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There are plenty of complaints I have with Obama, but you clearly don't follow politics in other countries very much. Most American liberals look to Europe as an inspiration, and it's true that the European welfare state is something I think everyone on this site would aspire to. But Europe has its own problems, and when it comes to spending cuts and austerity measures, Europe actually has us beat. Right now, most of Europe - even the countries governed by the left like Greece and Spain - is engaged in massive austerity (which is why countries like Spain and Greece have unemployment over 20%). And European banks, particularly French and German banks, are significantly less regulated than ours. I think Obama and Geithner's banking policies have been far too lenient, and yet European regulators have been bitching that the Obama Administration is being way too hard on the banks!
The basic differences in politics between the U.S. and Western Europe are these: American politics is well to the left of European politics on issues like immigration, ethnic and religious diversity, freedom of speech, and other civil liberties (although the gap on that front - i.e. 4th Amendment protections - has narrowed quite a bit unfortunately post-9/11). European politics is well to the left of the U.S. in regards to the welfare state, which is largely due to the fact that the mainstream European Right accepts the welfare state. (Also, the European Right isn't always socially liberal - it is in parts of Western and Northern Europe - France, Belgium, the Netherlands, Scandinavia, and to an extent Germany and the UK. In many Catholic countries, and in Southern, Eastern, and Central Europe, the European Right is fairly traditional on issues like gay rights and abortion rights.)
In the U.S., that isn't the case. Instead, our major right-wing party basically rejects the welfare state entirely. That means that anyone who is remotely sympathetic to the welfare state is a Democrat, making Democrats a fractious mix of centrists and progressives. Add institutional impediments - checks-and-balances, frequent elections, filibusters - and it becomes very difficult for one party to impose a welfare state on its own. It's no accident that the biggest expansions of the welfare state in American history happened only in short bursts during periods where the Republicans (a) DID accept the welfare state and/or (b) were reduced to near irrelevance in Congress. (Republicans had only about 20% of the seats in Congress when FDR entered, for example.)
I would argue, that insofar as U.S. politics has shifted to the right (at least on economic justice questions), the single-biggest factor is that the Republican Party shifted to the right. Democrats did unfortunately move to the right on financial matters and labor issues (though they also have moved well to the left on social issues compared to where they were in the 1960s), but by far the most significant factor was the GOP abandoning their accommodation with the welfare state which they had during the Eisenhower and Nixon/Ford years.
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