January 25, 2023 (Wednesday)
Democrats are generally staying out of the way and letting Speaker Kevin McCarthy and the House Republicans make a spectacle of themselves. In order to get the votes to become speaker, McCarthy had to give power to extremists like Marjorie Taylor Greene (R-GA), and now has openly brought her on board as a close advisor, making the extremists the face of the new MAGA Republican Party. If McCarthy appears to have abandoned principle for power by catering to the far right, Representative George Santos (R-NY) hasn’t helped: stories of his lies have mounted, and financial filings yesterday suggest quite serious financial improprieties.
Even the Senate Republicans seem to be keeping their heads down while the House Republicans perform for their base. Demanding big cuts in spending before they agree to raise the debt ceiling has put the House Republicans in a difficult spot. They have been clear that they intend to slash Social Security and Medicare, only to have Trump, who was the one who originally insisted on using the debt ceiling to get concessions out of Democrats, recognize that such cuts are enormously unpopular and say they should not touch Medicare and Social Security. Senate Republicans have said they will stay out of debt ceiling negotiations until the House Republicans come up with a viable plan.
While the House Republicans take up oxygen, the Democrats are highlighting for the American people how, over the past two years, they have carefully and methodically changed U.S. policy to stop the concentration of wealth and power in the hands of the few.
In July 2021, President Joe Biden signed an executive order to promote competition in the economy. Since the 1980s, he said, when right-wing legal theorist Robert Bork masterminded a pro-corporate legal revolution against antitrust laws, the government had stopped enforcing laws to prevent giant corporations from concentrating their power. The result had been less growth, weakened investment, fewer small businesses, less bargaining power for workers, and higher prices for consumers.
“[T]he experiment failed,” he said.
Biden vowed to change the direction of the government’s role in the economy, bringing back competition for small businesses, workers, and consumers. Very deliberately, he reclaimed the country’s long tradition of opposing economic consolidation. Calling out both presidents Roosevelt—Republican Theodore, who oversaw part of the Progressive Era, and Democrat Franklin, who oversaw the New Deal—Biden celebrated their attempt to rein in the power of big business, first by focusing on the abuses of those businesses and then by championing competition.
The administration put together a whole-of-government approach to restore competition based on the 72 separate actions outlined in Biden’s executive order. A terrific piece today by David Dayen in The American Prospect suggests that the effort has worked. Overall, Dayen concludes, the executive order of July 9, 2021, was “one of the most sweeping changes to domestic policy since FDR.”
While administrations since Reagan have judged whether consolidation is harmful solely by its effect on consumer prices, the Biden approach also factors in the welfare of workers, including their ability to negotiate higher wages. It has also taken on the sharing of medical patents that have raised costs of drugs and equipment like hearing aids by preventing others from entering the market. It has taken on large businesses’ strangling of start-up competitors simply by buying them out before they take off. And, crucially, it has claimed the ability to review previous mergers that it now deems in violation of antitrust laws, citing the 1911 breakup of Standard Oil.
Dayen notes that one of the causes for a sharp drop in mergers and acquisitions in the second half of 2022 is that government agencies are willing to enforce antitrust laws. “Just about everything on competition has been hard-fought,” he writes, “[b]ut there’s plenty of evidence of real movement.”
Not only government agencies, but also the Democratic Congress—along with some Republicans—passed a number of laws that have shifted the economic policy of the nation. Biden is fond of saying that he doesn’t believe in trickle-down economics and that he intends to build the economy from the bottom up and the middle out. New numbers suggest the policies of the past two years are doing just that.
The December jobs report from the Bureau of Labor Statistics showed that job growth continues strong. The country added 223,000 jobs in December, and the unemployment rate went down slightly to 3.5 percent. The last two years of job growth are the strongest on record, and the country has recovered all the jobs lost during the pandemic. According to the White House, 10.7 million jobs were created and a record 10.5 million small businesses’ applications were filed in the past two years.
On Monday the Wall Street Journal reported that median weekly earnings rose 7.4% last year, slightly faster than inflation. For Black Americans employed full time, the median rise was 11.3% over 2021. A median Hispanic or Latino worker’s income saw a 4.8% raise, to $837 a week. Young workers, between 16 and 24, saw their weekly income rise more than 10%. Also seeing close to a 10% weekly rise were those in the bottom tenth of wage earners, those making about $570 a week. The day after the Wall Street Journal’s roundup, Walmart, which employs 1.7 million people in the U.S., announced it would raise its minimum wage to $14 an hour, up from $12.
Democrats promised that the CHIPS and Science Act would bring “good paying” jobs to those without college degrees by investing in high-tech manufacturing. A study by the Brookings Institution out yesterday notes that the act has already attracted multibillion-dollar private investments in New York, Indiana, and Ohio and that two thirds of the jobs they will produce are accessible to those without college degrees. Those jobs do, in fact, pay better than most of those available for those without college degrees, although Brookings urged better investment in training programs to make workers ready for those jobs.
The Inflation Reduction Act gave Medicare the power to negotiate drug prices with pharmaceutical companies and capped the cost of insulin for those on Medicare at $35 a month (Republicans blocked an attempt to make that cap available for those not on Medicare). It made hearing aids available over the counter, making them dramatically cheaper, and it also expanded subsidies for the Affordable Care Act. Today the Department of Health and Human Services announced that a record number of Americans enrolled in the ACA in the last open enrollment period: 16.3 million people.
Greg Sargent of the Washington Post notes that much of the investment from these laws is going to Republican-dominated states even though their Republican lawmakers opposed the laws and voted against them. The clean energy investments of the Inflation Reduction Act are going largely to those states, bringing with them additional private investment. A solar panel factory is expanding into Greene’s own district despite her vocal opposition both to alternative energy and to the Inflation Reduction Act.
For 40 years the Republican Party offered a vision of America as a land of hyperindividualism, in which any government intervention in the economy was seen hampering the accumulation of wealth and thus as an attack on individual liberty. The government stopped working for ordinary Americans, and perhaps not surprisingly, many of them have stopped supporting it. Biden refused to engage with the Republicans on the terms of their cultural wars and has instead reclaimed the idea that government can actually work for the good of all by keeping the economic playing field level for everyone.
Biden and members of his administration are taking to the road to tout their successes to the country, especially to those places most skeptical of the government. If they can bring the Republican base around to support their economic policies, they will have realigned the nation as profoundly as did FDR and Theodore Roosevelt before them.
