The Democrats are Moving Left, and the Real Work is Just Starting
Do Democrats running for office for the first time have their act together when it comes to economics? Writer Ryan Cooper is skeptical, writing at The Week that “The Democratic Party is flying blind on economics.” He interviewed eight candidates for office and found that while there was “a strong consensus on social justice issues like gay marriage, transgender rights, and police brutality […] the party as such makes virtually no attempt to put forward a consistent party line on economic issues.”
Cooper’s concerns derive from the candidates’ lack of knowledge or agenda to deal with a future recession. Cooper believes that the “greatest political-economic risk for Democrats” is taking power in a recession like President Obama did. He finds that the candidates he talks to are unfamiliar with “the argument for potential stimulus to prioritize employment over deficits” and blames the Democratic leadership for that. While Democratic leadership have embraced becoming “academic jargon-wielding crusaders for the downtrodden” on “social justice politics”, there has “been no such thorough process on political economy.”
I do not think this is true. My experience with actual campaigns on the ground is similar to that of political scientist Theda Skocpol, who told David Leonhardt “I just don’t see a huge set of divisions in the Democratic Party. They’re all talking about economic issues.”
Before I start I want to emphasize that this isn’t a debate over whether the Democrats are #actually Good or #actually Bad now. The important thing to do is to correctly understand the vulnerabilities that an economic agenda is going to face in the future, and if we are still debating whether anything is happening we will miss both the forest and the trees at the same time.
Is it true that the Democrats do not “put forward a consistent party line on economic issues”? I went to the websites of each of the candidates and just starting copying and pasting phrases from their issue page into a spreadsheet. I also added how much of the vote Hillary Clinton got in the district. I included Liz Watson, who beat a candidate Cooper interviewed in his piece. Let me know if you can see any consistency here:
See any patterns? Every candidate but one has expanding Medicare on their website, either as a public option or as single-payer. All but one has a living wage, with the majority explicitly stating $15 an hour as the goal. Some version of free college, most notably the “debt-free” model, was represented across the board.
I grabbed these since they are worlds I know best and were easy to find. But the left flank was aggressive across the board. There was no demonizing immigrants. There was a consistent focus on jobs. But it goes even beyond that. Let’s stick with Liz Watson, since she defeated the more progressive candidate in IN-9, where Hillary only got 34% of the vote. She beat the progressive candidate, so she must be pretty squishy, right? Liz Watson states “On the whole, however, charter schools are a slippery slope into a two-tiered system of education. That’s why, as a policy matter, I oppose any further expansion of charter schools.” That’s a start.
When it comes to Social Security, Watson states that “If you elect me to Congress, I will (1) Oppose raising the retirement age. (2) Support cost of living increases in benefits and oppose any reductions.” What should we do then? “We can maintain and increase benefits by adopting Senator Bernie Sanders’ plan to ‘scrap the cap’ that limits what higher-income workers contribute through payroll taxes, so that everyone pays the same percentage of their income toward Social Security.” This is a world away from Barack Obama, who famously failed to get Republicans to help him cut Social Security.
Awkward Politics of Recession Busting
Cooper is focused on the candidates’ lack of full employment knowledge. But it is sitting right there. Each candidate was focused on good jobs, even with unemployment under 4 percent. Wages haven’t risen as unemployment continues to fall. (One of my favorite parts of Jobs Day is the writer Malcolm Harris taunting economic commentators on nonexistent wage growth using Marx. He’s not wrong.) So the jobs and wages focus really is a commitment to addressing full employment and its current weaknesses, just not using that language.
Recession busting as a political policy is awkward since it is about describing something you may do if something else happens in the future. Candidates are talking about doing infrastructure now, rather than doing it further into the future. Indeed, if infrastructure is such a good idea, why not do it now rather than later? (This is a version of Matt Bruenig’s critique of providing care and climate work through a job guarantee, since the provisioning will only fully be available in recessions.) Can you imagine the chant?
What do we want!
Good infrastructure jobs!
When do we want it?
Not right now, the projects aren’t good enough to justify doing them at full employment. We want them when their NPV goes positive from low rates and unused capacity!
I actually love this chant, it genuinely speaks to me, and we should be compiling such projects for the future. But it’s not a good chant.
And though I would love it if candidates worked setting long-term interest rates and coordinating QE purchases with Treasury debt issuances on the maturity side into their speeches, I think that’s even a worse way to get a crowd excited. Keep talking about jobs, and the role the public can play in creating good ones, because joblessness is the metric that people will experience the next recession through.
The Actual Debate
The Democrats are moving left on economics. In which ways and to what extent is an open question. And that doesn’t mean Democrats are “good”, or that everything is solved, or anything else, really. But it does mean the actual debate and analysis we need is very different than before.
Contra Ryan Cooper, I’m more worried about the Democrats taking power with the economy booming, and inflation and interest rates taking off. The Democrats really didn’t attack the notion of debt itself while opposing the Trump Tax Cuts. They instead attacked what it was being used for. But if rates start to rise it will be harder to keep this line. Note that this may or may not happen; we may be in for decades of secular stagnation like Japan. But if we aren’t this will be a major challenge. The biggest problem will be raising revenues. Democrats are not yet ready to ask everyone to pay more in taxes for more services. Though taxing the rich properly would get us far, Democrats will need to get to broader taxation if they want the most ambitious agenda.
They will also have a problem with prioritization. There is so much moving that the ordering matters quite a bit. If Trump had gone with tax cuts first, removing the individual mandate, it was more likely health care repeal would have happened. (Indeed, this is part of why conservatives are considering one last push on ACA repeal this year.) I have no clue on how to manage the prioritization and ordering, a debate that will have to happen with many stakeholders. But we should be discussing this now.
There’s also the issues of scale and tradeoffs. Is it better to rapidly expand Medicare as a public option at nearly zero cost, or take on the difficult challenge of mandatorily moving all people with private insurance into Medicare via single-payer? Should we be providing more public services consistently and at high-quality, or providing more public jobs, which will come and go with unemployment? There are tensions here that will become clearer as the debate moves on.
There’s more, no doubt. The left is moving the debate. Unfortunately it means that the work is going to get harder. But that is the best kind of problems to have.
For fun, when it comes to candidates saying bad macroeconomic things while running for office, I offer:
Now, what I should like to do is to reduce, in so far as possible, the problem of our national finances to the terms of a family budget […] For over two years, my friends, our Federal Government has experienced unprecedented deficits, in spite of increased taxes. […] A powerful cause contributing to economic disaster has been this inexcusable fiscal policy and the obscurity and uncertainty that have attended and grown out of it. There it remains for all to see — a veritable cancer in the body politic and economic.
- Franklin Delano Roosevelt, Campaign Address on the Federal Budget, Forbes Field, Pittsburgh, Pennsylvania, October 19, 1932.
