Too many Democrats still don’t get the working class

Defeated Democrats are looking for new ways forward, and one of their most articulate leaders is Sen. Chris Murphy of Connecticut. They should be “an aggressively economically populist party that builds a wide tent,” he says, “asking working class voters to come inside even if they don’t align with us on every social and cultural issue.” Murphy is clearly on to something: Moderate Democrats such as former Gov. Jon Bel Edwards of Louisiana, who left office this year after reaching the two-term limit, have shown that it is possible to win even in red states by supporting policies like Medicaid expansion and an increase in the minimum wage — while also taking more conservative positions on issues like abortion and guns. Gov. Andy Beshear of Kentucky has followed a similar playbook.

But what about the first part of Murphy’s prescription: What does it mean, in concrete terms, to be an “economically populist party”? Murphy elaborates in a long profile in the Atlantic magazine, saying that Democrats need to become “serious about redistributing power from people who have it to people who don’t have it.” But Murphy’s position isn’t so much about redistribution as predistribution. As he tweeted recently: “Most people don’t want a handout. They want the rules unrigged so they can succeed on their own.” This is true to a point. But insofar as they are saying that the US should care less about economic growth and efficiency, the predistributionists are wrong.

One of the conceits of the so-called “post-neoliberalism” movement — sorry for all the prefixes and abstract nouns, that’s just where Democratic politics is right now — is that neoliberalism itself is a “free-market, anti-government, growth-at-all-costs approach to economic and social policy” that has outlived its usefulness. So Democrats should turn to predistributionist policies, manipulating the distribution of income through trade restrictions, promotion of labor unions and antitrust enforcement. This is not a new idea. The term “predistribution” was coined in 2011, and the economic policies of President Joe Biden’s administration have mostly been post-neoliberal. Biden appointed antitrust regulators who were critical of the consumer-welfare standard in favor of anti-Bigness. He moved away from Barack Obama’s support for charter schools and the Trans-Pacific Partnership in order to form a closer alliance with labor, and often boasted that he was the most pro-union president ever.

Not coincidentally, Democrats’ reputation for economic stewardship suffered as the country endured its worst dose of inflation in decades. This was a largely global phenomenon, of course, driven by COVID unwinding and the fallout of the war in Ukraine with perhaps a boost from the very aggressive American Rescue Plan. But these regulatory tweaks didn’t help. The administration frequently claimed its top priority was addressing high consumer prices, but in practice it rarely prioritized cheap goods over political interests.

The idea that doubling down on this approach will save the party seems questionable. Democrats shouldn’t ignore the pretax distribution of income — but neither should they downplay the value of social insurance programs and the welfare state. And rather than dismissing economic growth as outmoded neoliberalism, they should look for pro-growth reforms that disproportionately benefit people at the bottom of the economic ladder.

Land-use reform to allow more homebuilding, for example, is a positive-sum move that grows the overall economic pie. But it helps relatively downscale renters and first-time homebuyers more than it helps relatively affluent homeowners. Similarly, certificate-of-need laws and quantitative restrictions on training new doctors make the country as a whole poorer while enriching a small number of insiders. Indeed, despite their blue-collar vibes, most of the aforementioned union giveaways advantage people earning above-average incomes while raising costs for the poor. Tariffs on China may have important national security rationales, for example, but as economic policy they are regressive and hit the poor hardest.

All of which is to say, to bring this back to Chris Murphy: His abstract formula is correct, but the devil is in the economic-policy details. In pure political terms, almost all of the constructive work is being done by the big-tent approach on cultural issues. And on the economy, it is generally smart to position yourself as a friend to the little guy and the scourge of elites. But what matters most is actually succeeding in raising living standards. In this sense, the best “populist” policies are often just neoliberal ones: eliminating barriers to economic growth that serve only to protect narrow political interests. Sometimes, as the post-neoliberals would have it, these interests are big corporations; other times, as neoliberals would point out, they are labor unions.