The difference between the Money Party and the People's Party is pretty much a continuation of the initial divide between the Founding Fathers. Hamilton and those who favored a republican government emphasized the necessity to centralize power and consolidate it in the hands of property owners, who had a much bigger stake in the country that the landless. Jefferson and those who favored a more open approach to democracy like Thomas Paine emphasized decentralization of power and more equality in the distribution of wealth, fearing that the republican form of government was too close to aristocracy. This was not a paranoid idea, since many had wanted to the victorious Washington to be king instead of president, but Washington, to his enduring credit, spurned the idea.

Jeffersonian conception of democracy was elaborated by Andrew Jackson and it is known as Jacksonian democracyJacksonian democracy. Jacksonian democracy emphasized government for the common man even more than Jeffersonian. Both Jefferson and Jackson recognized the danger to democracy of centralizing governmental power and consolidating of land ownership, industry and finance in the hands of a few wealthy and powerful individuals who "represented" the people's interests in name only, either themselves directly or though their proxies.

The classic battle between the forces of centralization and decentralization was fought at the time of the American Civil War, which was fought for economic reasons chiefly (as all wars are) but the political reasons was the issue of states' rights over federal prerogatives.

Abraham Lincoln, incorrectly claimed as the "founder" of the Republican Party, enunciated the essence of democratic government as "government of the people, for the people, and by the people." The Republican Party became the party of business under President William McKinley and it largely came to represent the interest of the dominant wealth of the Northeast US. The Federal Reserve was created in 1913 as a means of consolidating the US banking system under the financiers, who also had strong links to British and European financial magnates, forming the nucleus of what would emerge as a "shadow government," largely in control of the most powerful political and economic force to emerge in the history of humankind.

The McKinley era made the US elite — financiers and industrialists — the dominant force in American politics until the Great Depression, when they lost "the mandate of heaven" due to greed.

Interestingly, FDR was a member of the Northeast elite, who "betrayed his class" in the interests of the country by engineering the New Deal, transforming the US into a mixed economy with a heavily socialistic counterbalance to naked capitalism under the control of the elite, and especially the financiers who allocated capital. Since the advent of the New Deal, the countervailing forces have been engineering not only a return to power but also an overturn of the New Deal itself and a return to naked capitalism under the control of the elite.

The problem was that the New Deal was very popular with the people, and FDR was not only a hero for rescuing the people from the Great Depression but also defeating the Axis powers that sought to dominate the Allies ("the Free World").

After the passage of civil rights legislation by LBJ and the Democratic congress, Nixon and his advisers came up with the brilliant idea to mount a reactionary campaign that would strip the South from the traditionally Democratic fold. The brilliance of the idea was that the GOP as the party of business and finance would masquerade as a populist libertarian party, using such wedge issues as racism, overt and closet, as a cover for its dedication to neoliberalism, neo-imperialism and neocolonialism. This tendency climaxed with Reagan and the denouement as taken the US to the present moment, when the consequences of this ideology are now manifesting.

In the process of this, the Democrats were undercut by the Republican's taking on the populist mantle of being the "values party" instead of the party of big business — a party espousing conservative "traditional" values, religiosity, and security, together with apparent decentralization by advocating low taxes and small government. Outgunned monetarily and outfoxed rhetorically, the Democrats abandoned their principles and became moderate Republicans as the GOP moved was pulled further right to maintain its coalition of rednecks, holy rollers and suburbanites co-opted by cheap gas and easy credit, who believed that they too were or at least could be rich.

The result is that the presently existing Democratic Party is a mixture of actual democrats and bogus ones. The bogus democrats show by their behavior that they are actually moderate Republicans instead, and some blue dogs vote with the GOP on decidedly conservative issues that are popular with their constituency but which are anti-democratic.

The upshot is the that the Overton window has moved so far to the right that now there is a rightist party and a moderately right party, with little significant representation on the left other than a few voices such as those of Kennedy, Feingold, and Kucinich. Most of the Democratic Party leaders at present are not democrats, or are afraid to act like democrats.

The current financial debacle has suddenly changed the turf. People are rightfully outraged about the financial rip-off that is being engineered at their expense. Interestingly, there was little public outcry at stolen elections, being lied into an illegal war, the assumption of dictatorial powers by the president, the packing of the court with right-wing ideologues, the erosion of constitutional rights, even the use of torture, which is widely considered a being the most abhorrent act that a government can engage itself in. But hit people in the pocketbook and watch the rage burst forth. Whatever.

Now the US finds itself in the situation were those who were the most ardent supporters of "free market capitalism" are asking Congress to ratify a fascistic takeover the financial system (make no mistake, this not "socialism"), with the additional proviso that there be no oversight or recourse. Naomi Klein is correctly warning that this is more disaster capitalism at work, trying to make lemonade from the lemons that it has been growing on a field of greed.

Are there enough democrats in the mold of Paine, Jefferson, Jackson, and FDR to turn this around. Because if there are not, democracy in the US is in danger, and as a result of the unwinding of the consequences the existing Democratic Party will cease to exist because it will not only have have lost touch with its democratic base but also lost this base.

Stirling Newberry called this a constitutional moment. It is.

Barack Obama, Harry Reid, and Nancy Pelosi, are you listening?

Update: Obama: No blank check

Pelosi Rejects 'blank Check To Wall Street'

Dems say they won’t get fooled again

Apparently they got it. We'll see when it comes time for the vote.