Yet, as this column noted at the time, the unspoken subtext in that election year was the growing privation of so many Americans as the economy creaked and groaned and spilled jobs. The anecdotal evidence was piling up: in their real lives, more and more Americans were hurting. People were seeing their life savings disappear, and sinking into the credit card debt tunnel. People were losing their homes.

‘The mark buss’ in September with the collapse of Lehman Brothers, of course, and suddenly all everyone was talking about was the elephant. In vain did McCain/Palin continue to try to mine Obama’s race for what they saw as its sinister potential, painting him as a creepy outsider and a consort of terrorists. Wall Street was coming crashing down, as dramatically as the Twin Towers on 9/11, and the rubble would soon be wrecking Main Street as well. With the Bush administration peremptorily demanding Congressional authorization of bailout sums unheard of in the history of the republic, who had time to care whether or not Obama was on too-cordial terms with the likes of William Ayers?

The political denouement came quickly. McCain was revealed to be a poseur and a financial illiterate (and Palin to be just illiterate, and mean-spirited, to boot) and Obama easily rode his charisma, his team’s organizational skills, and his aura of level-headed competence to an emphatic victory on November 4.

So it’s ironic, to say the least, that, not five months on, the same elephant — now blindingly illuminated by the MSM — should take the Obama administration by surprise. But that’s in fact what happened last weekend. The giant insurance firm AIG, whose financial tentacles stretch halfway around the world, had for some time been in collapse mode, and as such had already been the recipient of $170 billion in government handouts when news broke that it had used part of that huge taxpayers’ donation to reward its failed executives with a total of $165 million in bonuses.

Unsurprisingly, Americans hit the roof, and members of Congress, jumping on the back of their constituents’ rage, swore to get the bonus money back. By Thursday, the House had passed a controversial bill imposing a 90 per cent tax on well-off employees’ bonuses at firms that, like AIG, had received government bailouts of over $5 billion since the beginning of the year.

What was mightily surprising, however, was that the Obama administration didn’t see the tsunami of fury coming. On last Sunday’s talk shows, both Treasury Secretary Tim Geithner and Obama’s Senior Economic Advisor Larry Summers opined, much too calmly, that there was no legal way for the government to undo AIG’s  bonus contracts.

Worse, Obama himself didn’t react publicly to AIG’s brazen looting of the public purse until after the public had, and when he did, his belated expressions of outrage were ill-supported by his, as always, laid-back manner.  Obama actually read his denunciations of AIG’s actions (leading the NYT’s Maureen Dowd to remark scathingly, “Barack Obama even needs a teleprompter to get mad.”). At one point, after a short coughing fit, he even tried a really bad joke, quipping that he was “choked up by anger.” His audience laughed nervously.

(By contrast, Republican Senator Chuck Grassley was closer to the mood of the nation when he suggested that AIG’s executives should take a leaf from Japanese tradition and “commit suicide.”)

When on Monday Obama, his hand forced by public sentiment, undercut his financial team’s professions of impotence by announcing he had directed Geithner nonetheless to find a legal way “to block these bonuses,” the MSM sensed a crack in the administration’s fabled solidarity. By mid-week they’d successfully redirected attention from AIG’s sociopaths in suits to the question:  who in the administration or Congress had authored the bonuses loophole, even as AIG became an 80 per cent government-owned firm?

The accusing fingers pointed at Senate Banking committee Chairman Chris Dodd. Dodd admitted to adding language to the federal stimulus bill to ensure that extant contracts for bonuses at companies receiving federal bailout money would be honoured — then tried to pass the buck, saying he had done so at the urging of Obama’s Treasury Department.
It didn’t get him off the hook. On Friday the NYT reported that “anger is erupting against Mr. Dodd…whose stature in Washington once reflected the state’s beneficial ties with the financial industry. Now, he finds himself a symbol of the political establishment’s coziness with tainted corporations.” The Times story kept its worst lash for last, ending by pointing out that AIG had been “a big campaign contributor to Mr. Dodd.”

Pressure also began to build for Geithner to resign. Obama was forced (and it was a measure of his predicament that most everything he did in the first days of last week was forced) to declare his “complete confidence” in his Treasury Secretary.

Then, however, beginning on Wednesday, Obama suddenly imposed himself on the narrative, embarking on a campaign-style blitz of town hall meetings and media appearances, including one on Jay Leno’s ‘The Tonight Show.’

His goal was only partly to try to re-direct Americans’ focus from the current outrages to a promised new regulatory regime that would prevent them in future. More startlingly, Obama, with mysterious but manifest confidence in his own popularity and political skills, was setting out to undercut his Republican foes: to sell his ambitious and revolutionary budget, over their heads, directly to their constituents.

It’s an audacious (sic!) strategy. If Obama can pull it off and, ultimately, force a straight up-and-down vote on his budget (which would sidestep the threat of a Republican filibuster), he will reign supreme over the Congress for the foreseeable future. If he fails, his whole agenda could crumble; and he may yet turn to see the accusing fingers over the AIG affair pointing at him.