debilitating compromises like the extension of the Bush tax cuts. He might be able to mobilize the business community in favor of pushing for infrastructure investment. He’s pledged to try to make progress on a new energy policy, although that seems less likely. In any case, little is likely to be accomplished in Congress, which will be devoted to symbolic repeals and search-and-destroy investigations.

Given this, it is imperative that the president do three things. First, he’d be wise to focus on governing and invoke his executive authority to further progressive reform and to strengthen allies. On energy, immigration, workers’ rights, fair labor standards and "don’t ask, don’t tell," the president has formidable powers on his own.

Second, the president must use the coming fights with Congress to show whose side he’s on. He should be prosecuting the widespread fraud in the banking industry and challenging China and other trade violators. He should make himself into the defender of core programs that serve working and poor Americans, the very constituencies conservatives have in their sights. His Deficit Commission will report in December, amid establishment pressure to cut Social Security. The president should stand tall and announce that Social Security doesn’t contribute to the debt and won’t be cut on his watch.

Third, the president must do what he failed to do in his first two years—lay out a bold vision and program for reviving the US economy and fight for it, slamming conservatives who stand in the way. He needs to join the battle of ideas, not drift above it.

The Campaign for America’s Future/Democracy Corps poll asked voters how they would react if Obama made a postelection speech committing to building a new economy for the middle class that laid a "foundation for jobs and growth" by "investing in education, research and innovation"—a classic argument for progressive reform. Two-thirds rated the statement positively, including 71 percent of swing voters. The poll then tested two major initiatives. One called for a plan to rebuild infrastructure, including a new National Infrastructure Bank; voters favored this proposal 53 to 35 percent, including a majority of independents. The second, more ambitious initiative called for a strategy to revive US manufacturing, including investment in infrastructure and science, an aggressive trade policy, Buy America procurement policies and an end to tax breaks that encourage moving jobs abroad. It was favored by 80 percent of voters, more than half of whom expressed strong support.

Americans are still looking for answers that are commensurate with the scope of our challenges. The president would be well advised to present himself not as a chastened politician but as a transformational leader, championing the fundamental reforms needed to revive America and rebuild the middle class.

A Strategy for Progressives

Progressives also need to rethink their own strategies moving forward. A majority for progressive reform can still be forged but only with a revival of bold vision, populist energy and independent organizing. Barack Obama provided a vehicle for that energy in 2008, but progressives had paved his way. We stopped Bush when he sought to privatize Social Security. We built the movement that opposed the Iraq War and brought Democrats their majority. We provided the drive for a transition to renewable energy and leadership in the green industrial revolution. Those successes gave an African-American freshman senator the sense that there was something big happening, something he could tap into. It is vital to rekindle this independent energy. To allow the corporate-funded Tea Partyers to capture the populist anger at Wall Street bailouts and special interests is simply political malpractice.

We’re headed into a period of defensive struggles—against cuts to Social Security, unemployment insurance, education and Head Start; against the continuation of two wars and increases in military spending; against the climate change know-nothings. Progressives must fight these battles, but we should also be prepared to challenge the limits of the debate.

We need a broad mobilization for jobs, a call to rebuild America that challenges trickle-down economics, special-interest politics and the divide-and-conquer strategies that are destroying America’s middle class. That requires mobilizing working families, the unemployed and citizens of conscience to challenge both the cautious White House and the conservative Congress.

This can be complemented with an inside-out strategy, defined not by the White House but in conjunction with progressive members of Congress. In this election, the House Progressive Caucus lost only three seats, while the Blue Dogs lost thirty, leaving Democrats smaller but more liberal. In the minority, they have no chance of passing legislation. But acting collectively, the Progressive Caucus could reinforce movement protests, defining choices with a bright line, exposing how conservatives cater to corporate interests over the common good, while putting forward an alternative direction. Outside organizing could help magnify and broadcast this agenda—insisting on withdrawal from Afghanistan, exposing the climate deniers while pushing for green jobs, detailing the reforms needed to take back our politics from corporate money and interests.

The rear-guard battle against cuts to the social safety net could be reinforced by a poor people’s campaign that ends the shameful silence about poverty. Legislators should join the vibrant movement for immigration reform in pressuring the White House to act administratively, while confronting Republicans with the prospect of losing Latino voters for a generation. This effort should be complemented with a push to recruit true progressive champions and finance and staff their campaigns. Progressives should gear up to run in the primaries of the seats just lost—while putting Democrats on notice that we are prepared to challenge those who stand in the way.

With Washington more and more gridlocked, citizens must move. Americans fear this country is headed into decline, while their government caters to special interests that feed off their tax dollars. They are searching for answers that conservatives cannot supply. A majority for progressive reform can still be forged. But it will require independent action to revive the energy and, yes, the hope that the past few years have squandered.