Prospects
Will Biden Be Radical Enough? ROBERT KUTTNER
W
e can all celebrate President Biden’s first hundred days. His appointments have been mostly better than feared. He is dreaming big on everything from COVID relief and recovery to a large-scale infrastructure program. His $1.9 trillion rescue program achieves goals that have long eluded progressives, most notably a much enlarged temporary child tax credit, which will be difficult to terminate next year once experienced by so many Americans. Activist government is back, and it’s broadly popular. And the deficit hawks have been banished from the temple. He, and we, also benefit from the kind of splits in the Republican Party of which Democrats only dream. Biden’s program is far more popular with Republican voters than with Republican politicians. Mitch McConnell and Donald Trump are at each other’s throats. The Republican schisms bode well for 2022. Normally, Democrats would lose seats in a new president’s first midterm. Another 10 to 15 Democratic House seats are at risk from redistricting. However, this loss could be offset by Republican fratricide. If center-right Republicans in swing districts are ousted in primaries by farright Trumpers, Democrats could pick up those seats. The amazing on-the-ground efforts of 2017–2018 helped the Democrats pick up 41 House seats in 2018. That upsurge of
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organizing was short-circuited by the pandemic in 2020, while Trump went right on with live, infectious campaigning. But Trump will not be on the ballot in 2022. With the GOP fractured, Democratic turnout could easily exceed Republican. The Senate also looks good, with more vulnerable Republican seats than Democratic ones. As I reported in a feature piece in our last issue, the Democrats now have a party chair in Jaime Harrison who believes in local partybuilding and long-term organizing, Howard Dean style. Economic tailwinds, and the massive relief of the pandemic being over, will also help the Democrats hold their own, maybe even make gains. Analysts expect the economy to grow as much as 7 percent this year. All that said, the challenges go much deeper than Democratic prospects for the midterms. The big risk is that Biden will not be able to transform the American political economy, Roosevelt fashion, in a fashion that transforms life chances for working people. And if that is the case, despite Biden’s popularity the grievances that helped propel the Tea Party and Trump will remain to reinfect the polity. THE NEW DEAL did three big, extraordinary things. First, it imposed a salutary straitjacket on capital. Second, it empowered labor. And third, it used government in visible and dramatic ways to help regular people.
Due to the historical accident of World War II, the 1940s did even more of this than the 1930s. By the time war broke out, Roosevelt had pretty well purged abuses from the big banks and brokerage houses. The war buildup required a great deal of public capital, as well as income surtaxes as high as 93 percent on the wealthy. The need for wartime debt financing put speculative capital markets on hold, and pegged interest rates on government bonds. This further tilted the balance against concentrated private wealth. The war buildup also produced overfull employment. Wages were controlled, but companies bid for scarce workers with good health and pension benefits. The wartime no-strike pledge required government to redouble its alliance with organized labor. Defense contractors—every large corporation that mattered—were required to recognize unions. The big wage gains, built on these structural changes, came in the postwar period. By the time the war ended, the relationship between capital, labor, and government had been transformed. Ordinary people could live a middle-class lifestyle on one income. The power of unions meant that rising productivity translated into regularly rising earnings, well beyond the minimum wage (which was far higher in real terms then than now). Most jobs were regular payroll jobs. Temp work was rare, and gig work hadn’t been invented.
The tax system remained steeply progressive through the late 1970s. In the three prosperous postwar decades, the distribution of income and wealth became more equal. Some of the economic security of the working middle class was a one-time happy convergence. Cheap farmland could be converted to affordable housing within commuting distance of large cities. It was possible for people to attend public university for free, without too much toll on the public treasury, because far fewer went to college. Trade was simply not an issue, because there wasn’t much. Yet attributing the good package of jobs, housing, and education to a one-time lucky convergence of events lets politics off the hook too easily. Much of the postwar social contract was the result of deliberate policies, which in turn transformed power relations. Government intervened on the side of labor, against capital. Speculative transnational movements of money were prohibited. Public universities were tuition-free as a matter of state policy. The GI Bill even paid living stipends as well as covering college tuition, public or private. Those interventions were not happy accidents. They reflected a profound power shift. This basic social compact continued through the 1970s, when the combination of stagflation, globalization, and the resurgence of corporate power set in motion its reversal. The erosion became more explicit
