But I digress. Your proposed system would also face problems of majority will over the rights of the minority, because without a third-party body bound by law and an acknowledgement of basic human rights to resolve disputes you will not have an arbitrator and if need be enforcer to make sure that the rights of the minority and individual are upheld. By handing powers over to unregulated local authorities not bound by a global law you open up severe opportunities for favouritism, nepotism, racism, sexism, and all kinds of discrimination. Believers in Capitalism like to say that their world view is the only viable one because it is based on the more reliable darker sides of our natures; well, if that is the case, I would rather have an impartial law handle my case than some narrow-minded collection of people encouraged to exercise the worst aspects of themselves in society.
In a material world we need materiel solutions to the problems of inequality, and no bleeding heart or disembodied limb is going to solve them for us on our own. This argument also places far too much emphasis on the political power of the state and ignores the tyranny that economic powers have over those who are subject to them; one dollar, one vote will always favour the person with the most dollars, while one person, one vote forces equality. It is difficult to maintain a true democracy, but it is definitely an endeavour worth pursuing, and only then can the common people actually be engaged. I will not claim we have such a system in place now, and the United States is certainly not a shining example of a working democracy, but that does not make the concept invalid.
As for the policies you mentioned, almost all dealt with existing government institutions, and all of the changes are perfectly acceptable from the view of a social liberal. You will notice that Obama has refused to do such things as nationalize floundering private companies and firms under direct government control; even Obamacare simply puts regulations on the health insurance industry and offers certain assurances, and does not try and offer universal care directly as is attempted by the NHS in Britain or the provincial health services offered in my own country. Obama places a huge amount of faith in the free market, even in the banking industry which he gave so much money to in order to keep operating through private hands. If you think these paltry moves of regulation and limited social spending (and lets keep in mind that government spending in total has gone down successively under Obama) make him a far left radical, wait until you see what a real socialist would do.