Rand Paul, Ted Cruz, Paul Ryan (Reuters/Yuri Gripas/AP/J. Scott Applewhite)

GOP's noxious, misguided edge: Why Dems need a coherent economic plan

It may be bad, but Republicans have an economic strategy. Democrats can't say the same -- and are paying the price


Michael Lind
November 7, 2014 5:00PM (UTC)

Another election has come and gone, and the Democrats are still missing a plan.  By a plan I mean a coherent economic strategy shared by most Democratic activists and presented to voters as a reason to vote for the Democratic Party.

In contrast, the Republican right has a plan.  It’s a misguided plan, in my opinion, but it is a plan.  Republican donors and voters alike can rally around it and the plan can be marketed to voters as a solution to the nation’s major economic problems.

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Like a Platonic idea, the Republican plan has various earthly incarnations, most recently the budgets proposed by House Republican budget guru Paul Ryan.  But whatever form it takes on paper at the moment, the Republican economic strategy has maintained its identity, election after election, decade after decade, since it was hammered out by right-wing policy wonks in the 1970s and 1980s.

Republican economic ideology yokes together two different schools of thought.  One is the secular creed of free market libertarianism, which comes in different denominations -- the extreme Ayn Rand school or the more moderate Milton Friedman kind.

The other strain of Republican political economy is Jeffersonian-Jacksonian white working-class populism, based in but not limited to the South.  In spite of its talk of “freedom,” Jacksonian populism is a kind of illiberal white Christian tribalism or communitarianism (think gun-packing vigilantes on the southwestern border and grimacing Church Ladies insisting that local school libraries ban "The Diary of Ann Frank" and"Catcher in the Rye").

The libertarians object to government at all levels as a threat to individualism.  In contrast, the white Christian communitarians of the Jacksonian right don’t mind if government suppresses individuals, as long as Jacksonians control the government and Jacksonians are suppressing individuals they view as threats to their tribal social order: nonwhites, homosexuals, secularists, long-haired radical professors.  Lacking secure national majorities, the default strategy of Jacksonians since South Carolina  Sen. John C. Calhoun switched from nationalism to sectionalism in the 1820s and 1930s has been to champion “states’ rights.”  This is portrayed as the alternative to federal “tyranny,” but the real purpose is to prevent national majorities, acting through the federal government, from intervening to protect minorities against the tyranny of Jacksonian state and local majorities.

For different reasons, then, the libertarians and the Jacksonians have a common enemy in the federal government.  Since Reagan, this common hostility to the federal government, in the form in which it has existed since the New Deal and the civil rights revolution, has united otherwise-incompatible Wall Street libertarians and disproportionately Southern white communitarians.

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The libertarians and Jacksonians in the Republican coalition long ago arrived at an agreement about how to divide the carcass of the post-New Deal federal government, once it is killed.  Some federal programs will be replaced by privatization, to the benefit of the libertarian rich, who salivate at the possibility of  raking in megabucks from the replacement of government programs and agencies by for-profit private entities in which they can invest.  Other federal programs will be turned over to the states, to be killed or modified by the Jacksonian conservatives in state legislatures, as they see fit.

The right’s plan is sometimes called “market populism.”  This may seem like an oxymoron — don’t free-market libertarians dread populism, and aren’t populists suspicious of markets and rich capitalists?  But “market populism” accurately captures the strange-bedfellow alliance behind the plan to dismantle the post-New Deal federal state and turn over half to Wall Street and the other half to neo-Confederate state legislatures.

In my view, it’s a pernicious plan — but it is a plan.  Where’s the Democratic alternative?

There isn’t one.  Oh, to be sure, there are particular plans by particular Democratic groups, like the Congressional Progressive Caucus.  There are plans put forth by the Democratic White House.   There are progressive activists and center-left think tanks with their own plans and manifestos.  But there is nothing as simple and straightforward as the plan of the contemporary American right to dismantle the post-FDR federal government and replace it with a mixture of voucher systems and state-level programs.  There is no Platonic Plan of the center-left, existing more or less unchanged in various documents and manifestos, comparable to the familiar Platonic Plan of the right.

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Why?  When it comes to economic policy both the Democrats, as a party, and the center-left, as a movement, are divided among far more factions than the two big factions of the right, the libertarians and Jacksonians.  If we ignore foreign policy divisions and non-economic issues, and also ignore the truly radical left, we can identify several distinct, and somewhat incompatible, schools of political economy all lumped together under the rubric of the “center-left” in American politics.

Neoliberals.  Sometimes called “Rubinites” after Clinton Treasury Secretary Robert Rubin, neoliberals combine social liberalism on issues like gay rights and feminism with moderate economic conservatism — for example, cutting Social Security and Medicare payments to the middle class in the name of “fiscal responsibility.”  They are generally in favor of free trade and kid-glove treatment of the Wall Street financial industry where they or so many of their donors are employed.

Labor liberals.  Now that unions have been all but annihilated in the private sector in the U.S., unionized workers are mostly public employees, like public school teachers, police officers and first responders.  While they tend to support progressive causes in general, naturally the focus of embattled organized labor activists is on defending unions where they exist along with benefits obtained by unions like public employee pensions, against conservative Republican assaults.

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Social democrats.  These are supporters of a larger, more European-style system of social insurance and public services, financed by higher taxes.  Their agenda overlaps to some degree with that of the labor liberals.  But it is possible to achieve a high degree of social democracy even in the absence of strong labor unions, as Lane Kenworthy points out in his recent "Social Democratic America."

Small-is-beautiful Brandeisian progressives.   There has always been a strain of progressivism, going back to Louis Brandeis and Woodrow Wilson, that supported small businesses and local communities against what Brandeis called the “curse of bigness.”  Theodore Roosevelt and his Democratic cousin Franklin mostly sided with bigness — big government, big industry and big labor — but the old Brandeisian vision revived in the 1960s and 1970s with Naderism and today it is very influential among college-educated white liberals.  Brandeisian progressives are sometimes confused with Jacksonian populists, but the neo-Brandeisian ideal is the artisanal brewery next to the alternative bookstore in hipster Brooklyn, not the neo-Jacksonian utopia with its little white church next to the feed and bait store.

Coming up with an economic platform or a plan that can satisfy all of these Democratic factions is much more difficult than reconciling the localism of the Jacksonian right with the free-marketism of the libertarian right.  For example, the neoliberals favor international trade agreements that secure the interests of big banks and multinational corporations — the very embodiments of evil for Brandeisian progressives of the small-is-beautiful school.

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Labor liberals generally support infrastructure projects that would generate both public and private jobs, like the Keystone pipeline and new highways and port expansion.  But the environmental movement reflexively opposes new infrastructure unless it takes the form of their favorite technologies — wind or solar energy and rail-based mass transit.

Since the best private sector jobs for the working class tend to be in large, capital-intensive corporations engaged in mass production and international trade, labor liberals also tend to be at odds with Brandeisian progressives who dream of a Lilliputian utopia of small craft shops and owner-run businesses.

The progressives I have described as social democrats want to expand federal social insurance programs.  Most would support expanding Social Security, making unemployment insurance more generous, and creating a new federal entitlement to paid family leave.  But neoliberal Democrats backed by Wall Street like Bill Clinton and Barack Obama have sought to cut or abolish universal social insurance entitlements.  Clinton collaborated with Republicans in Congress to destroy the federal entitlement to means-tested welfare, Aid to Families with Dependent Children (AFDC), replacing it with the right wing’s neo-Confederate alternative:  state-based programs.  Until Democrats in Congress rebelled, Obama sought to collude with Republicans to cut Social Security by tinkering with its inflation adjustment (“chained CPI).

To date it has manifestly been impossible for Democrats to devise an economic master plan that can unite neoliberal proponents of free trade and global financial deregulation, labor liberal champions of employer-based pensions, social democrats in favor of expanded social insurance, Brandeisian “locavores” and suburb-hating Greens behind a single, agreed-upon economic plan, comparable to the economic strategy that unites libertarians and populists on the right in their campaign to carve up the federal government among them.  Politics, like nature, abhors a vacuum.  If one party can agree on a consistent economic plan and its rival can’t, it is pretty clear which side will set the terms of debate.

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Michael Lind

Michael Lind is the author of Land of Promise: An Economic History of the United States and co-founder of the New America Foundation.

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