The sensible and overdue retirement of Joe Biden has but one catch. His high-spending protectionism will never face its electoral reckoning. “Bidenomics”, if we are to accord such an old-fashioned programme such a fresh name, seemed bound for defeat on November 5th. If nothing else of value came from a Donald Trump win, there was this: it would have been a while before the Democrats vilified trade and markets again as a shortcut to votes.
They should stop doing it anyway. Sixty per cent of Americans want Kamala Harris to junk Biden’s economic platform or to change it in a “major” way. Although liberals feign a childlike confusion about this – given the nation’s overall economic vigour – it isn’t hard to fathom. Wage growth outstripped inflation for almost all of Trump’s term. Under Biden, it didn’t do so on a consistent basis until 2023. He is spoilt for mitigating circumstances to cite, such as a global pandemic and a war. But his spending bills implicate him in price rises far more than other world leaders over the period. That is reason enough for Harris to detach herself from them.
Even if inflation had never spurted, Bidenomics might still have been a political liability. To understand why, it is worth going back to some political maxims that Democrats all but coined in the 1990s.
Here is one. Policies that are popular on their own terms can be unpopular in combination. A cheque in the mail from the federal government is a delight. A cheque plus an infrastructure splurge, a crusade against corporate “price-gouging”, a takedown of Big Tech and some other paternalist gestures starts to smell of zeal. Voters hear the chord, not the notes. Otherwise, politics would be absurdly easy: just stack crowd-pleasing ideas on top of each other.
Second, it matters who proposes what. The Republicans can get away with big government because voters trust a party of the right not to over-reach through doctrinal fervour or class animus against the rich. There is such a thing as “permission”. Democrats don’t have it. (Unlike on crime, where Harris can and should harden her line without unnerving swing voters.)
Put these factors together, and Bidenomics would have run into electoral trouble in any era, except one in which voters craved an interventionist state. And here is the crux. Are we living through such a time? Was 2020 a leftward turn in the public consensus, as 1979-80 was in the opposite direction? Did the pandemic uncover a pre-existing frustration with “neoliberalism”? If so, Harris should pledge to continue her boss’s statist project.
But I doubt it. This dialectical turning point has always felt like something commentators have tried to will into being. On the eve of the pandemic, US economic confidence was at its highest since the millennium. The worldwide trend in politics has been against incumbents, not against this or that programme. And few eras have a clean ideological identity. (Across the rich world, neoliberalism didn’t stop the state’s social spending being higher as a share of GDP in 2005 than in 1980.) If a centre-left leader understands the ambiguous mood out there, it is Keir Starmer, who has the parliamentary numbers to turn Britain upside down, but knows he won them on the premise that he wouldn’t dare.
Thrice in this young century, progressives have sensed a leftward change in the intellectual weather: 2020 itself, the financial crash of 2008 and the one people forget, September 11th, when the heroism of public sector workers was hailed in some quarters as the start of a pro-government epoch. (Oh yes, it was.) This teleological gibberish is bad enough in pundits. An election-contesting party shouldn’t go near it.
Besides this electoral case for retiring Bidenomics, there are higher-minded ones. Industrial workers, if Democrats are sincere about their plight, are also price-sensitive consumers, often of imported goods. And paternalism can be a charter for lobbyists, hence the current gimmick of exempting waiting-staff tips from tax. (Nevada, where the hospitality unions have clout, is a swing state this year.)
Above all, Bidenomics has no answer to the US’s brewing crisis: a public debt that both parties prefer to ignore. Industrial subsidies come at an upfront cost, even if one assumes, as one shouldn’t, that it part-funds itself through higher growth in the end.
But the substance can wait. November comes first. If I understand it correctly, the Democratic attitude is as follows. Defeating Trump is an existential matter for the United States but Bidenomics, which voters greatly dislike, is sacrosanct. The burden falls on Harris to halve that sentence. – Copyright The Financial Times Limited 2024