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I agree that it's a clear message. The messaging the last time Trump won the election was that the electoral college was broken, Trump lost the popular vote, Americans deserve better.

8 years later, after all of this political baggage, prosecution, and media repudiation the Democrats managed to lose in resounding manner – not just the electoral college, but the senate, house, and popular vote.

This is after what is arguably a great Biden presidency, economy-wise. The Democrats have centered their entire identity for the last 8 years about being anti-Trump. There are no bright spots in the results for them, no messaging that they can hang their hat on, and build on going forward. From a base building perspective, this is brutal. The next election is square one for them.

The Democrats never seem to do much about the system when in power.
If they'd done something they would've lost more. Voters, who on average are near retirement age, hate it when you do anything because they think it'll affect their retirement.

In this case they were blocked by Manchin/Sinema from anything like filibuster reform, but they did get some big important economic reforms in.

You nailed my biggest complaint.
My new unhealthy conspiracy theory is democrats like being perpetually in the minority where they can talk a good game but don’t actually have to follow through on anything. That’s why they always tack right and try to compromise with people who call them enemies and groomers and demons. “We’ll welcome them into our cabinet” never sat well with me in the era of Trump.
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To me it seems like Democrats just failed to listen to their constituents, and being one who wanted Bernie Sanders to have some chance at running in 2016 and 2020, I think this is the reckoning of that more than anything. The Democrats have ignored their own base and this is what happens when they pander to signals from everywhere else.