By John Payton:

“It was the best of times, it was the worst of times.”  That is the famous first line of Charles Dickens’ A Tale of Two Cities. Dickens was talking about the French Revolution, but today we are experiencing a similar set of conflicting emotions:  exhilarating excitement coupled with debilitating anxiety. The challenge is to see that we take advantage of the new possibilities born from that excitement to address some of the long-standing problems in our society and in our economy.

John Payton

Just four years ago, after President Bush’s re-election, there was despair in progressive circles. Iraq, Guantanamo, Abu Ghraib, the war on terror, extraordinary renditions, the systematic destruction of the Civil Rights Division in the Department of Justice, the growing and unprecedented gap between the super wealthy and ordinary folk — all of this and more led to cynicism and despair. To have thought then that Barack Obama, a freshman Senator, would four years later launch a captivating campaign that would energize not just young people, but a whole range of dispirited people, that he would raise more money than any candidate in history, that he would defeat Senator Clinton for the Democratic nomination and then win a decisive victory over Senator McCain . . . well, very few people considered it as a realistic scenario.

But Barack Obama did win and did win decisively.  Elected by all of the people to be President of all of the people. It was an extraordinary political achievement that has enormous significance for the entire country. It promises new possibilities for our democracy and for racial and social justice in our country.

That is the exhilaration.

The anxiety is nearly as extraordinary. We cringe as we listen to the news now.  The week before last, we learned that Citibank was on the verge of collapse, and had to be rescued by a federal bailout. Astonishing. Other banks have already collapsed or been absorbed. We already knew that Wall Street was in ruins. We have known for a while that Detroit was in trouble. But we did not think that General Motors and Ford and Chrysler were close to bankruptcy and desperately seeking their own federal bailout.  Fannie Mae and Freddie Mac have been taken over by the Treasury Department.  In other words, they too were bailed out.

The government has launched a series of rescue plans, none successful and each associated with staggering sums of money. What we first thought would be a huge $700 billion rescue plan has now turned out to be, according to a calculation by the Associated Press, over $7 trillion either allocated or obligated by the Treasury Department or the FDIC or the Federal Reserve. Meanwhile, on the ground, people are losing their homes, their jobs, and their life savings. Retirements are being postponed or cancelled.  Local governments and schools are seeing their revenues and budgets dramatically shrink. Restaurants and small shops are on life support. There is a palpable sense of fear.

The problems with our economy were evident long before the financial collapse. And those problems included danger signs for our democracy. We already had seen inner cities in crisis because of white flight and the related loss of jobs and the tax base they represented. The public schools in those communities were already in trouble – fewer than half of the students served by those schools graduate. This failure of the schools had the result of making it less likely that these students would be able to thrive in our economy or in their communities. As a consequence, there are growing numbers of people in these communities that are living outside of our economy. These realities are threatening to our democracy. This was happening at the same that we saw unbelievable wealth and luxury. That gap was evident to all, but was largely ignored.

And now this further collapse.

These circumstances present possibilities. But those possibilities have to be incorporated into the planning of the Obama administration. Yes, the unregulated greed that was the ruling principle for the last several decades must be replaced. The challenge will be to see that the economy is strengthened for those communities that have been most devastated – inner cities and poor communities. The US Treasury and the Federal Reserve have more power than we would ever have imagined; they have something close to plenary power over the economy.

How that power is applied will be critical in healing our economy. But it will do much more than that – it will also help determine if our democracy is strengthened. The point of rescuing the Citibank’s or the General Motors is to make sure that our communities are rescued. And, given the critical state of many of our inner cities, special attention must be paid to this priority.

So far, President-Elect Obama has received high marks for how he has organized his transition and begun rolling out his new administration. The economic team is largely identified, and the initial reviews are favorable. But here’s what is worrisome: there seems to be no focus on how this unprecedented financial and economic power will be used to make sure we increase social and racial justice in our society. There seems to be no concern about the health of our democracy and not just the overall health of our economy, as though there were no necessary relationship. There is.

We proudly proclaim ourselves a democracy. In remaking our economy, it is crucial that the teams assigned include members who can pay careful attention to the social justice and economic justice consequences of their actions. Our democracy demands nothing less.

John Payton is President and Director-Counsel of LDF.