Democrats are killing the GOP on economics so why aren’t we saying so?

Reuters just released a story about Millennials and their weakening support for the Democratic Party as reflected in a recent poll they worked on with Ipsos. Cited in the story and the accompanying video is the concern these voters have with Democrats on the economy. They talk about their increased take home pay as the result of the tax law changes recently implemented and the GOP support for American manufacturing. I get the former because that’s a tangible thing but the latter is just bullshit. There is no actual evidence that Republicans have any interest in repatriating jobs back to the States.

The thing about voters’ response to lower taxes is that it is a perception of value. If you are paying payroll and income taxes in the US and you have a mountain of student debt, crippling healthcare costs, shitty transit, a cliquish job market, and too few training opportunities then you will bet the short cut odds on lower taxes. As a value proposition our taxes are too high. But whose fault is that? In pragmatic terms it is the voters’ fault because they demand too little. The Democrats are complicit though because we don’t talk about how we want to give voters more for their money. We speak of things only in terms of doing good for goodness sake, the irony being that we’re supposed to be the godless horde of heathens and atheists. We lose out on both the utility of our positions and the goodness of our values in the argument because we never think about this most human internal question, “what’s in all of this for me?”

We see it in the discussion of the environment. “We need to fix global warming for the future”. In the workplace we talk about “family wage jobs” or “worker fairness” as if these are remote peoples that need our help. We talk about young people with DACA status as if they aren’t valuable members of the economy but only people who desperately need our help. The undocumented in general aren’t referred to as economic engines but as poor people who pick your vegetables. This isn’t to say that there is no place for altruism but by making all of our economic arguments as having to do with charity or as necessary compromises to market forces we cede improtant ground to the opposition. We need to make our case that well regulated capitalism is the best way to ensure the most competitive and economically robust environment possible.

Indeed, we act as if the rules we implement in our markets are necessary evils which is a ridiculous way to understand their importance. It is also the main reason why so many people think that Democratic approach to the economy is hurtful to the very people they represent. But turn around and look at any other competitive activity and no one would say that rules are bad. You may find one or two that they don’t like designated hitters in the American League but on the whole I think everyone would acknowledge that it is the rule-book itself that defines the game.

The GOP description of our governmental reality serves their wealthy clients, that wish to have as little competition as possible, very well. The Democrats have continually aided them by implementing ad hoc rules that while limiting the harmful impact of Republican policies over the long term seem to validate their worldview. For instance, healthcare costs are real limiting factors for business and individuals. The risk inherent in starting a business is compounded by how expensive it is to afford healthcare in the American model. In any other developed country the risk exposure of health insurance for businesses is limited by creating what in our system would be more like a utility (see gas, electric, water and sewer). Instead of telling people that we need single payer healthcare so that businesses can be free of the bureaucratic expense of administering these benefits we allow for it to be derided as “socialized medicine”. As if the English model is the only way innovative Americans could find to implement a better system, even though most countries don’t even have the equivalent of the British state-run healthcare system.

Look at the way we talk about unions. Somehow shareholders are good capitalists and organized workers aren’t? How is it that we’ve allowed passive ownership to be seen as the more assertive expression of capitalism? Why haven’t Democrats worked to establish that creating economic value through work is the metal from which our capitalist coin is minted? My perspective on this isn’t new either. We can go back to the turn of the 20th Century and see this in the sentiments of the Democratic Party through their standard bearer of the time, William Jennings Bryan (a flawed man if ever their was one but no less right about this point,)in his Cross of Gold speech.

When you come before us and tell us that we shall disturb your business interests, we reply that you have disturbed our business interests by your action. We say to you that you have made too limited in its application the definition of a businessman. The man who is employed for wages is as much a businessman as his employer… Mr. Carlisle said in 1878 that this was a struggle between the idle holders of idle capital and the struggling masses who produce the wealth and pay the taxes of the country; and my friends, it is simply a question that we shall decide upon which side shall the Democratic Party fight.

Bryan was speaking to a point that we need to continue to make; we are all job creators and it is the regulatory framework that can build a thriving economy. Indeed the argument of over 100 years ago is one we are still having, even before Ronald Reagan’s trickle down economics was being used to undermine the way value is created by capitalists in the American economy. Bryan addresses this perspective a century prior when he states,

There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.

What is unfortunate is that we have not continued to make this case in as forceful a manner and with the overwhelming evidence of its truth. The velocity of money is a simple way to understand how wealth is really created and since working people. This is because they have less discretionary income and contribute more to a localized prosperity where cash stays in the community changing hands and increasing wealth as goods and services are exchanged. By understanding this you can see why investors are much less likely to create prosperity and growth than the individuals that are spending their hard earned money on goods within an economy. Poor people spend almost all of their money within the community, give them a little more money and the rising tide lifts all boats because 100 dollars spent 10 times creates 1000 dollars of economic activity.

How regulation can help with this is simple and since as a Democrat you favor strong rules then why not make the case for how they can make regular people retain more wealth? Let me give you a quick example. When the broadcast rules from the FCC had televisions change from the age old standard definition to the HDTV standard there was a great deal of economic activity as consumers had to upgrade equipment. This activity drove revenues for cable companies, manufacturers and the stores where people shop for TVs. This was regulation that was essential to making a lot of people a lot of money.

In case you think this is an isolated occurrence consider the car in your driveway. At the time of Bryan’s speech cities in the US had a horrible problem, there was shit and horse corpses littering the streets and causing problems like stench and disease. There were all kinds of regulatory steps that would attempt to fix the problem. Eventually, though the tax advantages and infrastructure support provided to the automobile industry won the day. Not only did the roadways we invested in and the tax benefits provided to oil limited partnerships provide for a huge influx of investment but the jobs they created would provide the foundation for an economic expansion that lasted until this day.

So why now that we have the opportunity to make such a case for our current environmental movement don’t we discuss it in terms of wealth creation through favorable regulation? Instead, as Democrats, we’ve relied mostly on the spirit of altruism to make the case to the American people that renewables are the future. As a result we’ve allowed Republicans to make specious arguments about the overly mature, and ironically named, fossil fuel sector. This has undermined what could be the next renaissance of the American economy. Standard Oil is never going to provide the 4–5% (minimum) growth the United States needs to be prosperous. Their day is done, yet the American people almost universally see the demise of the internal combustion engine as a necessary evil to save the planet rather than the economic drag on every last person in this society that it is.

Indeed we provide huge benefits to the antiquated transportation system that we have that will at best allow our country to simply break even over finding next generation improvements to invest in now. Look at the power of the railroads in how they limit a state’s ability to regulate the hauling of hazardous cargo like oil and gas. Yet we know that an economy that provides our independence from such commodities would limit the amount of cash we send out of the country. Most people in America would be hard pressed to explain how we get back all of the currency that we send out of the country when we pay for oil or cheap goods from China.

We sell our debt. Treasuries, real estate, stocks and bonds are sold to creditor nations like China and Saudi Arabia to help us get our money back. You should also know that this isn’t necessarily the bad thing that the nationalists would have you believe. It is good to have other countries be heavily dependent on the our economic health since it gives them a vested interest in our well-being. We do though also need to get this all back under control since without economic growth, which trade deficits limit, we’ll eventually run out of stuff to sell them. By reducing the amount of currency we send overseas and by increasing our economic growth by investing in our people and the industries of the future we’ll be better off and as Democrats it is important that we start making the case that we are the only party that has the policies to provide for these needs.

The Democratic Party is the only political party that not only wants to do the altruistic things to help Americans; it is also the party that understands the value of making the marketplace more competitive. If you love NASCAR, the NFL, Major League Baseball, Basketball, and figure skating then you know that it is the rules that make for better competition. The quality of the rules, I will grant you, are very important but it is still how we structure competition that makes the game rewarding. This is why we need to start admitting to everyone that greed and ambition can be good and work in the service of the greater good. We need to make sure that a wealthy person’s greed isn’t given more importance than a poor persons. This isn’t just a matter of fairness but also essential to how the markets function efficiently and for the benefit of all that participate. As Democrats, if we do that and I don’t think we’d have a problem gaining the support of most Millennials or anyone else for that matter.