• Push for military downsizing: Dems should capitalize on the government waste theme and extend it to the bloated military. Dig up all of the relevant global stats on the ridiculously outsized US military footprint, and pound it home that shrinking this down is the responsible thing to do. Dems should team up with Republican allies like Ron Paul to add bipartisan credibility to this endeavor. I don't think that liberals will find a more conducive time to get this message across.
• Get tough with the Fed: the Federal Reserve contributed plenty to the current crisis, especially with Alan Greenspan's refusal to see the housing bubble for what it was. Anti-Fed sentiment is currently high, but the Fed certainly isn't going to be abolished any time soon. So Obama and leaders from both parties of Congress should make it clear that the Fed needs to start taking action to get more money into the hands of local banks and businesses. How can they do this? I really don't know. But clearly, the Fed's flooding of the big banks and investment companies with cash is not resulting in this money filtering down to borrowers at the local level. Our politicians should play hardball with the Fed, and demand that money be directly loaned to local credit unions, thrifts, and other small-scale financing organizations. The public already sees the Fed as a kind of secretive arm of Wall Street. Dems and Republicans should threaten to turn the Fed loose to the dogs of popular rage unless their policy path is altered to aid the struggling masses.
• Pass Real Mortgage Relief: The current Republican script is calling for everyone to sacrifice for the health of the American economy (of course, in my cynical opinion, they really don't mean this. When they say 'everyone,' they don't actually mean the rich and powerful. They only mean the 'everyone' who did something wrong in their eyes, like taking out a bigger mortgages than they could afford, or applying for a ninth credit card to pay for groceries). But taking them at their word, let's say that they really do mean that everyone should sacrifice. Well then, banks need to take a hit and repeg their mortgage holdings to existing property values. Yah, I know that this would result in massive losses for the banks, and they would throw everything they have at stopping it. And Republicans could likely play it off as class warfare or some other gobbledegook. That's why the Dems should aggressively push it as a proposal to restructure all outstanding mortgages, not just for people in trouble. One of the biggest talking points of the Tea Party and its followers is that good, upstanding taxpayers are footing the bill for the deadbeats (think of the ubiquitous HONK IF I'M PAYING YOUR MORTGAGE bumper stickers). That's why this mortgage restructuring should be pitched as something for everyone, paid for by the irresponsible and reckless Wall Street banks that got us in trouble in the first place. And as an added gain, the banks writing down their mortgages could recoup their losses by a program of staggered federal tax cuts. This would have the added rhetorical bonus of fitting in with the overall Tea Party tax-cutting program. Again, is this likely to happen? No, but Dems could make real hay  with it in the eyes of the public, and might be able to at least leverage a different, lesser deal.
• Beef Up the Small Business Administration: Public discourse in the age of the Tea Party is all about small businesses. They are praised as the biggest job creators, as the entrepreneurial lifeblood of the nation, and as the incubator of the crucial American values of hard work and sacrifice. Is some of this overblown? Of course. Most small businesses fail, not due to draconian federal taxation, but simply because they are poorly run. Or they're just bad ideas in the first place. But in any case, the exaltation of small business will continue, and liberals should take advantage of this opportunity by explicitly calling for the transfer of government largesse from Big Business to Small Business. In other words, join in with the Tea Party crowd in highlighting the massive troughs of pork and subsidy that go to prop up large corporations. Make a specific plea for these subsidies to be cut in half, with the remaining being shunted directly to the Small Business Administration, to help local companies thrive. This should be paired with the above point on pushing the Fed to aid small business. Again, this might be portrayed as class warfare by some, but if Dems continually point out the qualitative difference between Big and Small business, then they should be inoculated.
• Empty the Prisons: Say what? Yah, I know, it's weird. But the true unemployment rate of the United States is masked by the steady rise in the proportion of our citizens who are incarcerated (we're currently the world leader in imprisonment). As mentioned many times in this blog, our prisons are largely dumping grounds for the economically superfluous. If you include even a conservative estimate of the economically-imprisoned, then we're really looking at a full unemployment rate of close to 20%. Dems should put a full-court press on portraying our prisons as massive government waste, as corporate subsidy through non-conventional channels. Pound home that these people need to be returned to the wider society so that they can contribute economically, instead of being a drain. And in the spirit of paying for every spending proposal, Dems should take existing prison budgets and come up with a five-year plan to move 75% of that money to creating bridge programs for getting convicts back into the mainstream. And again, these programs could be dovetailed with the small business initiatives above.
• Massive National Zoning and Rent-Law Changes: Think of the condition of many of our cities and towns. They are hollowed out, with empty houses and storefronts everywhere. In Detroit, large sections of the city are abandoned completely, returning to scrub grass and wild sumac. With the disappearance of our manufacturing and farming cultures, the socioeconomic infrastructure that went along with these ways of life is all but gone. But our laws surrounding land usage and zoning have essentially stayed the same, so that it has somehow become, surreally, more lucrative to leave land and lots empty, instead of lowering rents to get tenants in. In almost every case, the landowner or landlord can make more money from depreciation tax breaks than from simply lowering the price. This becomes a self-reinforcing feedback loop that spreads disuse and neglect to entire regions. And before you know it, there's a development dead zone, and nothing can be brought back at all, even if there were some demand. This needs to change, and it could be changed, relatively cheaply. Washington should work with states to craft unified policies on land use, wielding eminent domain to get their programs enforced. Unused land, lots, and buildings should be turned loose to public lottery if improvements go unmade, or if property sits vacant for a relatively short period of time. Regular citizens should be able to win these properties (paying small, nominal processing fees), and then they should be hooked into the small business programs mentioned above to help them occupy the new areas in an economically-viable way.

Well, that's enough for now. But you get the drift. Democrats need to find a way to harness the rising popular desire for downsizing, tax cutting, and budget busting. They just need to turn the smaller pools of money toward endeavors that actually stand a chance of helping people, instead of just throwing them on the pyre of Ayn Randian insanity. At every step, Dems should work with sympathetic conservatives, including Tea Partiers, to get real proposals on the table. And Dems should be ready to plead their case in every public forum possible, showing how they have a true decentralizing agenda that will work. Liberals should portray themselves as the smart devolvers, with things of real value to contribute to the one-sided Tea Party platform.
 
Of course, this will necessitate Obama and his buddies finally giving up the idea that economic growth will someday magically kick in and return us to the former life of full employment and maximum consumption. That truly is a Utopia, in that it exists nowhere.