(C) Daily Kos This story was originally published by Daily Kos and is unaltered. . . . . . . . . . . Jack Holmes and Robert Reich on Biden SOTU Part 2: What Biden learned from Trump [1] ['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.', 'Backgroundurl Avatar_Large', 'Nickname', 'Joined', 'Created_At', 'Story Count', 'N_Stories', 'Comment Count', 'N_Comments', 'Popular Tags'] Date: 2023-02-08 If you have looked at what Charlie Pierce had to say about Biden’s SOTU, you should also see what Pierce’s colleague Jack Holmes has to say, along with some key observations from Robert Reich. First Holmes: The president's predecessor was a disgrace, but he hit on something real in American economics before he took office and became a bog-standard Republican. Jack Holmes has picked up on what made Biden’s SOTU so effective last night: Nobody put it better than Ralph Steadman when he told The Guardian that "Trump is a lout. He's a godawful disgrace to humanity." Those of us who sounded the alarm about the threat he posed to the constitutional order of this country were long ago vindicated. And yet it would behoove his harshest critics to admit that, while he was a bog-standard Republican in office—his main policy achievement was a ridiculous tax bill that was a giveaway to corporations and the rich—the way he talked about economic policy, particularly during the 2016 campaign, landed squarely with the American public. Certainly, based on his State of the Union address Tuesday night, President Joe Biden was listening back then. Re-shoring manufacturing jobs and supply chains, Buy American, rebuilding our infrastructure, fighting Big Pharma and lowering drug prices, countering China as a primary geopolitical priority. Even Biden's riff on junk fees, like those from Ticketmaster or preposterous "resort" fees at hotels, hit on frustration among ordinary Americans "tired of being played for suckers" by a system of powerful interests, in the face of which they feel helpless. Biden spoke directly to those people, too. You can say Democrats talked about this stuff before Trump, but it was never so central to their appeals as Biden made it on Tuesday evening. He also went farther than his predecessor in terms of genuine populism, just as he has in policy. He added in some full-throated support for the local union labor who will rebuild the aforementioned infrastructure, as well as the PRO Act that would shore up Americans' right to organize their workplaces. He added some frontal assaults on monopoly power after a period where it's come into full view that corporate concentration has made our supply chains more brittle and worsened inflation. emphasis added If you have gotten tired of neoliberalism, corporatism, triangulation, whatever, Biden’s SOTU last night was a return to traditional Democratic themes. You know — when progressivism was something for which Democrats didn’t have to apologize. ...Since the '80s, the United States has lived in Ronald Reagan's world, where corporations are our aristocrats and the rules have been made with them in mind: tax cuts, relentless deregulation, offshoring jobs to cut labor costs, and above all, Milton Friedman's rewriting of the rules of corporate governance to make share price the only metric by which a company and its executives are judged. For decades, Biden the senator was an accessory to that. But last night, he floated a new tax on stock buybacks, a process where firms use their profits to take stock off the market and hike up the share price rather than invest those proceeds in research and development or wages for their workers. It was a move to strike at the symbolic heart of this larger short-termist philosophy of corporate governance. Biden has married the antitrust and anti-corporatist instincts of an Elizabeth Warren with anti-elitist affect, and yes, the aesthetics of how these ideas are presented does matter. It probably helps that he's an old white guy to whom many labels don't seem to stick. emphasis added It’s a mistake to underestimate the legitimate resentments Trump tapped in 2016. Trump has a talent for picking up just enough truth to make his lies easier to swallow. As Holmes concludes: It's possible to admit that Trump said some useful things, and channeled some real frustrations with contemporary American life, without denying that he is a godawful disgrace to humanity. Biden has been paying attention; last night showed it. (And let’s give Bernie Sanders and Elizabeth Warren kudos for carrying the torch for progressive policies.) Robert Reich has also picked up on this, and adds some historical framing to put it in perspective. Biden has revived an older economic paradigm Friends, How can inflation be dropping at the same time job creation is soaring? It has taken one of the oldest presidents in American history, who has been in politics for over half a century, to return the nation to an economic paradigm that dominated public life between 1933 and 1980, and is far superior to the one that has dominated it since. Call it democratic capitalism. This is what Biden meant when he stated last night that he is a capitalist . He’s a democratic capitalist. The Great Crash of 1929 followed by the Great Depression taught the nation a crucial lesson that we forgot after Ronald Reagan’s presidency: that the so-called “free market” does not exist. It’s a fiction. Markets are always and inevitably human creations. They reflect decisions by judges, legislators, and government agencies as to how the market should be organized and enforced — and for whom. The economy that collapsed in 1929 was the consequence of decisions that had organized the market for a monied elite — allowing nearly unlimited borrowing, encouraging people to gamble on Wall Street, suppressing labor unions, holding down wages, and permitting the Street to take huge risks with other people’s money. Franklin D. Roosevelt and his administration reversed this. They reorganized the market to serve public purposes — stopping the excessive borrowing and Wall Street gambling, encouraging labor unions, establishing Social Security, and creating unemployment insurance, disability insurance, and a 40-hour workweek. They used government spending to create more jobs. During World War II, they controlled prices and put almost every American to work. Subsequent Democratic and Republican administrations enlarged and extended democratic capitalism. Wall Street was regulated, as were television networks, airlines, railroads, and other common carriers. CEO pay was modest. Taxes on the highest earners financed public investments in infrastructure (such as the national highway system) and higher education. Perhaps you, like I, have been puzzled why the press has been moaning about low unemployment is a problem, because rising wages drive inflation. As Reich might say, nonsense! Under democratic capitalism, rising wages are a feature, not a bug. But you hear the Federal Reserve finds it a matter of urgency to put more people out of work — while far less about inflation being driven by corporate price-gouging. Reich lays out what happened, and it begins with Ronald Reagan. (Charlie Pierce also traces America’s descent into crazy town back to Reagan.) As Reich explains, after laying out examples of how democratic capitalism worked, things changed: Then came a giant U-turn. The OPEC oil embargo of the 1970s brought double-digit inflation followed by Fed Chair Paul Volcker’s effort to “break the back” of inflation by raising interest rates so high that the economy fell into deep recession. All of which prepared the ground for Ronald Reagan’s war on democratic capitalism. From 1981 onward, a new bipartisan orthodoxy emerged that the so-called “free market” functioned well only if the government got out of the way (conveniently forgetting that the market required government). The goal of economic policy thereby shifted from public welfare to economic growth. And the means shifted from public oversight of the market to deregulation, free trade, privatization, “trickle-down” tax cuts, and deficit reduction — all of which helped the monied interests make more money. What happened next? For 40 years, the economy grew, but median wages stagnated. Inequalities of income and wealth ballooned. Wall Street reverted to the betting parlor it had been in the 1920s. Finance once again ruled the economy. Spurred by hostile takeovers, corporations began focusing solely on maximizing shareholder returns — which led them to fight unions, suppress wages, abandon their communities, and outsource abroad. Corporations and the super-rich used their increasing wealth to corrupt politics with campaign donations — buying tax cuts, tax loopholes, government subsidies, bailouts, loan guarantees, non-bid government contracts, and government forbearance from antitrust enforcement, allowing them to monopolize markets. It’s not a coincidence that the vast inequality now oppressing America got started about that time. Reich’s conclusion is a great summary of what Biden did last night — and over the last two years. Biden’s larger achievement has been to change the economic paradigm that has reigned since Reagan. He is teaching America a lesson we once knew but have since forgotten: that the “free market” does not exist. It is designed. It either advances public purposes or it serves the monied interests. Biden’s democratic capitalism is neither socialism nor “big government.” It is, rather, a return to an era when government organized the market for the greater good. Read all of Reich’s thoughts on the SOTU — and consider signing up for his sub stack account. These are the traditional values that Democrats used to stand for (and even Republicans didn’t challenge.) More please. [END] --- [1] Url: https://www.dailykos.com/stories/2023/2/8/2151853/-Jack-Holmes-and-Robert-Reich-on-Biden-SOTU-Part-2-What-Biden-learned-from-Trump Published and (C) by Daily Kos Content appears here under this condition or license: Site content may be used for any purpose without permission unless otherwise specified. via Magical.Fish Gopher News Feeds: gopher://magical.fish/1/feeds/news/dailykos/