Good-bye to Biden’s Social-Policy Agenda

&c. by Jonathan Chait

 

 

Good-bye to Biden’s Social-Policy Agenda

 

Photo-Illustration: Intelligencer. Photo: Chris Kelponis-Pool/Getty Images

 

The most depressing thing about the demise of the Biden administration’s social-policy agenda — other than the demise itself, of course — was the atmosphere of sheer economic illiteracy that surrounded it. Critics of the measure, ultimately including Joe Manchin himself, made arguments against it that were not so much misguided as lacking any elemental grasp of the basic principles involved (“not even wrong”).

The main argument used against Biden’s plan was that it would worsen inflation. Most of them scolded Biden for ignoring the sage insights of Larry Summers. Here, to take just one example, is conservative pundit Marc Thiessen: Biden signed an economic stimulus in March 2021 “despite warnings from even liberal economists, such as former Treasury secretary Lawrence H. Summers, who cautioned the president that his plan would ‘set off inflationary pressures of a kind we have not seen in a generation,’” Thiessen scolds. “The first rule of holes is: When you are in one, stop digging. So, when you are in a hole of spiraling inflation, the obvious first step is: stop spending.”

Later in the same column, Thiessen switches metaphors, scolding again, “But instead of trying to tamp down the flames, Biden keeps trying to pour gasoline on the inferno, with more spending and more free money from Washington.” The tone of this column, like many of the right-wing polemics, is one of incredulous condescension. Biden is such a blithering idiot that he is ignoring the obvious conclusion and instead digging holes and pouring gasoline or whatever.

Whatever the case against Build Back Better, this was not it. The American Rescue Plan did contribute to inflation. Its purpose was to stimulate demand by injecting deficit-financed spending into the economy. Build Back Better had a different purpose: to address social needs over a long period of time and finance that spending through taxation.

Spending financed by new taxes is not inflationary. That is why Summers himself endorsed Build Back Better. Yet conservatives spent the better part of a year citing Summers as the authority on why Biden’s long-term plans would cause inflation, oblivious to the fact that any economist, very much including Summers, would say otherwise.

In deference to public concerns about inflation, Manchin ultimately reshaped the last version of the bill as an anti-inflationary measure. The plan would have raised $1 trillion in new revenue (or reduced spending) and used half the proceeds for deficit reduction. This would not have had a large effect on inflation, but there is no question that, directionally, it would place downward pressure on prices.

Conservatives simply refused to acknowledge this aspect of the plan at all. In the end, even Manchin himself abandoned his own plan, which was designed in part to reduce inflation, on account of inflation, which is like deciding not to cut greenhouse-gas emissions because it’s too hot.

Playbook reports, via a source close to Manchin, “when the 9.1% inflation number was released Manchin just said to Schumer, ‘Why can’t we wait a month to see if the numbers come down structurally? How do you pour $1 trillion on that tempo with inflation?’”

Remember, $1 trillion is not the size of the spending in the bill; $1 trillion is the size of the revenue. That’s the pay-for aspect of the bill Manchin insisted on maintaining in order to fight inflation. The $1 trillion would not be poured onto economic growth. It would be poured out of economic growth.

In the end, Biden’s attempt to enact permanent social change died in an atmosphere in which the most ignorant fallacies carried the day.

The most important actors in American politics are parties, not individuals. And political parties are large groups of people that change slowly over long periods of time.

These facts are important to keep in mind because I think they help clarify many questions that people often find confusing. One of those is a mystery that has come up repeatedly: Why are Democrats running ads in Republican primaries designed to bolster extreme opponents?

I’ve read a dozen columns and op-eds about this phenomenon, all making essentially the same argument: Democrats are acting irresponsibly by trying to encourage Republican primary voters to nominate their craziest candidates. The conclusion of these columns is that the extremists might win. (Look at Donald Trump, whom everybody considered unelectable in 2016.) They generally follow this up by arguing that Democrats must not believe their own rhetoric about the threat to democracy posed by the far right — if they did, why would they take any steps to facilitate the most unhinged Trumpists gaining power?

I agree with the conclusion: It is irresponsible to help put the most authoritarian elements of the GOP in a position to hold office. But I certainly understand why Democrats are doing it, and it absolutely does not mean they don’t believe their own warnings about the opposition.

The reason, of course, is parties. A single individual can do only so much damage. Trump was unable to gain an unelected second term because he failed to build consensus within his party for a coup attempt.

Now, the more authoritarian the Republican Party gets, the more likely it is to make a different decision next time. That’s a good argument for why Democrats should try to arrest that slide into authoritarianism on the margins rather than accelerate it.

But if you’re wondering why Democrats are taking this risk, as so many pundits are, the answer isn’t that they don’t really doubt the GOP’s commitment to democracy; it’s that they have no faith in the party at all. Indeed, Republicans ignored, excused, or abetted Trump’s abuses of power throughout his presidency. Just one of them voted to impeach Trump over his gross misuse of authority when he leveraged American foreign policy to smear his campaign rival. A handful of them voted to impeach him after he launched a violent coup attempt — and then almost all of them backed off that position.

If you’re a Democrat, you probably think the Republican Party’s pro-democracy wing no longer has a veto. The party is tipping into authoritarianism. Democrats aren’t trying to line up races against the most extreme Republicans because they’re not worried about extremists but because they think the only way to protect democracy is to keep Republicans out of power.

Again, I think that strategy is a terrible mistake because margins matter. But the danger posed by the Republican Party is not confined to Trump or a handful of his acolytes. The danger lies in the Republican Party’s center of gravity.

Many conservatives who finally acknowledged after January 6, 2021, that democracy may not be completely safe in the hands of Donald Trump insist Ron DeSantis poses no danger to democracy whatsoever. Tim Miller recently joined this debate by posing a question: If DeSantis is less dangerous than Trump, why won’t he say so?

DeSantis has publicly refused to concede Joe Biden legitimately won the 2020 election. In the wake of the election, he floated a scheme to have legislatures appoint pro-Trump electors. He has encouraged beliefs that endemic voter fraud exists, publicly speculated January 6 was an inside job, and given supporters of the insurrection state-appointed posts. As Miller argues, “We are being asked, without evidence from DeSantis himself, to trust that he won’t support the kind of anti-democratic insurrection that he encouraged last time.”

The answer to Miller’s question can be found in a column by Dan McLaughlin of National Review. McLaughlin fervently hopes for DeSantis to capture the Republican nomination in any way he can. But he argues DeSantis “needs to do so in a way that keeps Trump’s most passionate supporters behind him come that November. It would be a Pyrrhic victory to defeat Trump in the way that Napoleon captured Moscow in 1812, presiding over the burned-out shell of a city surrounded by hundreds of miles of scorched earth in the onset of winter.”

Of course Trump’s passionate supporters are most passionate about the idea that Democratic election victories are inherently illegitimate. This belief is the foundation of the movement Trump is inspiring to take over the party at every level, from grassroots volunteers getting into election administration to candidates for senator and governor. Staying on their good side means placating their belief that Democrats engage in systematic, undetected voter fraud and that Republicans are obligated to fight back with a variety of tactics ranging from the formally legal (like having state legislatures override the vote, the plan DeSantis suggested) to outright violence.

DeSantis enthusiasts are not only failing to push him to denounce Trump’s authoritarianism, they are also openly encouraging him not to do so. And of course the logic is perfectly sound, as far as it goes. McLaughlin is right that DeSantis needs authoritarian Republicans, not only to win the nomination but also to win the general election. “Out of 340 Republican nominees for Senate, House, governor, attorney general and secretary of state so far,” FiveThirtyEight finds, “120 are full-blown election deniers (35 percent)” and “an additional 48 nominees (14 percent) have expressed doubts about the election.” That is, half the GOP’s nominees for those offices deny or doubt Biden won. Even defining democracy in the narrowest possible way — opposing Trump’s use of a violent mob to overturn the election results — there simply aren’t enough pro-democracy Republicans to form a winning national coalition.

There are three reasons to treat DeSantis as a serious threat to democracy. The first is that he subscribes ideologically to a strain of right-wing thought that prioritizes market outcomes over democracy (he devoted an entire book to this idea). The second is his record in Florida, ranging from a Kafkaesque poll tax to his Orbanesque bullying of Disney, which has done more to erode democracy than any sitting governor has managed.

The final reason is his core political strategy of refusing to break ranks with the right. Even when activists pick a fight DeSantis would not have selected, he throws himself into it regardless. The “Don’t Say Gay” bill is a prominent example: Christian conservatives designed this bill, and DeSantis merely went along with it.

DeSantis has built his political identity on a promise to side with the right in every battle against the left. The battles many of them want to fight now are against the democratic system itself.

To believe that DeSantis is not a threat to the system, you have to believe he will abandon the “no enemies to the right” posture that is the foundation of his political strategy. What’s more, you have to believe that, after DeSantis refused to condemn anti-democratic steps taken to secure power for Trump, he would condemn such steps taken on behalf of himself.

Is that possible? Sure. It seems far more likely, though, that the reason DeSantis won’t deny he is a threat to the republic is that he is, in fact, a threat to the republic.

Political leaders mold themselves to the coalition that sustains them. Their choices are bounded by what is acceptable to their supporters. In that coalition, what counts as mainstream thinking is open to legal avenues to subvert democratic processes, and the ideas on the edges of the coalition — but still inside the tent — flirt with political violence. DeSantis’s strategy is to leave in place the authoritarian-led coalition built by Donald Trump.

A recent economics paper found that unionizing workforces reduces product quality. The authors measured product quality by “product recalls mandated by the FDA, the Consumer Product Safety Commission and the National Highway Traffic Safety Administration,” a metric they chose because it is objective. They found firms in which union elections passed by a narrow margin subsequently had more product recalls than ones in which union elections failed by a narrow margin.

I think liberals can still believe unions play a positive social role without disputing the factual basis of this finding. One question here is the mechanism that leads unionization to harm product quality. The paper’s author’s suggest it is the financial strain caused by higher labor costs. Alex Tabarrok proposes a different mechanism: Having a union prevents firms from disciplining or firing ineffective employees.

Tabarrok’s hypothesis seems persuasive to me. But, assuming it is correct, what does it tell us? It may be in the interest of individual firms to block unions and maintain the ability to weed out unproductive workers. But it hardly follows that it is in the interest of society as a whole.

A firm can fire its way to a more productive workforce, but an entire country can’t. Creating a more productive workforce means improving education, training, nutrition, health care, transportation, social care, and so on.

Now, you can believe that some sectors are especially important and need to have the ability to remove ineffective workers. I would say policing and teaching are the two such occupations. The social damage done from bad cops and bad teachers (especially in the case of low-income children, whose parents usually lack the resources to compensate for inadequate teaching) is too great to let these occupations be burdened with subpar employees. I’ve written in the past about the problems caused by union protections that make it difficult or impossible to fire the worst of the worst.

But in the absence of an economywide strategy to make all workers productive — an ambitious, if not utopian, project — we are going to be stuck with some unproductive workers. Having them work somewhere is better, in most cases, than having them work nowhere. If unions are protecting their ability to hold down a paycheck at a factory or a warehouse or a coffee shop, that is not a negative social function. It is a vital social function.