Three Reasons Why The Dems Are in Big, Big Trouble. And One Reason Why They're Not.

What Obama-and the GOP-should learn from the Coakley defeat and slumping polls.

Martha Coakley's resounding defeat in the Massachusetts Senate race is hardly the sort of anniversary gift President Barack Obama could have predicted. Yet there it was, wrapped in a bow and plopped on his doorstep like a flaming bag of dog poo to mark the end of his first year in office.

Among other things, Scott Brown's upset victory means that Obama, who flew up to the Bay State to campaign for the deservedly doomed Coakley in the race's twilight, is zero for three when it comes to high-profile two-minute drills for beloved causes (remember getting Chicago the Olympics and putting together a global carbon deal at the U.N climate conference in Copenhagen?).

There are at least three basic reasons, plain as the nose on your face, that the Democrats and Obama are in trouble for the near future:

1. Health care reform is not popular. An ABC News/Washington Post poll published on January 19 has 51 percent against current congressional plans and just 44 percent in favor, numbers that haven't moved in a month. Other polls show even greater percentages oppose the plan, with all the trend lines over the past year working heavily against the Democrats.

People fear the obvious: "Reform" that increases the government's role in anything virtually guarantees steadily increasing costs, lower levels of services, and ballooning federal deficits. All the special-interest carve-outs to buy votes from wavering senators and pay down objections from Big Labor didn't help either, especially on an issue that was not boiling over on the front-burner of voter concerns at a time of prolonged economic crisis.

2. The stimulus and TARP bailouts are not popular. They never were, even back when Republicans were pushing them, and are getting less and less so as it becomes clear that such policies are at best ineffective and at worst horribly counterproductive. During his first year in office, reports Congressional Quarterly, Obama got what he wanted from Congress a record-setting 97 percent of time, so it's not like he's simply muddling through with a bad hand. Yet the president (and by extension, the Dems) are tanking when it comes to handling the economy, both in terms of results and job approval. An NBC/Wall Street Journal poll from January 10 shows just 43 percent approving of Obama's economic policies, down from 56 percent a year ago.

Simply put, nobody believes that weatherizing vacant homes in Detroit or keeping an already bloated public sector on permanent life support is going to restart the economy.

3. The wars in Afghanistan and Iraq are not popular. Neither is Obama's foreign policy more generally. According to Gallup, Obama's reaction (or non-reaction) to the Christmas Day bomber had a marginally positive effect on the president's marks for handling terrorism, but it remains a fact that his positions on Iraq and especially Afghanistan are at odds with most Americans. Whatever latent peacenik tendencies his supporters and detractors assumed he harbored, Obama has doubled, or even tripled, down in Afghanistan while following the Bush-Petraeus withdrawal plan in Iraq. This may qualify as hope, but it doesn't count much as change. Especially since we've still got no real clear mission in Afghanistan, despite having been there for so long.

Obama's failure to define a coherent foreign policy is not his alone. At the end of the Cold War, the political class shrugged and almost immediately began to spend "the peace dividend" that came with a winding down of military spending as a percentage of GDP and the federal budget. Both George H.W. Bush and Bill Clinton cut relative military spending, as they should have. Where they, and Bush II and Obama so far, manifestly failed was in working to build a consensus of what U.S. foreign policy should be. We continue to pay for that failure in wasted dollars and, more damningly, wasted lives.

All is not ashes for Obama and the Democrats, of course. After all, a new AP-GfK poll finds that 49 percent of Americans want the Democrats to maintain control of Congress (just 37 percent are pulling for the Republicans to take charge). The GOP had its run at the top and the results were nothing less than a disaster on just about every front.

For those of us who don't paint our faces for either the red or blue teams, the tragicomedy of American politics is that each party looks pretty freaking awesome when compared to its counterpart. As bad as Bush was, Obama may well be worse. As rotten as Harry Reid and Nancy Pelosi are, just remember Trent Lott and Dennis Hastert. Now reverse the party affiliations and repeat. In their hour of darkness, all the Dems need to recall is that they are running against Republicans. And vice versa. Independents–the only reliably growing voting bloc in an electorate long since fatigued by two-party politics–are swinging violently against Democrats after throwing the Republican bums out in 2008 and 2006.

The hangover from the first year of Obama and the afterglow of Scott Brown's stunning senatorial upset can teach the major parties some real lessons: First and foremost, listen to the voters, especially voters who are calling for smaller government despite very tough times. In a recent ABC News/Washington Post survey, 58 percent say they favor smaller government that provides fewer services rather than bigger government and more services (38 percent want that). Moving in that direction would indeed constitute change. For a change.

The way back to voters' hearts is not through boosting the size and scope of government (something else that Obama and the Dems simply filched from the Bush-era GOP) but by unmistakably trimming some sails. Health care reform, such as it is, should consist of giving individuals more options via a deregulated, non-job-based marketplace where costs are made more transparent rather than less so. It works everywhere else in the economy and will work in health care. Regarding government spending, it means freezes all around and reductions in staff sizes at all levels of government. It means starting (and winning) a debate over ridiculous public-sector retirement packages that bankrupt whole polities for the benefit of a privileged few. With foreign policy, it means thinking through a coherent set of principles that will guide our interactions, and not just our reactions, in the world, focusing on trade rather than aid and warfare. It means fighting terrorism with amply-funded intelligence services rather than the misbegotten occupation of whole troubled regions.

The 21st century has so far been a tremendous disappointment to those of us who remember the end of the 20th. We know that today's leaders are dogs, but here's hoping they are not so old that they can't learn a few new tricks. Especially since we are the ones that will continue paying for their mistakes.

Matt Welch is the editor in chief of Reason magazine. Nick Gillespie is the editor in chief of Reason.tv and Reason.com.