A good friend of mine, Shanti Tangri, a Professor Emeritus of Economics, from Rutgers and I were talking about the Republican gains in the House and why the made those gains

Professor Tangri is no Marxist economist or partisan of socialism, but he is no friend of Milton Friedman or the Reagan Bush Republicans either.  He has also been involved in local reform Democratic party activities

He made what I consider to be very good points about what Obama should have done when he became President, and what I think as an historian he can advocate to  begin to rally people around for the 2012 election.

First, he made the point that public anger at the failure and corruption of Wall Street and the banks especially was overwhelming when Obama became President.  He could have acted seriously  to regulate the banks, perhaps even raising the issue of nationalization, in order to connect the "bailout" to investments in what progressive economists call human capital, rather than what appeared to loans to the banks with no real strings attached, which they would repay when they were solvent and go back to business as usual. 

His"bailout program," explainedin the language of Wall Street Journal reporters,  permittted the Right Repubicans to make  their pseudo populist appeals, to pretend that they were against Wall Street and the big investment banks, when what they really were for was and is the Bush admnistration status quo. 

Thse comment were true in my opinion and Obama can, with a deadlock looming with Congress, begin to call for real restructuring of the banking and investment system in order to channel the flow of capital toward peoples need.

This would enable his administration to  seize the initiative from the Republicans, making it clear to everyone that their only serious interest is in protecting the corporations and the wealthy from both taxation and regulation. 

He can run against Wall Street and the transnational banks, even though his administration is associated with "bailing them out" by attacking them for breaking what was in effect a social contract with the administration and the people, hoarding rather than investing capital and using the crisis to profiteer at the expense of peoples needs.

Since organized labor was and is the most solid element in the Obama coalition, he can connect his campaign against Wall Street and the transnational banks with strong and clear support for employee free choice, explaining to the people the necessity of a strong democratic labor movement as not only  to protect workers rights  but also to maintain and raise the real living standards of the people,(both union and non union)  which not only increases the value of their labor but their mass purchasing power, increasing revenues and reducing both consumer and public debt

What the Republicans really represent as the "party of no" is  a recycled version of the Reagan-Bush status quo, which means lower incomes, cheaper labor, and a banking system that will provide much less credit at higher interest rates to both small business and consumers.  In short, a "paradise" for finance capital based on more real privation for  the great majority of Americans then we have seen since the Great Depression, as long as that "paradise" lasts.

 And we can be sure that  with mass purchasing power declining and existing social safety programs flooded with claims from the unemployed and the impoverished, it won't last long

Finally, Obama can begin to address what was really the central reason why Republicans made the gains they did--that is, the failure of his administration to deal effectively enough with the high unemployment, stagnating incomes and inadequate social safety net in the non metropolitan(meaning non big city ) industrial Middle West and areas like central Pennsylvania and West Virginia which in some important ways, resemble the non industrial Middle West in their demography. 

 He can come forward with a pledge to establish a national jobs program, even do perhaps what Truman did in 1948 when he called  the Republican Congress for a special session and came forward which advanced progressive legislation which they angrily voted down(which he expected them to do) and then ran against them as a "do nothing, good for nothing" Congress repreesenting the interests of the rich and the employers. 

The labor movement was much larger in percentage terms then and Truman of course had former Vice President Henry Wallace running to his left as the candidate of the pro peoples movements anti-cold war Progressive party, threatening at the beginning of the election to win millions of labor and minority votes, but the strategy worked to elect Truman and regain control of Congress for New Deal Democrats. 

 That is the only strategy that I see that can work for Obama if he is to save not only his presidency but the coallition that elected him and which was not effectively mobilized in these elections to undetstand what the administration had already done positively and both why and how it had to go much further in order to achieve its 2008 goals.

Marxists especially can say to Obama that his administration needs both vision and a program if it is to defeat a Republican party which has neither.  If it can bring such a vision  program to the people, explaining it in terms that working people can understand, we and it can term the defeat of this election into a major victory in 2012