Having written a nine-point Common Sense Democrat Manifesto, it now falls to me to explain in greater detail what I mean.
I chose to start the list with a point about economics, because I really think there is a profound and fundamental divide between the Slow Boring perspective, which is to complain about the Democratic Party’s positioning on cultural issues because I want to see Democrats win elections and help poor people, and the Free Press perspective, which is to complain about Democratic Party positioning on cultural issues because they want to see Republicans win elections and cut rich people’s taxes.
But I also put it first because I think some sectors of the left harbor weird fantasies about the possibilities of politics grounded in “populist” economics. One set holds to a sort of red-brown fantasy, in which they fuse with social conservatives and bring back the left wing of the Dixiecrats. Another set, the one that was more influential with Biden-era Democrats, holds that if you’re somehow just populist enough on economics, you can short-circuit people’s brains and they’ll stop noticing that you disagree with them on cultural issues.
Neither of these works, because the pure left-populist approach to economics is itself not a satisfactory answer to the economic question. Thus, the first point of the manifesto:
Economic self-interest for the working class includes both robust economic growth and a robust social safety net.
Democrats want and need to be a party that stands up for the little guy, for the person who, in Bill Clinton’s memorable phrase, works hard and plays by the rules. And that absolutely involves progressive economic policies. Conservatives are just way too eager to write off poor kids, sick people, and the elderly and disabled in pursuit of low taxes. They are also way too indulgent of businesses that pollute or perpetrate fraud. And they tend to stand with incumbents, the heirs to inherited wealth, and rent-seekers. But contrary to the attitudes of the hard left, a growing and dynamic private sector is really important. Americans are much richer than Europeans, and that matters. Middle-class people tend to leave San Diego for San Antonio in pursuit of bigger, cheaper houses, and that matters. It also matters that poor people can get Medicaid in San Diego but not in San Antonio.
You need an economic agenda that does both: a rapidly growing economy with a safety net that ensures people aren’t left behind.
The growth mindset
I think these tweets by Lee Hepner from the American Economic Liberties Project about why he hates YIMBYs are telling. He and Nathan Proctor, who works on right- to-repair issues at US PIRG, are not articulating a typical objection to new housing in a neighborhood, like “I’m worried about traffic” or “what if it creates problems for my kids’ school.” They are articulating a fundamental, principled disagreement with the idea that economic growth is important. They say American society has enough “energy, wealth, stuff, etc” and that all we need is a purely redistributive politics.
I think it’s important to note that Proctor and Hepner are not working on climate policy. Most readers here are familiar with the “degrowth” talking points in some climate activist spaces, and Democrats rightly reject that approach. But these guys work on competition policy, and here they are degrowthing. Not because YIMBYism conflicts with the right to repair or antitrust enforcement, but because the core principle of YIMBYism is that growth — more and better housing — is important, and they see this as antithetical to their views.
This is a tragedy, because antitrust law and competition policy are genuinely important.
It’s a real problem that right-wing politics has become too indulgent of businesspeople’s desire to engage in anticompetitive practices that raise prices and restrain output. We need aggressive enforcement of rules against cartels and anticompetitive mergers and abuse of dominant positions in low-competition markets to secure an advantage in more competitive spaces. This stuff is important precisely because it’s important to economic growth. And the same is true of plenty of other progressive ideas:
Investment in basic science
Good schools and good infrastructure
Internalizing pollution externalities
Transparent markets and rules against fraud
Macroeconomic stabilization policy
These things are important for growth and prosperity. There is a warm and cuddly side to progressive economic policy that’s about caring for the vulnerable. But there is also a tough-minded side that’s about true public goods and securing the commons. And what you do not want to do is just be prog-maxing randomly. To say that vigorous antitrust enforcement is important is not to say that maximal levels of antitrust enforcement are optimal. And the same is true of environmental rules and spending on public goods and everything else. There’s a temptation to just throw growth under the bus to avoid making choices or exerting discipline. And there are people who sincerely (and wrongly) believe that growth doesn’t matter and that we can just redistribute our way to heaven.
The need to govern
The Biden Administration was not in the grips of hard anti-growth ideology.
But it has, in important ways, been adrift in the interest group fog since the passage of the American Rescue Plan. People can, and will, forever debate the wisdom of a demand-side stimulus that large. But it happened, and it happened very early in the Biden Administration. And while demand-driven growth is great, once you max out demand, you need to aim for supply-driven growth. And they just didn’t do that. The White House considered coming out for Jones Act repeal, but the president personally didn’t want to do anything that was anti-union. They took a look at the bipartisan permitting reform bill, and they weren’t exactly against it, but they also weren’t exactly for it, because they didn’t want to cross the environmental groups. They came out in favor of YIMBY principles, but they couldn’t come up with very much to do about it, because the federal government doesn’t run zoning.
And even while talking about housing costs, they raised tariffs on imported Canadian lumber. They reinterpreted the Waters of the United States rule in a way that homebuilders say is bad for supply. They put expensive rules in place to accelerate electric car adoption, even while alienating the owner of the world’s most important electric car company to please labor unions, while also alienating blue collar union members over cultural issues.
I remember getting a briefing in advance of the 2024 State of the Union. The administration team was, naturally, touting their various efforts to address struggles with the cost of living, and many of their ideas seemed plausible, but they all struck me as ideas that could have been on a progressive laundry list cooked up in 2017. So I asked what they had that I could say a Democratic administration wouldn’t typically propose, except for their recognition that Americans were struggling with inflation.
They had nothing.
The one that has stuck in my craw for years is student loan cancellation. This policy was explicitly pitched by its architects as an economic stimulus measure.
When Biden first won the election and I thought he’d be struggling to secure adequate stimulus from Congress, I thought this was a good idea, because it could be done without a Senate majority. But then ARP passed — you don’t need stimulus anymore!
I get why the president didn’t want to say, “I promised student debt forgiveness and I understand that people will be angry at me if I break that promise, but the truth is the country is now wrestling with inflation, and I have to do the right thing.” But to pour extra fiscal stimulus on the fire when the country is struggling with inflation, just because you promised to do it back in 2019 when the situation was completely different, is wildly irresponsible. On the regulatory front, as I’ve written before, it’s not just that Biden didn’t want to tackle sacred cows like the Jones Act — he made Jones Act rules stricter. Politicians love to talk up Buy American in speeches, but Biden is a true believer who wrote the strictest-ever rules in subtle legal ways.
I’ve been accused of being a soulless monster who doesn’t believe in anything. But on core economic management, it was the Biden Administration that acted hyper-politically rather than genuinely prioritizing the biggest problem facing the country.
Caring for the needy
Taking this out of election retrospective territory, the other question here is what’s worth the risk. I’ll concede that a fully refundable Child Tax Credit is not great politics. But I do think that, if passed, it would prove quite durable, like the Affordable Care Act. If I were a House member being asked to risk my career over something, then I think a huge and probably durable cut in child poverty would be a reasonable thing to ask me to take a risk for. I’d be proud to stop Medicaid cuts. These are solid progressive issues that make sense as priorities.
But I also think it’s important to get means and ends straight.
I support certain policies that aren’t free market, because they’re necessary to ensure the interests of poor people. But it doesn’t make sense to turn all of these policies into a principled critique of free market economics. A lot of left intellectuals clearly find YIMBYs annoying because the idea of a capitalist solution to a major problem annoys them. But working people don’t need a principled debate about the role of the free market in society, they need higher material living standards. Regulations that limit the supply of health care providers are one way that the wealthy and powerful use their privilege to entrench their interests. The same is true of NIMBY rules. And the dockworkers opposing port automation earn significantly more than the average American. These are all leaky buckets of upward redistribution.
You can’t take the politics out of politics, and we’re never going to have a purely technocratic regime. But if you’re a Democrat and you’re trying to think things through on the merits, “How does this impact poor kids and struggling workers?” is a pretty good lodestar.
I think that leads us to see that the social safety net is incredibly important, but so are other things. Population movements to the red states are telling us something important about the cost of overregulation, especially but not exclusively, in the housing sector. Regulatory protections can be very important, but rigorous cost-benefit analysis is also important. Economic growth and consumer goods matter a lot. Stopping cartels from jacking up prices helps poor kids a lot. Trying to create a comprehensive price control regime so lawyers can get over on businessmen does not. Investing in effective educational institutions is great. Providing open-ended subsidies to college and universities and telling yourself it’s “neoliberalism” to demand any kind of measurable result is not.
And to deliver a common sense agenda of broad economic uplift, you also need to be in touch with common sense moral values. Which we’ll get to as we work our way through the manifesto’s remaining eight points.
Democrats’ fetish for unions is increasingly counterproductive.
Unions do not help the neediest workers. Public sector workers are six times as likely to be unionized as their private sector peers (35% vs. 6%). This means a major purpose of unions is squeezing rents out of taxpayers.
Indeed, union workers are relatively privileged. Their average wage is $1263 per week versus $1090 per week for workers generally. The rents unions extract are upward redistribution.
Fighting for union workers very different fighting for the underdog. It means fighting for a relatively privileged group of workers who has organized to claw out more privilege still. There is no reason for a fast food or warehouse worker to feel solidarity for the UAW, they inhabit completely different worlds.
In fact, unions only work when there are rents to extract, so they are great for fleecing county boards of education and sticking it to big three car manufacturers but useless for most small business employees. Focusing on a privileged sliver of workers and calling it class solidarity is bad politics.
Redistribution should occur through the tax code. A reasonable, explicit scheme of redistribution that takes more from the top 5% and gives social guarantees to all could cement a durable center left coalition. Coddling 10% of workers because they belong to unions is divisive.
I liked this article because it gets at what seems to me to be one of the main problems facing Democrats today. What are the Democrats for these days, beyond some vague sense that economic outcomes in America are unfair?
When I was younger it was pretty clear. Democrats were the party whose main goal was to make the U.S.'s economic system more like Europe's.
Given Europe's recent economic struggles, it seems like taking Europe's approach might not be the best idea (especially on regulation). Anyway, the difficulty of passing anything through Congress has made the party de-emphasize this type of approach.
Today, part of the left-of-center commentariat seems to think that "economic populism" (i.e., pursuing the economic policies of Argentina instead of Europe) is a good goal in and of itself. I'm a bit skeptical that a patchwork of random interventions is desirable or even electorally effective (cracking down on landlords, egg producers, and big tech companies is just too incoherent). Another part of the left-of-center coalition seems to concede that while economic populism isn't necessarily great on the merits, dumb voters will lap it up, so it'll be effective politically. I'm not so sure about this either.
But the Democrats *do* need some sort of economic ideology rather than "we'll just technocratically optimize cost-benefit tradeoffs everywhere," since no one actually believes they're capable of accomplishing that. In fact, this is precisely what happened in the Biden administration: technocratic optimization was really just throwing goodies around to please coalition members.
What should Dems' ideology be? I'll just point out that Matt's two signature ideas are actually pretty libertarian: housing market liberalization and promoting high levels of legal immigration. These aren't necessarily the specific ideas that'll help Dems win, but I think it does indicate that what America needs economically is maybe a little less top-down control rather than trying to be Europe or Argentina. How can Dems sell this? I'm not sure. But the Democrats should at least start with a worthwhile goal before asking how they can win over voters.