This should have been a favorable electoral year for Democrats—they were defending fewer seats in the Senate, had well-respected and entrenched incumbents facing reelection, had shown an ability to outraise Republicans in the money game and were coming off landslide victories with major gains among young voters, independents and the fast-growing non-white voter population.

Now, less than two months from that election, Democrats face a cataclysm. The House is on the verge of GOP takeover and even the Senate is in play. How did Democrats fall so far, so fast?

Bipartisanship, not legislating

The Obama administration, from day one, seemed more interested in bipartisanship for the sake of bipartisanship than in passing the best possible legislation. From watering down the stimulus and larding it up with non-stimulative tax cuts to giving away the store on health care legislation, the administration and congressional Democrats were quick to surrender key provisions to Republicans negotiating in bad faith, without ever securing votes in return.

Rather than ram through a healthcare reform bill when they had 60 votes, Sen. Max Baucus (D-Mont.) let a cabal of Republicans led by Wyoming Sen. Mike Enzi delay any resolution for over a year. By dragging things out, Republicans were able to effectively halt Democratic momentum, give the Tea Party folks an opportunity to organize in the summer of 2009 and create misinformation and lies (remember death panels?) to help sink Democratic numbers.

Republicans rightly saw the desperate Democratic need for Republican approval and assent as weakness, and used it to erode Democratic support.

Afraid to pick fights

From day one, Senate Majority Leader Harry Reid (D-Nev.) whined he couldn’t get anything done without 60 votes; Sen. Al Franken (D-Minn.) wouldn’t be seated for several months. Instead of fighting for high moral ground — that public sentiment had given Democrats a mandate to govern—Reid told Republicans they had carte blanche to obstruct. The previous majority leader, Bill Frist (R-Tenn.), didn’t bother with worrying about 60 votes.

Yet we saw the results time and time again—the House would pass good legislation, only to see it die in the Senate, with Reid shrugging his shoulders and meekly pointing to the 60-vote threshold. Rather than surrender so quickly, why not pick a few fights with Republicans to show the public who was fighting for them? For example, the Latino community now blames Democrats for the lack of progress on comprehensive immigration reform. Reid simply shrugged his shoulders and said, “We don’t have 60.” But why not have a vote, lose the vote and then wave the roll call as a call to arms? Show Latinos which party is voting for their interests and which one against it.

Strategic losses would effectively show Americans who was standing in the way of progress, and Democrats could use those roll call votes in their reelection campaigns.

The economy

All of the above would be academic if boom times had returned. Afraid of Republican attacks on the deficit, Democrats have been frozen into inaction on the economy.

As it turns out, sitting around and hoping for the best wasn’t the best approach. As a result, as the economy teeters on the edge of a second dip into recession, voters still furious at Republicans for getting us into this mess are set to return them to power.

After all these years, it’s still the economy, stupid.

Moulitsas is founder and publisher of Daily Kos and a columnist at The Hill.