On Social Democracy in America
Published in Le Devoir
(Canada) on 13 March 2021
by Jean-François Lisée (link to original)
The Republicans who opposed President Joe Biden’s stimulus plan — all of them, without exception — make a strong argument. The $2 trillion is, for example, explained by Liz Cheney as “not so much about fighting the virus as it is about redistributing wealth.”*
She is absolutely right. Because the plan will allow, among other things, the reduction of the poverty rate for American children from its current level of 14% (one of the highest rates in a developed country) to 6%. The most prominent reductions will be seen among minority groups — African Americans and Latinos.
In fact, it is the largest transfer of wealth in recent history in the United States, since Donald Trump boosted the wealth of his billionaire friends by scandalously reducing their tax rates three years ago, for a total equivalent to that spent by Biden.
This first step in correcting inequality set the tone for the first 100 days of Biden’s presidency. A second gesture was the video message shared by the president the other Sunday, supporting the right of employees at an Amazon warehouse to unionize. This is a major signal. The creation of the American middle class after the Great Depression of the 1930s was nurtured by three major factors: industrialization, admittedly stimulated by the war effort; the distribution of wealth permitted by a tax rate that would be unthinkable today (a marginal tax rate of 90% for the wealthiest); and a sharp increase in unionization in the private sector (35%), which brought millions of workers into the middle class and thus into the consumer society. This was followed by the “Glorious 30,”** or rather the three decades of economic growth and of enrichment of all social classes. Bizarrely, CEOs of large businesses were breaking records at the time by only earning 20 times what the average worker was receiving. Today, you would need 200 times that salary to reach the bottom rung on that scale.
The collapse of redistribution and unionization since the 1980s (7% last year) has led to a sharp rise in inequality and resentment. Biden's desire to recreate the conditions for the emergence of a stronger middle class and a more equal society is evident.
The question is not whether America will enter into a new phase of social democracy. That is a certainty. The question is to what extent the political environment will allow Biden to succeed, while his hold on the Senate is tenuous.
The adoption of his stimulus package demonstrates that, while being limited to fiscal-type legislation, it has a way to succeed because he only needs 50% of the vote. That is how he’ll be able, in his budget, to overturn Trump’s tax cuts for the wealthy. He will likely also be able to push through a massive plan to rejuvenate infrastructure (badly damaged after years of neglect) and to therefore create, as he likes to say “lots of well-paying union jobs.”
However, as soon as he deviates from purely economic issues, such as increasing the minimum wage to $15 an hour, he faces an insurmountable obstacle: getting 60 votes in the Senate, otherwise known as 10 Republican votes. An obstacle that prevents immigration reform, as well as legislation on environmental or labor law matters (for many Democrats, the Quebec Labor Code is the gold standard for employee rights in North America). This 60-vote wall is not provided for in the Constitution. This is an internal rule that can be changed with 50% of the votes. For the moment, a few moderate Democratic senators refuse to get behind a change that is pompously called “the nuclear option.”
But a political tsunami may blow up this logjam and change the course of history. Stunned by their electoral defeats, Republicans have understood that high voter turnout will only lead to defeat for the foreseeable future. In the states, they have introduced 250 bills with the goal of making it more difficult to vote, in particular for minorities who predominantly support Democrats. The cynicism of the maneuver is unspeakable. Their objective is clear: to steal control of the House of Representatives from the Democrats, who only have a 9-seat majority.
There is a solution: a bill passed by the House of Representatives that would force states, including those controlled by Republicans, to obey basic democratic rules, and which will then invalidate their attempts at voter suppression. On this key democratic issue, all Democratic senators have to unite and strike down the 60-vote rule.
This could have consequences for the political balance and bring in four new Democratic senators. How? By transforming two jurisdictions into states: Puerto Rico, where 53% of voters voted to become a state in November, and the District of Columbia, where the federal government sits and which has a larger population than two other states in the country. All it takes is a vote in both Houses to enter into the Union: This means, for the foreseeable future, two Latino and two Black senators, Democrats to boot.
And enough, therefore, to allow Biden to completely reconnect his country with the legacy of Franklin Roosevelt’s social democracy. And who knows, maybe even to welcome in 30 more glorious years.
*Editor’s note: This quotation, accurately translated, could not be verified.
**Editor’s note: The “Glorious 30” refers to the years from 1945 to 1975 following the end of World War II in France.
She is absolutely right. Because the plan will allow, among other things, the reduction of the poverty rate for American children from its current level of 14% (one of the highest rates in a developed country) to 6%. The most prominent reductions will be seen among minority groups — African Americans and Latinos.
In fact, it is the largest transfer of wealth in recent history in the United States, since Donald Trump boosted the wealth of his billionaire friends by scandalously reducing their tax rates three years ago, for a total equivalent to that spent by Biden.
This first step in correcting inequality set the tone for the first 100 days of Biden’s presidency. A second gesture was the video message shared by the president the other Sunday, supporting the right of employees at an Amazon warehouse to unionize. This is a major signal. The creation of the American middle class after the Great Depression of the 1930s was nurtured by three major factors: industrialization, admittedly stimulated by the war effort; the distribution of wealth permitted by a tax rate that would be unthinkable today (a marginal tax rate of 90% for the wealthiest); and a sharp increase in unionization in the private sector (35%), which brought millions of workers into the middle class and thus into the consumer society. This was followed by the “Glorious 30,”** or rather the three decades of economic growth and of enrichment of all social classes. Bizarrely, CEOs of large businesses were breaking records at the time by only earning 20 times what the average worker was receiving. Today, you would need 200 times that salary to reach the bottom rung on that scale.
The collapse of redistribution and unionization since the 1980s (7% last year) has led to a sharp rise in inequality and resentment. Biden's desire to recreate the conditions for the emergence of a stronger middle class and a more equal society is evident.
The question is not whether America will enter into a new phase of social democracy. That is a certainty. The question is to what extent the political environment will allow Biden to succeed, while his hold on the Senate is tenuous.
The adoption of his stimulus package demonstrates that, while being limited to fiscal-type legislation, it has a way to succeed because he only needs 50% of the vote. That is how he’ll be able, in his budget, to overturn Trump’s tax cuts for the wealthy. He will likely also be able to push through a massive plan to rejuvenate infrastructure (badly damaged after years of neglect) and to therefore create, as he likes to say “lots of well-paying union jobs.”
However, as soon as he deviates from purely economic issues, such as increasing the minimum wage to $15 an hour, he faces an insurmountable obstacle: getting 60 votes in the Senate, otherwise known as 10 Republican votes. An obstacle that prevents immigration reform, as well as legislation on environmental or labor law matters (for many Democrats, the Quebec Labor Code is the gold standard for employee rights in North America). This 60-vote wall is not provided for in the Constitution. This is an internal rule that can be changed with 50% of the votes. For the moment, a few moderate Democratic senators refuse to get behind a change that is pompously called “the nuclear option.”
But a political tsunami may blow up this logjam and change the course of history. Stunned by their electoral defeats, Republicans have understood that high voter turnout will only lead to defeat for the foreseeable future. In the states, they have introduced 250 bills with the goal of making it more difficult to vote, in particular for minorities who predominantly support Democrats. The cynicism of the maneuver is unspeakable. Their objective is clear: to steal control of the House of Representatives from the Democrats, who only have a 9-seat majority.
There is a solution: a bill passed by the House of Representatives that would force states, including those controlled by Republicans, to obey basic democratic rules, and which will then invalidate their attempts at voter suppression. On this key democratic issue, all Democratic senators have to unite and strike down the 60-vote rule.
This could have consequences for the political balance and bring in four new Democratic senators. How? By transforming two jurisdictions into states: Puerto Rico, where 53% of voters voted to become a state in November, and the District of Columbia, where the federal government sits and which has a larger population than two other states in the country. All it takes is a vote in both Houses to enter into the Union: This means, for the foreseeable future, two Latino and two Black senators, Democrats to boot.
And enough, therefore, to allow Biden to completely reconnect his country with the legacy of Franklin Roosevelt’s social democracy. And who knows, maybe even to welcome in 30 more glorious years.
*Editor’s note: This quotation, accurately translated, could not be verified.
**Editor’s note: The “Glorious 30” refers to the years from 1945 to 1975 following the end of World War II in France.
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