Moving Past Neoliberalism Is a Policy Project

In order to test whether improving people’s lives can convince them to support Democrats, you have to, well, improve people’s lives.

By Matt Stoller David Dayen

Tagged DeliverismEconomic Policy

For years, Joe Biden’s approval ratings have been in the doldrums, with almost 60 percent of voters unhappy with his management of the country and the economy. This isn’t necessarily a political catastrophe, though it could be. In the voting booth, the Democrats did better in the 2022 midterm elections than any incumbent party has in 20 years, despite Biden’s lackluster polling. But it is worrisome nonetheless, and is consistent with Barack Obama’s presidency, which saw the Democrats lose over 1,000 elected positions and then lose the White House to Donald Trump.

We aren’t political consultants, and we aren’t going to tell anyone how to win elections. But our political theory, nicknamed “deliverism,” is that Democrats, when in government, need to not only say popular things, but actually deliver good economic outcomes for voters. They did not do this for many years, and neither did the GOP, which is why Trump blasted through both party establishments. Deliverism is linked to the death of neoliberalism, because it’s an argument that Democrats could reverse their toxic image in many parts of the country by reversing policy choices on subjects like NAFTA, deregulation, and banking consolidation, which have helped hollow out the middle class for decades.

Deepak Bhargava, Shahrzad Shams, and Harry Hanbury, in a piece called “The Death of ‘Deliverism,’” recently argued otherwise, asserting that Democratic unpopularity shows that a narrow focus on policy to improve people’s lives is largely irrelevant to electoral outcomes. They point to a series of Democratic policies that, though enacted, did not help win votes.

It’s an intriguing thesis, and worth considering. If economic policy doesn’t really matter to voters, as many political scientists argue, then politics really should orient itself around cultural questions. That said, these authors use an odd basket of evidence, and in doing so, actually show the real political problem with improving the material lives of Americans. The problem is that most Democrats are so set on defending our policy legacy against right-wing attacks that they have no idea how voters experience the economy, or how our policies impact people.

Take the Affordable Care Act, which now seems to have a strong political anchor after years of political controversy. Bhargava, Shams, and Hanbury argue that the ACA is “Obama’s signature policy achievement” that improved people’s well-being. Yet, they say, there’s a paradox, as it “did virtually nothing to shift political allegiances.” If those who believe that helping people economically are right, they allege, then the ACA should have switched large segments of the voting electorate.

But is this a fair test? Let’s take a quick look at how Obamacare actually affected normal people. First, the goal of Obamacare was to insure more people, and it did. Roughly 85 percent of Americans had health insurance in 2008. Today it’s about 90 percent. So 5 percent of the country had something they didn’t have before, and it’s quite possible to say that many lives were saved. Biden built on this by giving higher subsidies to individuals to purchase insurance if they don’t get it from an employer or qualify for a public plan.

What about the other 85 percent? Well, in 2009, the average medical cost for a family of four was $15,609. Today it’s $30,260. That’s almost the cost of a new car in health care costs, every single year. In other words, 85 percent of potential voters have the same or a worse experience with health care today, versus 5 percent who have insurance. It’s hard to call that a net economic improvement in the lives of most voters. Obama himself said that the ACA would reduce costs by $2,500 a year. He knew what sells, even if he didn’t deliver that to voters. (Biden knows, too, as his promise to negotiate lower drug prices in Medicare attests. But the results of those negotiations won’t kick in until 2026.)

There’s more. The typical Democratic talking point, that Obamacare prevented discrimination against preexisting conditions, isn’t true. Since the ACA kicked in, the number of high-deductible health care plans has skyrocketed from 7 percent to 32 percent. That means if you have, say, diabetes, you get to pay $2,000 or more in cash every single year before your health insurance kicks in. That may be better for some people than the previous system, but is that nondiscrimination? No.

That’s before you get to the fact that routine drugs used in all hospitals are in chronic shortages, including many drugs used in the treatment of cancer. Hospital understaffing is at a point of crisis, with as many as 124,000 physicians needed by 2034, according to the Association of American Medical Colleges. Nurses are in such demand that those who travel to fill shortages can make as much as $10,000 a week. And mass hospital closures have left medical deserts in large swathes of America, with nearly 80 percent of rural counties left “medically underserved.”

It’s possible, even likely, that our health care system would have been worse without the ACA, and many wonks make this point. But our point is that how voters respond to Obamacare is not a basis for testing the political reaction to a program that improved the material life of Americans under Democrats. Because the fact is, health care as experienced by most people is more expensive and harder to obtain. If you can’t accurately understand how Americans experience our culture and economy, the very acts of seeking the care to live or die, then your judgment on political and policy arguments will be off.

Bhargava, Shams, and Hanbury’s essay is full of this style of analysis. In the opening anecdote, they are mystified by the lack of enthusiasm from working-class parents for the monthly child tax credit checks passed in Biden’s American Rescue Plan. One person asked, “What’s the catch?” Indeed there was one: The credit expired within six months! The cynical assumption that the monthly checks wouldn’t last is an artifact of decades of Democrats failing to follow through on promises—and it turned out to be completely warranted.

Polling at the time showed that voters who received the benefits were more likely to support Democrats until the credit expired, when they shifted to Republicans by 15 points. Yes, you can thank Joe Manchin almost entirely for this; but the point is that it’s not surprising a temporary policy that ended didn’t flip voters.

In fact, virtually all of the pop-up safety net provisions delivered during the COVID-19 pandemic—some passed under Trump, some under Biden, making it hard for ordinary individuals to differentiate—have been rolled back, with millions losing Medicaid benefits, expanded food stamp payments, enhanced unemployment, rental assistance, and more. Democrats might say it wasn’t sustainable to maintain all these policies after the pandemic. But the lived experience of beneficiaries is that they lost government help.

The authors point out that in 2020, lots of voters supported a higher minimum wage in Florida and Nebraska, and yet still voted for Republicans. That’s evidence, they assume, that people won’t vote for Democrats even if that would increase the minimum wage. Once again, this ignores lived experience. People don’t want a higher minimum wage, they want higher wages. They don’t care if that comes from a tighter labor market or direct wage policy.

If you look at the data, yes, under Trump, low-income wages went up faster than they did under Obama. You can write “MAGA extremists” and “racism” as much as you want and cite political scientists on racism, but Obama didn’t deliver on higher wages, and Trump did. (Wages for lower-income workers have also been boosted under Biden, which may explain some of his political success, though those gains have been eaten away by inflation for higher earners, which may explain Biden’s ceiling.)

The authors are right that a pure policy program is not enough, and that we need political narratives that voters find compelling. But it’s unclear what the authors’ prescription is on that front. They say that Democrats must “construct a social identity,” speak to social isolation and disorder, make clear who the culprits fueling this discontent are, and offer a vision of the good life through organizing that fosters a sense of community. They offer a few examples of smaller community organizations that they say do that. But the main example of a broad community uprising that checked most of these boxes, organizing people into a meaningful fight against defined enemies, happened in the Progressive Era.

Medical costs are up and wages are not for one reason that is very easily understood by Americans: monopolies. Hospitals, doctors’ practices, health insurance, pharmaceuticals, ambulances, nursing homes, rehab facilities: Every part of our health care world is increasingly controlled by greedy bankers who kill people for money. Meanwhile, big corporations have consolidated over the last 40 years, pushing wages down for workers by tens of thousands of dollars a year. That’s an easy, true, and compelling story, and it’s the story that carried nineteenth-century progressive populists, and the New Dealers behind them. It brought together workers, farmers, and business upstarts who were being overrun by concentrated power. In the hands of Franklin Roosevelt, it was even seen as an antidote to fascism.

This is not a story that today’s Democrats are comfortable telling, and not one that today’s progressives, for all their discussions of the need to move beyond neoliberalism, have internalized. Joe Biden sort of gets there, and the midterms showed voters will shockingly support an unpopular 80-year-old. Some of the best things he’s done, like a fight on insulin that led the drug companies to lower prices, show this instinct. But his Administration is too split to offer a coherent policy or political agenda.

The phenomenon of negative partisanship is real, and fighting Republicans who seek to take away rights and benefits, from the freedom to read the books one wants to the right to an abortion, will continue to pay political dividends for Democrats. But if you want to test whether improving people’s lives sells, then you have to improve people’s lives.

It’s embarrassing to admit the last few decades of Democratic politics have delivered bad economic outcomes for most people. To admit that, we’d have to admit that cherished programs that we fought for, like Obamacare, didn’t work out as advertised. But if we can’t understand that reality, then it’s going to be harder than it should be to come up with a coherent and winning argument to realign the country around a progressive political agenda.

Read more about DeliverismEconomic Policy

Matt Stoller is the Director of Research at the American Economic Liberties Project. He is the author of Goliath: The Hundred Year War Between Monopoly Power and Democracy (2019).

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David Dayen is the executive editor of The American Prospect. He is the author of Monopolized: Life in the Age of Corporate Power (2020) and Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud (2016).

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