After decades of neoliberal politics, the Democrats’ successes in the 2022 midterm elections show how policies that build toward a more equitable economy and social democracy can now find electoral success, writes Stephen Amberg. While both the Democrats and Republicans have moved away from neoliberal politics since the Great Recession, the Democrats have responded to the damage and anxiety it has caused through progressive pro-worker policies, while the Republican Party has embraced populism and the far-right. Now, he argues, the Democrats must maintain their momentum towards a more equitable economy.
The 2022 midterm election is confirmation that the US turned the corner in 2020 from the neoliberal party system that has dominated since the 1980s. There is no guarantee the process will continue, and many forces are in play, but the Biden administration and Democratic Congress not only delivered policies that take a new post-neoliberal direction in economic strategy. They articulated a distinctly new narrative of an equitable economy that puts workers first. Thus, this election can be viewed against a longer series of elections since the 1970s when the US government began a neoliberal turn in economic policy. In that perspective, this election is another step toward creating a new partisan alignment that, in 2024, could shift the US toward a new social democracy.
The midterm results are a product of the forces influencing the US party system
A comparative perspective confirms the large forces at work that we see in the US. The neoliberal turn in every country devastated the working-classes, dislocated voters from their historical political positions, and disrupted party coalitions. In addition, deindustrialization, the mobilization of women in the workforce, and mass migration have created new political opportunities for party leaders. In recent years, almost every country in Europe has experienced a variety of Trumpian semi-fascism, as President Biden put it, but each is playing out according to national political conditions, including the nature of the party system and the organizable stock of historical themes and identities.
This prognosis of the party dynamics may be an overreach, given that the Republicans won control of the House and did well in Texas and Florida, and even picked up four seats in New York state. But the Republicans significantly under-performed historical midterm expectations while the Democrats performed well where they needed to in the industrial Midwest and in the Southwest. This was not a status quo election.
Also, there were other issues than political economy that are important, but, in the US two-party system, they can either support the status quo or crosscut the existing alignment and contribute to a new cleavage that defines a new party system. The abortion bans and women voters were critical to the election outcomes, but women were already critical for the Democrats on issues like paid family leave and improving working conditions in the service sector, both of which are part of the new politics to make the economy more equitable. Climate policy is about freeing the economy from the carbon energy sector rather than letting market forces determine the outcome. Regulating precarious jobs is an investment in the lives of the “intersectional” workforce that disproportionately fills those jobs. The COVID-19 pandemic and the Russian invasion of Ukraine both convinced many policymakers that global supply chains are too fragile, and that industry policy should stimulate domestic manufacturing.
Neoliberal damage and economic anxiety
The longer view of the party system reveals that the Democrats and Republicans created the neoliberal political order, but more recently have departed from it. The topline economic characteristic of the neoliberal order was a generation-long stagnation of median family income and an enormous concentration of income and wealth on the top 1%. Industrial restructuring was devastating for unions and for historical political alignments because unions had been the organizational anchor for workers’ political commitments. Deindustrialization hit minority communities hard as did capping federal government employment for 30 years. Two million manufacturing jobs were lost from the time when China joined the World Trade Organization until 2010. All of this happened, but the mainstream parties mostly drifted and did not respond to the widespread economic anxiety. On the contrary, neoliberal leaders called for cutbacks in domestic social benefits to improve global competitiveness. In 2004, President George W. Bush promoted what he called “the ownership society“, in which government would privatize social programs and encourage individuals to purchase (or borrow the money to purchase) their pensions, health insurance, housing, and education.
In fact, drug abuse and “deaths of despair” rapidly increased and consumer debt mushroomed. The prison population — almost entirely working-class people — quadrupled. The new service economy created millions of new jobs, but many were low wage with poor working conditions. These jobs are disproportionately filled by women, people of color, immigrants, and youth. Then there was the financial crisis of the Great Recession, which threw over eight million out of work and six million out of their homes, while the taxpayers bailed out the financial companies.
How the Great Recession moved the parties
In every country that experienced neoliberal economic policy, working-class voters left the mainstream political parties and fewer voted, but then, increasingly began to vote for protest parties, sometimes on the far-left but increasingly on the far-right.
In the US, the neoliberal governing strategy hurt the Democratic Party the most because it was historically positioned as the party of working people. But the Clinton Democrats adjusted to the Republican Party’s neoliberal globalization, supporting free trade, fiscal prudence, abandonment of unions, business de-regulation, and work-first welfare policies. The Democrats shifted their electoral appeals from the working-classes to the professional-managerial classes. Democrats were liberal on cultural issues and favored equal economic opportunity, which, they argued, could be secured in the new economy by targeted social investments in education and health care, retraining, and entitlement reform. But, like other leftwing parties in Europe, the Democrats alienated the working-classes and played into the hands of rightwing critics who labeled them frauds and elitists. However, the Great Recession was a huge crisis for the neoliberal economy because it demonstrated that the financialization of the economy was no guarantee of good jobs and, in fact, deregulated finance was extremely costly. Since the Great Recession, both American parties have changed.
The Republican Party has moved its campaign messaging to the far right. What else could it do? The Republicans have lost the popular vote in seven of the last eight presidential elections. Their neoliberal governing strategy became very unpopular. Deregulation of finance and bailouts of banks, free trade and off-shoring jobs, tax cuts for the rich, deregulation of civil rights and voting rights, cutbacks in pensions, education, and health care, lagging the minimum wage behind inflation, privatization of the veterans’ health care system and Medicare — none of it is popular. In contrast, this year’s Democratic attacks on corporate profiteering, raising taxes on corporations, guaranteeing health care, increasing the minimum wage, and forgiving some student debt polled very well.
In 2016, Trump saved the Republicans, who were headed into yet another defeat at the hands of Hillary Clinton. Trump perfected the Republicans’ pitch to working-class people that Republicans were the true friends of the people while Democrats were coastal elites. Trump attacked free trade and historical foreign policy commitments, including the war in Afghanistan and NATO, and he promised to stop immigration altogether. Trump won most of the old industrial blue-color states in 2016. Many top Republican leaders didn’t like the anti-global populism, but Trump won and there was no arguing with victory. Of course, in office, Trump’s record on social and economic policies were almost all terrible for workers. But Trump delivered massive tax cuts, deregulation, and Federalist Society judges for corporate America.
Biden and the Democrats’ successes
In the meantime, the Democrats also changed. The Biden administration is the most pro-labor administration since John F. Kennedy’s. The historically outstanding 2022 results confirm the potential of the new Democratic strategy. If they stick to the strategy, they can establish dominance in the party system.
Since the Great Recession, the Democrats have benefited from new social movements that rapidly organized across the country, mobilizing people to successfully demand new state-level employment policies in dozens of states, such as increases in the minimum wage, paid family leave, protection for immigrant workers, regulation of gig work, union rights for health service workers, policing reform, and more. These leftwing popular organizations increasingly shifted from protest and lobbying to electoral engagement. They were supported with grants and technical assistance by liberal foundations and think tanks, who, after the 2016 Trump victory, also pushed the Democrats to go beyond neoliberalism. This came to fruition in 2020.
Although Biden was seen as a middle-of-the-road alternative to Bernie Sanders, once Biden secured the nomination, his campaign coalesced with the Progressive wing of the party to write a Unity Platform that included most of the new movements’ demands. Conservative critics were at least right about this point: the Democrats moved to the social-democratic left. Biden then won election in the greatest voter turnout in over 100 years. In contrast, the Republicans in 2020 failed to adopt a party platform for the first in its 170-year history: how could they publicly reaffirm their unpopular neoliberal policies? They ran as the party of Trump.
Of course, the Biden administration struggled for a year to corral Senate votes to pass the progressives’ plans; in the end, Congress passed only part of it. But the important points are, first, it did pass quite a lot and, second, the Biden Democrats are rejecting the Republicans’ definition of electoral space and they are expanding political possibilities. Just this year Democrats passed major bills for energy and climate action, infrastructure investment, a corporate minimum tax, the CHIPS and Science Act that asserts a new industry policy, including microchip manufacturing in the US, reduced ACA health insurance premiums for nine million people, expanded Medicare benefits and capped insulin prices, increased funding for veterans, the military, and local police, and passed the Safer Communities Act to address gun violence and mental health. Congressional Republicans almost all voted against every bill. Biden ordered up to $20,000 in student loan forgiveness with an income cap, rallied NATO to help Ukraine resist Russian aggression, and is keeping Trump’s trade pressure on China.
The Democrats’ new definition of politics contrasts with the Republicans’ messaging about the “elites vs. the people”. Biden Democrats are organizing an “equitable economy vs. corporate power” cleavage. This has a distinct working-class dimension to it, but now understood as an “intersectional” working-class. This theme contributed to victories in Pennsylvania, Ohio Congressional races, and in Michigan, Minnesota and elsewhere. The Progressive Caucus in the Congress is adding members.
How the Republicans lost momentum and how the Democrats can maintain it
Republicans in 2022 deployed their rightwing populist pitch: divide the country between “the elites” and “the people”, who are perceived as white. Trump Republicans argued that they were the true majority but that elites had conspired to deny this. They criticized Biden for inflation, but inflation-sensitive voters heard no useful plan from them, in part because the Republicans simultaneously blamed the Democratic Congress for giving workers too much money, which they said stimulated wage-push inflation. Republicans revived racist appeals about alleged crimes by urban people of color; scapegoated immigrants, gays, trans kids, and low-income mothers; and solidified the Christian Right with abortion bans. It did not work very well. The Republicans did not expand their base. The Democrats’ reorganization of the electorate creates a more favorable field of action for them.
Trump’s attempted coup against the constitutional transfer of power in 2021, and the Democrats’ campaign message about voting for democracy, definitely contributed to the Republicans’ poor midterm results. The Republican base and almost all Republican candidates had stuck with Trump, but all but one of the election denying candidates for Secretary of State were defeated as well as election-denying candidates for governor and Senate. The Republicans’ poor performance may marginalize Trump among party professionals, but the Republicans don’t have a Plan B: they have their strategy to campaign as a far-right party and to govern as a neoliberal one. How can they compromise on paid family leave, energy policy and anti-trust policy, not to mention the Voting Rights Act, and keep their base of far-right voters and corporate investors?
This is a possible future. Two different ways to organize the electorate for 2024. Can the Democrats stick to the equitable economy theme against Republican Congressional opposition and corporate hostility? In their favor, the laws already passed earlier this year are going to be implemented and people will receive the benefits. In 2023, the Democrats will still have control of the White House and the Senate, guaranteeing approval of Biden’s judges and executive appointments. They can do a lot to sustain the momentum in the next two years.
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