Democratic candidates are heading into the homestretch of the 2022 midterms with a message focused mainly on Trumpian extremism—but they might do well over the next two weeks to highlight the specter of a Trussian meltdown. Liz Truss, of course, is the English Conservative leader destined to become a trivia-question answer as the country’s shortest-serving prime minister. She owes her rapid downfall to her enactment of exactly the same sort of tax-cuts-on-autopilot program that the Republican Party is pledging to pursue with newly minted majorities in the 118th Congress. As the Truss economic program took hold, the British pound promptly tanked, mortgage rates skyrocketed, and financial markets went south.
The Truss debacle can provide Democrats with a vivid, real-world case study. It demonstrates the disastrous course of delusional supply-side policy-making—a teachable moment that the party could exploit in order to reverse a recent polling surge toward the GOP based on growing economic anxiety. Indeed, the hazards of Republican economic rule are, if anything, grimmer than the brand of Tory shock therapy that Truss carelessly unleashed, since a GOP-led Congress would use the encroaching federal debt ceiling next year to once more threaten to default on the nation’s debt obligations and hold the federal budget hostage to the party’s own pet brand of economic terrorism.
This is, after all, what GOP majorities did in 2011 and 2013, and, as MSNBC columnist Ryan Cooper notes, all four Republicans now vying to chair the House Budget Committee have already pledged to use the threat of an American default—which would almost certainly trigger a global financial crisis were it to come to pass—in order to extort cuts in social spending that they can’t achieve by other means because they are wildly unpopular. Invoking Truss’s fall alone might seem a stretch to the American electorate—but if it’s combined with the all-too-probable scenario of a debt-ceiling crisis, it could add up to a brutal blow to the Republican Party’s entirely unearned image as an economically trustworthy policy broker.
However, Democratic messaging in the homestretch has proven generally allergic to hard-hitting pocketbook appeals, as my colleague Jeet Heer observes. The party is spooked by the advance of inflation—and because it has long bought into the austerity-minded policies of ghouls like Fed Chair Jerome Powell, who has lately acknowledged his determination to trigger a recession in order to tamp down the inflation threat. Democrats are thus left without a strong populist message to counter the banking-engineered constriction of the country’s labor and consumer markets. That leaves most Democratic leaders stuck intoning a wan defense of status quo policies in a moment of broadening economic distress, essentially reviving the disastrous counter-MAGA refrain that Hillary Clinton adopted in 2016: America is already great. For many voters, that condescending message readily translates to “You’re too dumb to know how good you have it.”
The Democratic Party’s debilitating skittishness around inflation also prevents it from touting the genuine economic gains that the Biden administration has achieved. Writing in the Washington Monthly, Robert J. Shapiro points out that real wages have grown at a steady clip over the past two years—and that wealth for the lowest 20 percent of American households has also increased dramatically. “For the first time in memory,” he writes, “the wealth of households with relatively less income grew much faster than their higher-income counterparts.” These gains have also significantly dampened the impact of the dread spike in inflation, so that the underlying wage economy has essentially kept pace with the price convulsions wrought by supply-chain breakdowns and OPEC surges at the pump.
Admittedly, laying out this data in detail doesn’t make for an effective TV spot or social-media meme. That’s another reason Democrats should harness their economic appeals to an entirely justified chorus of doomsaying over the prospects of a Republican congressional majority tanking the world economy for the sake of its own ideological vanity. Last Friday, President Biden began sounding that theme in remarks from the White House, addressing Republicans’ economic plans directly. “They will crash the economy next year,” Biden warned, “by threatening the full faith and credit of the United States—for the first time in our history putting the United States in default—unless we yield to their demand to cut Social Security and Medicare. Let me be really clear: I will not yield. I will not cut Social Security. I will not cut Medicare, no matter how hard they work at it.”
However, when a reporter asked the president if he’d be willing to retire the debt ceiling—a century-old budget relic that no other major economy has to reckon with—Biden reverted to the posture of neoliberal caution: “That would be irresponsible,” he declared.
That’s the dilemma of Democratic messaging on the economy in a nutshell: conservative institutionalists can never persuasively come across as crusading populists. Back in early 2017, now–Senate majority leader Charles Schumer lamented to Atlantic writer Franklin Foer that the Democrats blew it in 2016 because “we didn’t have a strong, bold—populist, if you will—economic message.” (The image of the donor-friendly Schumer—who formerly headed up the Democratic Senate Campaign Committee and always represents Wall Street—as a fire-breathing populist is another absurdity we need not dwell on here.) Today, under the presidency of Joe Biden, of all people, the Democrats have the makings of such a message—and the flailing British political economy has furnished a powerful cautionary lesson in what will transpire under a reversion to a full-blown Republican-branded plutocracy. Over the next two weeks, we’ll learn whether Democratic candidates and consultants have enough moral imagination to get that message across.