Sunday, May 3, 2020

Time For A New New Deal? Reality Check

Many people on the left are toying with the idea that a sort of New New Deal may in the offing. They theory is that this is a huge crisis and public opinion appears to be moving toward openness to "big structural change". Therefore, we will have such change to solve the crisis and that will be the much-dreamed-about New New Deal.
Michelle Goldberg made the case for this in her most recent column.
“I do think there’s an F.D.R. moment,” said Senator Edward Markey, Democrat of Massachusetts and co-author of the Green New Deal resolution, which calls for a huge new public works program to build environmentally sustainable infrastructure. “Like 1933 — which would be 2021 — we can see that it is now time to discuss universal child care, universal sick leave and a guaranteed income for everyone in our society.”
Unsurprisingly, mass unemployment — a particular catastrophe in a system in which most people’s health insurance is tied to their jobs — seems to have made Americans more supportive of New Deal-like policies. Figures from the left-leaning polling firm Data for Progress show that support for a Green New Deal has risen from 48 percent last May to 59 percent this spring. Backing for “Medicare for all” went from 47 percent in November to 53 percent in March, when coronavirus layoffs were just starting...
[C]ultural shifts pave the way for political reform. “When little children are making signs that say, ‘Thank You,’ and taping them up in the window for the mail carriers and UPS delivery folks, the world has changed,” Elizabeth Warren told me....
“In lots of ways I do think we’re closer to a Green New Deal than we were before, because the necessity of one has become more apparent,” said Rhiana Gunn-Wright, director of climate policy at the Roosevelt Institute and one of the thinkers who first conceptualized the Green New Deal. “It’s very difficult to talk about needing an economic transformation when the official metrics are saying this is a good economy.”
So: realistic or pipe dream? Probably somewhere in between. Significant change is certainly possible, though perhaps not on the scale that many on the left seem to have in mind. This is because, as Lane Kenworthy argues, people are not properly understanding the relationship between crisis, public opinion and policy change. Indeed, they are leaving out the most significant variable.
"Will the novel coronavirus crisis lead to similarly lasting advances [as the New Deal] in U.S. social policy?...The federal government has responded with extraordinary relief measures, including bailouts for small and large corporations, expanded sick leave, increased unemployment benefits, and direct cash transfers to individuals. The spending amounts to more than ten percent of GDP, a historic high—and there is almost certainly more to come.
It is possible that some of these measures will become permanent or that prolonged economic pain will move the electorate far enough to the left to produce lasting change. But neither outcome is likely. The lesson of past crises, Emanuel’s memorable quip notwithstanding, is that support for new public social programs quickly dissipates. When the welfare state has been enlarged for good, as it was during the New Deal and at the beginning of Obama’s presidency, the impetus has not been a crisis-induced wave of popular progressivism. Rather, it has been Democratic control of the White House and Congress. Crises help whichever party is out of power, and once in power, Democrats have often passed progressive legislation despite a public mood that is ambivalent toward such policies. If the coronavirus crisis tips the scales toward a bigger social safety net, it will be by pushing Democrats over the top in November, not by stoking sustained popular demand for more generous social policies.....
The main reason crises don’t produce lasting change in social policy seems to be that people quickly forget or turn their attention elsewhere, so their beliefs and preferences snap back to where they were before the emergency. Examining public opinion data going back to the early 1970s, the sociologist Lindsay Owens and I have found that recessions tend to have only temporary effects on Americans’ attitudes on a wide range of economic, social, and political issues. In addition, economic downturns cause some people to worry about their own financial well-being rather than the welfare of others, as the political scientist Ronald Inglehart has documented. And welfare state opponents and deficit hawks invariably warn against new public spending, arguing that the country can’t afford to take on additional debt.
Temporary expansions of the safety net thus rarely become permanent....When public social programs have been enlarged for good, it has tended to happen via the ballot box: progressive parties in government, not crises, make lasting social policy. That was the story of the 1930s, when voters punished the Republican Party for its management of the economy and ushered in a decade of Democratic control of the presidency and Congress. Big Democratic majorities in Congress also made possible the passage of President Lyndon Johnson’s Great Society programs in 1965 and 1966. In a careful examination of the politics of these periods, the sociologist Katherine Newman and economist Elisabeth Jacobs found considerable ambivalence and even opposition to proposed social programs among ordinary Americans. Progressive policy advance in both periods owed mainly to the efforts of political leaders, particularly Roosevelt and Johnson, who, Newman and Jacobs write, “moved boldly into a policy vacuum or forged on against growing antagonism. They pushed and pulled legislators into creating and then sustaining the progressive history of the 1930s and 1960s we now—mistakenly—see as a sea change in popular political culture.”
The Great Recession similarly contributed to passage of the Affordable Care Act not by causing a leftward shift in public opinion but by helping to dislodge Republicans from the White House and the Senate in the 2008 elections. Democrats won the presidency, a majority in the House, and 60 seats in the Senate—enabling the passage of the ACA......
In the coming decades, the United States will likely continue on its long, slow path toward a more social democratic version of capitalism. It is tempting to presume that the coronavirus crisis will hasten this process—that with their eyes newly opened to the precarious circumstances of frontline service workers, African Americans, people with preexisting medical conditions, the homeless, small-business owners, and an array of other vulnerable groups, more Americans will demand that policymakers broaden the size and scope of the country’s public social programs. Maybe that will happen. But the experience of past crises suggests it probably won’t. If the pandemic pushes us closer to social democracy, it will be because it boosts the electoral fortunes of the political party currently out of power, which happens to be one that’s already inclined to expand the social safety net."
This sober assessment is instructive. It's important for us to understand both the opportunities and limitations of the period we're in.
FOREIGNAFFAIRS.COM
Progressive sentiments subside as crises are forgotten.

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