After the Democratic debacle in 2010, President Obama decided he needed someone in the West Wing who had the smarts, the toughness, and the experience in Washington to turn the fortunes of his administration around and prepare the ground for his re-election campaign.
He tapped Democratic insider and brother of Chicago's mayor Bill Daley. Daley had extensive experience in politics and government, serving on the DNC as well as in the Clinton administration. He was also considered something of a Wall Street insider and it was thought he could improve Obama's relationship with the business community.
Alas, as Jonathan Chait points out, it was a spectacular blunder because Daley completely misread the smoke signals coming from Capitol Hill and the American people:
Hiring Bill Daley as chief of staff may not have been the biggest mistake of President Obama's first term, but it was surely the most obvious one. Now he appears to be reversing it. The official line is that Daley is not being demoted, he is merely handing off more of the day-to-day responsibilities of managing the presidency to Pete Rouse. But, of course, managing the day-to-day traffic in the White House is the entire source of the chief of staff's power. All accounts suggest Daley performed the mechanics of his job in a catastrophically bad way.
But the interesting legacy of Daley's tenure is not his mechanical performance. It's that he conducted an experiment based on the Washington elite view of the Obama presidency. That view, shared by business leaders, centrist pundits, and other elites, holds that Obama's main problem has been excessive partisanship, liberalism in general, and hostility to business in particular. In December, 2009, Bill Daley wrote a Washington Post op-ed endorsing precisely this analysis. After the midterm elections, Obama - pelted by Daley-esque complaints - appointed Daley chief of staff. "His moderate views and Wall Street credentials make him an unexpected choice for a president who has railed against corporate irresponsibility," reported the Post. Republicans like Mitch McConnell, Karl Rove, and FedEx CEO Fred Smith raved.
Daley, pursuing his theory, heavily courted business leaders. He made long-term deficit reduction a top priority, and spent hours with Republican leaders, meeting them three-quarters of the way in hopes of securing a deal that would demonstrate his centrism and bipartisanship. The effort failed completely.
The effort failed because Daley's analysis - which is also the analysis of David Brooks and Michael Bloomberg - was fatally incorrect. Americans were not itching for Obama to make peace with corporate America. Americans are in an angry, populist mood - distrustful of government, but even more distrustful of business.
In other words, initiate class warfare - which is something Obama is doing with relish. The politics of envy rarely works in America except during stressful economic times. Now that Obama has sidelined his most authentic link to the business community, it's an easy guess that the president will only increase his populist rhetoric and seek to divide the country even further.