After the brutal defeat of the 2016 presidential election and a string of special election losses, the Democrats are doing some soul-searching. "People don't like Trump; he's at 40 percent [approval rating]," Senate Minority Leader Chuck Schumer (D-N.Y.) told ABC News last week. "But they say, 'What the heck do the Democrats stand for?' We better stand for something, and it can't be baby steps."
So Schumer and his colleagues are apparently working on a fix: "A strong, bold, sharp-edged, and commonsense economic agenda — policy, platform, message that appeal to the middle class," as he described it. Schumer said the plan will be out in a month and will provide the unifying platform Democrats campaign on in 2018.
That sounds like good news for Democrats. But their greatest enemy in this endeavor may be themselves. In recent decades, they've developed some ideological tics and instinctive assumptions that hamstring their policies and undercut their political aspirations.
If Schumer's big and bold economic agenda is to live up to the hype, here are four habits the Democrats will have to break.
1. Stop worrying about the deficit. The federal government is not like a private business or household, or even a state government. It's utterly unique, because it controls the currency. The whole point of giving the Federal Reserve control over interest rates is to render federal deficit spending economically harmless. Interest rates rise only if the Fed allows them to.
Now, people worry that holding down interest rates even as the government spends more than it takes in can cause runaway inflation. But inflation only becomes a risk when you've maxed out the economy's capacity to employ workers and resources. There's ample reason to think we're still a long way from reaching that point. And even if we do reach it, letting interest rates rise would be a good idea, because it will keep the economy from overheating.
A maxed out economy means workers can hop to new opportunities easily, and employers have to constantly raise wages to hold onto scarce labor. In short, it's great for workers! Treating that event as something to fear is politically poisonous. Furthermore, if Democratic politicians stop worrying about deficits, they can stop worrying about "finding the money" to pay for big programs, and they don't have to risk pissing off upper-class voters with much higher taxes.
2. Stop making policy needlessly complex. From ObamaCare to child care to boosting workers' paychecks, Democrats often turn to tax breaks to help Americans. Schemes to help precarious workers get health care, retirement, family leave, and vacation often try to coax private employers into providing the benefits. This may play well with centrist elites, but it forces working families to navigate the bureaucratic rats' nest of our tax code, and it leaves Democrats' policy goals at the mercy of big business' cooperation.
Instead, if Democrats want to give everyone health coverage, they should just expand Medicare — lower the retirement age, bring in children and young adults, let workers without employer coverage buy in, etc. If they want to help retirees, increase the generosity of Social Security. If they want to expand access to college or K-12 education, fund it from the federal level. If they want more access to housing, have the government build more housing. If they want to give everyone paid vacation and family leave, provide those benefits directly through federal spending.
The last few decades have left voters skeptical of the government's ability to help them. So when Democrats send that check or build that school, they should put "brought to you by the federal government" in big bold letters right on the front.
3. Stop "targeting" government benefits at the poor. A lot of centrists love means-tested aid. It saves the government money, and it looks like it's prioritizing the most vulnerable Americans. But it "targets" the poor in more ways than one. Plenty of struggling families still aren't poor enough to receive government aid. That leaves them feeling resentful and forgotten, and ready to blame the people getting the help — not to mention the politicians who provide it.
So Democrats should strive to make all aspects of the welfare state as universal as possible. Social Security and Medicare are good examples of this: If you're a retiree, you get the benefits, end of story. Another good example would be a universal child allowance: A monthly check to every family with a kid, to either pay for child care or to support a stay-at-home parent. Making K-12 education and all state colleges free for everyone falls under this heading too. And if Democrats can't make a program universal, they should at least avoid phasing it out until relatively high up the income ladder.
As James Kwak wrote, the Democrats' narrative should be about making the economy fair: Good education, health care, employment, and retirement security for everyone are the universal building blocks of opportunity. This won't just be a popular agenda. It will help Americans feel like they're one community again, rather than a bunch of warring ethnic and cultural tribes fighting over diminishing resources.
4. Stop leaving job creation to the capitalists. Few things are more central to Americans' vision of the good life than a good job. President Trump, con man that he is, still spoke to this hope. That's a big part of why he won. Unfortunately, the blunt reality is that it's in the interest of big business and Wall Street to never provide enough jobs, and to keep workers in a permanent state of precariousness: It increases their bargaining power in labor negotiations and drives up their profit margins.
There are lots of policies that push back in workers' favor, like deficit-financed stimulus, big infrastructure projects, easier monetary policy, and raising the minimum wage. But ultimately, the government should guarantee people good employment if the private sector won't provide it. Franklin Roosevelt once said a dignified job that pays well shouldn't just be something people get if they prove themselves attractive enough to an employer — it should be a universal human right available to all. And for a short time, the New Deal created work programs that employed millions and beat back the Great Depression. Democrats should resurrect Roosevelt's vision and make it permanent.
The party's premiere think tank has already proposed a federal job guarantee program, aimed at keeping employment rates for workers without a college degree above a certain threshold. That's not as bold as what's needed, but it's a good start. Making all Americans feel included in the welfare state is one half of the equation; making them all feel included in the economy is the other.
