Flinching from Power: Three Mistakes Democrats Need to Own

If Democrats want to understand how Trump ended up back in the White House, they need to come to grips with these seminal failures over the last 30 years — and clean up their own house.

In the spring of 2009, as millions of Americans were losing their jobs, homes, and retirement savings, the executives at AIG’s financial products division — the unit whose reckless bets had nearly brought down the global financial system — collected $165 million in bonuses. The company had just received $170 billion in taxpayer bailout money. President Obama called it an “outrage.” Treasury Secretary Tim Geithner said his hands were tied.

But no one was prosecuted.

That image — failure rewarded, recklessness immunized, executives made whole while everyone else burned — fueled the cynicism that resulted in Donald Trump becoming president twice. But it’s the middle chapter of a longer story, and the story doesn’t start with a financial crisis. It starts 13 years earlier with a telecommunications bill most Americans have never read and barely remember.

There are three specific, historically traceable decisions that have together hollowed out the Democratic Party’s credibility with working people, handed the information war to the right, and gave an autocrat the political oxygen he needed to survive an attempted coup.

Democrats have spent years arguing about messaging, identity politics, and whether the left went too far or not far enough. Those are real debates. But underneath all of them are these three foundational miscalculations.

And the party still hasn’t reckoned fully with any of them.

The 1996 Telecommunications Act

The Telecommunications Act of 1996 was signed by Bill Clinton on February 8, 1996 — the first major overhaul of American communications law since the Communications Act of 1934. It was bipartisan legislation, part of Clinton’s Third Way modernization project, designed to update an antiquated regulatory framework for the cable age. The promise was competition: more voices, more outlets, lower prices, and better service.

What it delivered was media consolidation on a staggering scale.

The act removed caps on how many broadcast outlets a single company could own. The language was technical enough that its consequences weren’t obvious to everyone in the room. To be fair: not everyone who voted for it understood what they were doing. That makes it a tragedy rather than sabotage. But the results have been devastating for our democracy.

The effects hit radio first and hardest. By 2005, just two companies — Clear Channel and Viacom — owned somewhere between a third and a half of the entire radio industry. Clear Channel alone went from roughly 40 stations before the act to more than 1,200 afterward. Newspapers, television stations, and radio properties that had previously been required to operate separately could now be owned by the same conglomerate — meaning a single billionaire could control what a community read, watched, and heard, all at once. Today, roughly 90 percent of major American media is owned by six corporations. Hundreds of local newsrooms have been gutted or closed outright. The capacity for factual, independent, locally-rooted journalism — the democratic immune system — has been systematically dismantled in the name of quarterly earnings.

It’s worth noting that Fox News launched in October 1996, the same year the act was signed. Rupert Murdoch saw what the new rules made possible and pounced on the opportunity.

WhenThe Nation’s longtime Publisher Katrina vanden Heuvel and I discussed the Telecom Act recently, she called it the “beginning of a new kind of media system where corporate power was ascendant.” Murdoch, she noted, worked the system masterfully — cross-merging broadcast stations, newspapers, and cable networks in ways the old rules never would have permitted. “There were limits,” she noted. “Those were obliterated.”

What emerged weren’t just media companies. They were oligarchs. And oligarchs know exactly what ideological environment serves their interests.

The consequences are visible and accelerating. ABC News — owned by Disney — paid $15 million to settle a defamation lawsuit Trump filed, with the money going straight to his presidential library. CBS/Paramount settled Trump’s lawsuit over a 60 Minutes interview with Kamala Harris for another $16 million. The Washington Post, owned by Amazon’s Jeff Bezos, fired a third of its newsroom in 2025 — gutting its books section, international desk, and sports coverage — shortly after spiking its own 2024 endorsement of Harris. The same Bezos who can afford to light millions on fire producing a flattering documentary about First Lady Melania Trump has decided that the Post‘s editorial independence is a liability he can no longer afford.

He’s not wrong about the math, which is the part that should terrify us. Bezos doesn’t make his money at the Post; his cash cow is Amazon. Destroying the Post’s credibility costs a fraction of what a protracted legal battle with Trump’s DOJ would. When legacy media outlets that once served as institutional checks on power are now making financial calculations about how much criticism of the administration they can afford, we are in a fundamentally different country than the one the Founders envisioned.

In 1996, Democrats chose the side of big business over democratic infrastructure. They called it modernization. Thirty years later, the information war is being lost to the right in real time.

The 2008 Great Recession

The second mistake is related. It follows the same logic, the same instinct to side with institutional power over ordinary people — but it happened under circumstances that were emphatically not Democrats’ fault. And that makes the end result all the more maddening.

The crash of 2008 started on George W. Bush’s watch, which can’t be memory-holed. The American economy has historically performed better under Democratic presidents than Republican ones, and there is a depressing decades-long pattern of Republican administrations crashing the car and Democrats being handed the keys to something that won’t start.

And so, Obama inherited the worst economic catastrophe since the Great Depression. He stopped the bleeding. The stimulus, the auto industry rescue, the financial system stabilization — these worked, imperfectly and incompletely, but they worked. That matters.

But stopping the bleeding is not the same as holding the surgeon accountable for malpractice.

The bipartisan $700 billion TARP bailout, which was passed during the last days of the Bush administration, rescued the financial system. It didn’t rescue the people who lost their homes and savings while the financial system was busy nearly destroying itself. Not one senior Wall Street executive was criminally prosecuted for the conduct that caused the crisis. Not one. And for that, we need to lay blame at the feet of Obama and his administration.

Both the Financial Crisis Inquiry Commission and the Senate’s Permanent Subcommittee on Investigations made criminal referrals to the Department of Justice, identifying specific executives at specific firms — Goldman Sachs, Washington Mutual, Countrywide, Deutsche Bank — which had engaged in conduct that investigators believed warranted prosecution. The DOJ looked at those referrals and moved on. No one went to jail.

Iceland sent its bankers to prison. The United States gave them bonuses.

Meanwhile, the stimulus Obama passed — the $800 billion American Recovery and Reinvestment Act — was, as economists including Paul Krugman and Martin Feldstein pointed out, critically inadequate. Krugman calculated in January 2009 that Obama was trying to plug a $2 trillion hole in the economy with $775 billion. Even Larry Summers, a fiscal hawk who was running Obama’s National Economic Council, later acknowledged that the final number was smaller than what the economy actually needed — although he argued it was the largest Congress would pass.

Obama trimmed the package to attract Republican votes he did not need, since he enjoyed Democratic majorities in both chambers of Congress. He didn’t get those votes. He didn’t get a sufficient stimulus, either. What followed were years of unnecessary economic misery — higher unemployment, slower recovery, far less government support than Americans would receive during COVID under Joe Biden — that fell hardest on working- and middle-class families.

In 2010, Democrats lost the House in a Tea Party wave that was fueled, in part, by rage over the bailouts. Working-class voters watched banks get saved and bankers get bonuses and no one go to prison, and they concluded — correctly — that the rules were different for the powerful. The Tea Party channeled that rage, incoherently, cynically, and turbo-charged by racism into a movement that ultimately delivered the Republican Party to Donald Trump.

The “both parties are the same” myth didn’t come from nowhere. It was fertilized by real, specific decisions. Obama’s failure to prosecute the architects of the financial crisis sent a message to core Democratic voters that neither party was going to hold elites accountable.

And that message echoed through 2016, through 2024, and into the current fractured state of the party. It eroded Democratic support in the Midwest, in rural America, in the communities that used to be the party’s backbone. It helped turn the Democratic Party into a coalition of the coasts, and handed Republicans a powerful attack line against “coastal elites protecting the powerful.”

And here we are, nearly 20 years later, still paying for it.

January 6th and its Aftermath

The wounds of the third mistake are still fresh. And we’re reminded of it every day, because Donald Trump occupies the White House again, which was once considered unthinkable.

On January 6, 2021, a mob incited by the sitting president of the United States attacked the United States Capitol in an attempt to overturn a free and fair election. Police officers were beaten and killed. Elected officials were evacuated through tunnels. The vice president was threatened with execution by a crowd chanting his name. Pipe bombs were found outside the Republican and Democratic National Committee headquarters. Nooses were erected. The whole world watched.

And then Democrats assumed the story would tell itself.

This was a catastrophic miscalculation in both tactics and strategy, and it played out on multiple fronts simultaneously.

The first front was impeachment. Democrats should have held the vote right after the presidential election was certified on Jan. 7, while the walls of the Capitol were still smeared with the blood and feces of traitors. That would have sent the message immediately that Donald Trump was responsible for the insurrection and he was being held accountable.

Instead, they waited a week. The measure won 232 votes — with only 10 Republicans on board. The delay created a permission structure for Republicans in the upper chamber. The Senate voted 57-43 to convict — a majority, but not the two-thirds required for removal. Minority Leader Mitch McConnell, an avowed institutionalist, voted to acquit on the procedural technicality that you can’t impeach a president who has already left office. And then — in the same floor speech — he said Trump was “practically and morally responsible” for the attack. He gave Trump the acquittal with one hand and delivered the moral condemnation with the other. And then McConnell endorsed him for president again. Democrats needed to call that out, loudly and relentlessly. They largely didn’t.

The second front was the Justice Department. Biden’s appointment of Merrick Garland as Attorney General was, in retrospect, exactly the wrong call for exactly the wrong moment. Garland is a careful institutionalist (not a cosplayer like McConnell). He was the right man for a normal confirmation hearing, and the exact wrong man for the most urgent accountability crisis in American democratic history.

He moved methodically, starting from the bottom up, prosecuting hundreds of low-level participants before working toward the people who organized and directed them. What critics inside the DOJ itself have called “the lost year” — 2021, the twelve months immediately after the insurrection — was spent on procedural caution. Jack Smith wasn’t appointed as special counsel until November 2022. Trump wasn’t indicted on January 6-related charges until August 1, 2023 — two years and seven months after the fact. By the time a trial could have been scheduled, it was so close to the 2024 election that the conservative Supreme Court swooped in and gave Trump the gift of sweeping presidential immunity. That helped Trump win the election and then the case was dismissed.

The third front was Congress. Democrats controlled both chambers in January 2021. They could have convened immediate public hearings — not the careful, lawyer-managed proceedings of the January 6 committee (which was excellent work, produced in 2022, too late and too slowly for the political moment) — but urgent, nationally televised accountability proceedings, held within days of the attack, forcing every Republican lawmaker to go on record while the footage was still burning in everyone’s memory. They didn’t. They waited. They trusted the process.

The process was not built for this.

If Rudy Giuliani, Steve Bannon, and Donald Trump himself had been led out in handcuffs in the weeks immediately after January 6 — when Republican senators were calling it an outrage, when House Minority Leader Kevin McCarthy was blaming Trump for inciting it, when even Mitch McConnell was saying Trump was “practically and morally responsible” — it would have been so much harder for the Republican Party to perform the historical revisionism it has since pulled off. Calling a violent insurrection a “peaceful protest” requires an enormous number of people willing to sustain the fiction. It’s easier to sustain when there are no handcuffs, no perp walks, no one at the top held responsible for any of it.

Too many Democrats were afraid to call it a coup. Afraid to call it treason. Too worried about appearing partisan to be forceful. That timidity gave Republicans the permission to call it whatever they needed it to be. And they have. And millions of people now believe the rewrite.

Where We Are Today

All three of these mistakes share the same DNA: Democratic leaders, at critical moments, flinched from holding power accountable. They chose the path of institutional comfort over the harder, riskier work of democratic defense. They sided with big business over democratic infrastructure in 1996. They sided with big finance over working people in 2008 and 2009. They sided with institutional norms over democratic survival in 2021.

Each decision felt defensible, even responsible, in the moment. Each one has been devastating in the long run.

The cumulative message, sent to voters over 30 years, is this: there are two sets of rules in America. One for the powerful — banks that nearly destroy the economy, media moguls who push agendas and consolidate without limit, presidents who attempt coups — and one for everyone else. Democrats did not create this dynamic. But they have, at key moments, declined to confront it. And every time they declined, they confirmed it.

That is why the party is fractured now. That is why the insurgent left’s populism lands so hard with younger Democratic voters who have inherited an economy and a media ecosystem shaped by these three decisions and are furious about the fallout. That is why independent voters who should be natural Democratic allies are looking at the party in 2026 and 2028 and wondering whether it’s capable of fighting for them, or whether it will, once again, trust the process and hope for the best.

The left flank of the Democratic Party is not wrong that elites have been protected. It is wrong about many of the solutions it proposes. But the underlying diagnosis — that the party has failed, repeatedly, to hold power accountable — is accurate. And until the party owns that honestly, the internecine war will keep consuming energy that should be directed toward defeating authoritarianism.

Here’s what I know after analyzing politics for more than a quarter-century: the 2026 midterms will probably be determined more by Trump’s failures than by Democratic messaging. The party doesn’t need to solve its identity crisis to win back the House with an unpopular president dominating headlines. But 2028 is a different question. Democrats have struggled for the last three presidential cycles to close the deal with voters. And the fissures that have been opening since 1996 are not going to close on their own.

You don’t rebuild trust by moving on. You don’t rebuild it by arguing that the other side is worse — even when that’s true, even when it’s not close. You rebuild it by telling the truth about what went wrong, by being specific about who got hurt and who didn’t pay for it, and by making commitments credible enough that people who have been disappointed before have a reason to believe them.

That would be a start. A real one, this time.

Susan J. Demas is Lincoln Square’s Executive Editor and a 25-year journalism veteran. Subscribe to her Substack.

---