It takes a special skill for a Democrat to lose a federal election in Massachusetts.

But whatever the failings of the candidacy and campaign of Martha Coakley, the Democratic senate candidate in Massachusetts, the Democrats’ loss of the Massachusetts Senate seat held for almost half a century by Edward Kennedy, following the party’s November loss of the New Jersey gubernatorial race, suggests the need to focus more on the broader context, and less on individual shortcomings.

The Democratic Party has squandered the enormous opportunity bequeathed to it by the election of 2008.

The party gained overwhelming control of both the legislature and executive in 2008. Yet party leaders somehow failed to recognize the political moment.

We live in populist times.

Wall Street has crashed the economy. According to the official figures — which under-report unemployment — one in six people in the country are out of work or unable to find full-time work.

People know who’s to blame for the country’s deep recession, and they want them held accountable.

And they want to see aggressive policies to put people back to work.

But we’ve seen neither populist politics nor policies from the Democrats.

Although President Obama on occasion has had harsh words for Wall Street, in general the administration has sought to blunt the public’s anger against the banksters.

It supported and has continued the Bush administration’s bailout plan, a kind of unconditional love for Wall Street. Sure, you could make the case the banks had to be saved in order to rescue the economy; but there is no defense for bailing out the richest of the rich with no strings attached.

The administration has put forward a financial regulatory plan with some very useful components. But it has refused to embrace the bold populist policies we need — breaking up the banks, taxing financial speculation — to rein in Wall Street. It has also failed to defend the good positions it has advocated with sufficient vigor and high-level involvement.

The gentle treatment of Wall Street from the outset of the administration has framed subsequent political developments.

To its credit, the administration pushed through a desperately needed economic stimulus plan. But in significant part because the size of the stimulus plan was similar to the amount spent on the Wall Street bailout, and because the administration had embraced both, the stimulus and bailout — though totally distinct — became entangled in people’s minds.

Next came health care. The Democratic Congressional leadership developed a complicated and obtuse health care plan. There was the occasional bluster about how the insurance industry was seeking to undermine the plan, but in fact the insurance and pharmaceutical industries embraced the idea, and will profit enormously from it. Rather than identifying and campaigning against the corporate obstacles to providing affordable access to care for all, the White House cut deals with them.

Meanwhile, while the stimulus and Federal Reserve interventions prevented the recession from turning to depression, the unemployment and foreclosure situations grew dire. No post-stimulus jobs initiatives appeared until the end of 2009. And the Congress and White House failed to do anything consequential to keep people in their homes.

Along the way, populism did find a partial outlet: in the confused and contradictory tea party movement.

Going forward, who grabs the populist reins will significantly determine the 2010 election results.

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The populist issue of the day is Wall Street’s exorbitant bonus payments. Wall Street remains in business only because it has benefited, and continues to benefit, from trillions of dollars in public supports. The billions that Wall Street is now preparing to pay itself in bonuses come, in a very real sense, out of the pockets of We, The People.

Neither we nor our elected officials need to stand by and watch this happen. We can take our money back by imposing a windfall bonus tax, as Representative Dennis Kucinich has proposed.

You can click here to sign a Public Citizen petition supporting a tax on Wall Street’s bonuses.

One clear lesson from the last year is that the people cannot count on political leaders to read the tea leaves and go populist — even if it is in elected officials’ narrow self interest. They have to demand it.

Robert Weissman is president of Public Citizen.

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