Democrats’ right turn 30 years ago broke the party’s historic working-class base. As workers left the party, party leaders then treated those losses as an opportunity to pivot to the middle class.
I'm a New Dealer. Abundance is not a crock, it's what we had under the New Dealers in the postwar era, but it HAS to be done under SC culture in order for it to work for ordinary people.
New Deal had nothing to do with neoliberal economics. FDR was creating jobs here, not allowing corporations to ship out their jobs to the cheapest country.
Neoliberal economics is the Milton Friedman Trickle Down economics that has failed.
Abundance means Democrats need to build stuff. Under the New Deal Order we did build stuff. Neoliberalism doesn't build as much stuff and New Deal liberalism did, which it why Democrats should go back to New Dealism and stakeholder capitalism (SC) culture. Right now Democrats ARE neoliberal and have a bad case of NIMBYism. This is bad on both fronts. We need to do to New Deal (SC) economy AND ditch NIMBYism. So the Abundance idea is half right, but we need the SC piece too, otherwise it won't give the economic results to working people you want. But SC without Abundance won't work. You will need both.
I want to point out that saying Abundance is a crock is probably not the right word. It’s more of a revisionist history of how we got here. It’s doesn’t address Healthcare which is one of the most important issues in the country. Then it spends a lot of time on housing, affordable housing is a HUGE issue, but it isn’t because of bureaucracy holding up these poor struggling builders who can’t get through the paperwork! There are only a few builders even left in the country and they partnered with private equity. They are SITTING on hundreds of thousands of acres of land that have the building permits ready to go.. they are building a few homes to keep the shortage high and profits even higher. Example: in 2005 DR Horton built a record number of homes and made 1.4B . In 2023 they built 1/2 the amount of homes but made 4.7B?? Why? Because they can.
We have a monopoly problem and anyone writing a book about how to fix this disaster of an economy without bringing up monopolies and anti-trust are just trying to sell books, not actually coming up with the root causes and how to fix them.
I think you're right on the button about monopolies. And housing isn't the only industry afflicted. Matt Stoller had a good piece recently on Substack on a line of reasoning during the 1930s that held that the prevalence of monopolies tends to lead to fascism. There was much evidence for this in the chaotic years of Germany's Weimar republic
Curiously, this common conclusion hasn't been explored by researchers and historians since WWII and has basically vanished from the discourse. Perhaps because it's unfashionable in light of our own trajectory toward increasing monopoly situations.
Your comment about this not being a common conclusion is why I called Abundance a revisionist history. They actually talk about the Rockefeller’s investing in museums and the arts because they cared and thought the arts were important for the country. They did it to stay prison for tax evasion! 😂
Yes, I read Matt Stoller’s book Goliath several years ago, it was probably the best economic history lesson I’ve ever read. If you haven’t read it, I highly recommend.
Here's the point. If DR Horton can make more money selling fewer expensive houses, who is buying these houses? My thesis is its people with money to spend on houses. I can ask the same about stocks. How is it that stocks cost twice as much as they did for 150 year before the mid-1990's. The figure below shows the Case-Shiller index showing the quality-adjusted real home-price index and P/R (a measure of stock market valuation) begin to rise out of ranges where they had been for a century or more--something had changed.
I wish it could be that simple. The problem is the monopolies in almost every industry in the US will crush anyone trying to get into the market, we have to break up the monopolies and go after their anti-competitive practices. The stock market is also very corrupt. The only people making huge profits are the insiders and market manipulators. Stock buybacks need to be banned and I personally think we need to put a pause on options trading for a while to figure out how to regulate it more so it can’t be manipulated like it currently is. We also need to start tracking down and prosecuting insider trading at all levels.
Once we have the system under control citizen stakeholders ownership of business will be great and they will have a chance to succeed.
But if you drop NIMBYism, don't you risk losing much of the suburban middle class the party depends on now? Also, my understanding of the abundance agenda and neoliberalism suggests that it depends on the private sector to "build stuff." The New Deal was public -- and spectacular.
Private sector built lots of stuff during the New Deal era. Our entire industrial plant for example. Before the New Deal factories were multistory facilities located in major cities. New York was a major manufacturer. When we think of factory or manufacturing plant today we think of sprawling facilities with buildings with few stories, densely connected with utility lines. This is the WW II and postwar development, For example, here’s the growth of the fermentation plant where I worked over time. It started in 1946 with 16 fermentors representing “16F” of capacity and were initially used for penicillin and host of products thereafter. Those that are still operational are still running with the oldest of then turning sixty last year.
1946 16F
1948 28F
1952 68F
1957 108F
1964 152F
1967 362F
1979 440F
2003 360F
2021 285F
Manufacturing facilities of all types were build over that time, a tons of housing (the suburbs grew up then). What the Abundance folks want is for to see that growth again, and not just in Red states, but everywhere.
Good points, well supported! Thank you. The New Deal and, even more so, WWII built the foundation for this growth. It shows what a massive injection of federal money -- effectively a great vote of confidence in the nation -- can do.
Any electoral strategy on the federal level is basically absurd. Any half-conscious leftist would agree that the US federal electoral system is irredeemably corrupted by the necessity of billionaire class funding. There is no realistic means within the existing political system to rectify this. Yet, we are perpetually advised to pour our energies into running up the blind alley of US federal politics. The changes we need are not reformist. They are revolutionary.
Blue-collar labor is on the wane, but another labor is emerging in the predominantly dead-end gig jobs offered by the so-called service industries. That plus the blue-collar segment should be a powerful (and angry) combination.
When looking at Congressional voting data, it is important to take into consideration the lag effect. Since the vast majority of incumbents get re-elected, the elections that matter. The shift of the WC away from Democrats in the 1990’s reelects conditions of about a decade earlier when the average Congressmen of that time were elected see
The DLC was founded in 1985 to reflect the fact that the old New Deal working class coalition had ended. The cause of the death was the defection of the Democratic party’s deal with working class. This deal consisted if two aspects. The first was the fact that labor power (as measured by strike frequency) grew during Democratic administrations and fell during Republican ones, suggesting an implicit alliance between Labor and the Democratic Party. This was the case from 1912 to 1968.
The second was a covenant between the New Deal Democratic party who delivered tangible real-time benefits to millions of working people in 1933 through the NRA program. The president went on the radio and TOLD them what he was doing as it was happening in real time. The message was clear; Roosevelt had your back. And the result was tectonic, the 1934 landslide victory for the Democrats, a landslide that made US participation in WW II and the post war order possible.
The Roosevelt dispensation forced Eisenhower to uphold the New Deal, just as the Reagan dispensation forced Bill Clinton to uphold Reaganomics. This is why gaining the dispensation is so important. When Bernie Sanders talks about a “political revolution” what he means is winning a critical election that puts a Reconstructive president into office who establishes a new dispensation.
The New Deal economy produced stellar results for the working and middle classes
Such performance is like a high-performance car; it needs loving care to maintain its high level of performance. It is not like neoliberalism, which you can abuse like a beater car, and it will keep on delivering for the rich. You must run balanced budgets to keep an economy that delivers strong wage growth in operation. Democrats failed to do this, and the New Deal order fell.
The end of the gold standard was followed by inflation which ended the forty-year trend in strong real wage growth. Controlling the inflation meant high interest rates producing high unemployment. These conditions were maintained for a dozen years during which labor was in excess supply and so had no bargaining power. Under such conditions, unions collapsed. By the mid-1980’s that the Democrats could no longer deliver anything for labor was clear. It already showed up in Presidential voting. After the decade lag it showed up in Congress too.
I’m a democrat who will never defend neoliberalism! Abundance is a crock.
I'm a New Dealer. Abundance is not a crock, it's what we had under the New Dealers in the postwar era, but it HAS to be done under SC culture in order for it to work for ordinary people.
SC vs SP culture--how economies evolve
https://mikealexander.substack.com/p/how-economic-culture-evolves
My take on neoliberalism
https://mikealexander.substack.com/p/what-is-neoliberalism-an-empirical
What I'd like to see
https://mikealexander.substack.com/p/a-proposed-democratic-economic-vision
New Deal had nothing to do with neoliberal economics. FDR was creating jobs here, not allowing corporations to ship out their jobs to the cheapest country.
Neoliberal economics is the Milton Friedman Trickle Down economics that has failed.
Abundance means Democrats need to build stuff. Under the New Deal Order we did build stuff. Neoliberalism doesn't build as much stuff and New Deal liberalism did, which it why Democrats should go back to New Dealism and stakeholder capitalism (SC) culture. Right now Democrats ARE neoliberal and have a bad case of NIMBYism. This is bad on both fronts. We need to do to New Deal (SC) economy AND ditch NIMBYism. So the Abundance idea is half right, but we need the SC piece too, otherwise it won't give the economic results to working people you want. But SC without Abundance won't work. You will need both.
I want to point out that saying Abundance is a crock is probably not the right word. It’s more of a revisionist history of how we got here. It’s doesn’t address Healthcare which is one of the most important issues in the country. Then it spends a lot of time on housing, affordable housing is a HUGE issue, but it isn’t because of bureaucracy holding up these poor struggling builders who can’t get through the paperwork! There are only a few builders even left in the country and they partnered with private equity. They are SITTING on hundreds of thousands of acres of land that have the building permits ready to go.. they are building a few homes to keep the shortage high and profits even higher. Example: in 2005 DR Horton built a record number of homes and made 1.4B . In 2023 they built 1/2 the amount of homes but made 4.7B?? Why? Because they can.
We have a monopoly problem and anyone writing a book about how to fix this disaster of an economy without bringing up monopolies and anti-trust are just trying to sell books, not actually coming up with the root causes and how to fix them.
I think you're right on the button about monopolies. And housing isn't the only industry afflicted. Matt Stoller had a good piece recently on Substack on a line of reasoning during the 1930s that held that the prevalence of monopolies tends to lead to fascism. There was much evidence for this in the chaotic years of Germany's Weimar republic
Curiously, this common conclusion hasn't been explored by researchers and historians since WWII and has basically vanished from the discourse. Perhaps because it's unfashionable in light of our own trajectory toward increasing monopoly situations.
Your comment about this not being a common conclusion is why I called Abundance a revisionist history. They actually talk about the Rockefeller’s investing in museums and the arts because they cared and thought the arts were important for the country. They did it to stay prison for tax evasion! 😂
Yes, I read Matt Stoller’s book Goliath several years ago, it was probably the best economic history lesson I’ve ever read. If you haven’t read it, I highly recommend.
Here's the point. If DR Horton can make more money selling fewer expensive houses, who is buying these houses? My thesis is its people with money to spend on houses. I can ask the same about stocks. How is it that stocks cost twice as much as they did for 150 year before the mid-1990's. The figure below shows the Case-Shiller index showing the quality-adjusted real home-price index and P/R (a measure of stock market valuation) begin to rise out of ranges where they had been for a century or more--something had changed.
https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F09c751df-fdf4-42dc-9992-6293afb57b10_629x286.gif
Here I show the impact of this on working class people:
https://mikealexander.substack.com/p/some-observations-on-the-election#:~:text=Working%20class%20voter%20have%20valid%20reasons%20for%20displeasure%20with%20the%20Biden%20economy.
The cause, I submit is, is shareholder primacy culture, which became a majority component in business culture in the second half of the 1990's:
https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffba56814-e8f0-43f0-84aa-240f459b514d_611x285.gif
The solution is to return to the stakeholder capitalism business culture that we had when I was young.
I wish it could be that simple. The problem is the monopolies in almost every industry in the US will crush anyone trying to get into the market, we have to break up the monopolies and go after their anti-competitive practices. The stock market is also very corrupt. The only people making huge profits are the insiders and market manipulators. Stock buybacks need to be banned and I personally think we need to put a pause on options trading for a while to figure out how to regulate it more so it can’t be manipulated like it currently is. We also need to start tracking down and prosecuting insider trading at all levels.
Once we have the system under control citizen stakeholders ownership of business will be great and they will have a chance to succeed.
But if you drop NIMBYism, don't you risk losing much of the suburban middle class the party depends on now? Also, my understanding of the abundance agenda and neoliberalism suggests that it depends on the private sector to "build stuff." The New Deal was public -- and spectacular.
Private sector built lots of stuff during the New Deal era. Our entire industrial plant for example. Before the New Deal factories were multistory facilities located in major cities. New York was a major manufacturer. When we think of factory or manufacturing plant today we think of sprawling facilities with buildings with few stories, densely connected with utility lines. This is the WW II and postwar development, For example, here’s the growth of the fermentation plant where I worked over time. It started in 1946 with 16 fermentors representing “16F” of capacity and were initially used for penicillin and host of products thereafter. Those that are still operational are still running with the oldest of then turning sixty last year.
1946 16F
1948 28F
1952 68F
1957 108F
1964 152F
1967 362F
1979 440F
2003 360F
2021 285F
Manufacturing facilities of all types were build over that time, a tons of housing (the suburbs grew up then). What the Abundance folks want is for to see that growth again, and not just in Red states, but everywhere.
Good points, well supported! Thank you. The New Deal and, even more so, WWII built the foundation for this growth. It shows what a massive injection of federal money -- effectively a great vote of confidence in the nation -- can do.
Good article, reminds me of this one: https://www.theatlantic.com/politics/archive/2016/10/how-democrats-killed-their-populist-soul/504710/
Any electoral strategy on the federal level is basically absurd. Any half-conscious leftist would agree that the US federal electoral system is irredeemably corrupted by the necessity of billionaire class funding. There is no realistic means within the existing political system to rectify this. Yet, we are perpetually advised to pour our energies into running up the blind alley of US federal politics. The changes we need are not reformist. They are revolutionary.
Blue-collar labor is on the wane, but another labor is emerging in the predominantly dead-end gig jobs offered by the so-called service industries. That plus the blue-collar segment should be a powerful (and angry) combination.
When looking at Congressional voting data, it is important to take into consideration the lag effect. Since the vast majority of incumbents get re-elected, the elections that matter. The shift of the WC away from Democrats in the 1990’s reelects conditions of about a decade earlier when the average Congressmen of that time were elected see
https://digital.library.unt.edu/ark:/67531/metadc29655/m1/1/high_res_d/RL32648_2010Nov02.pdf
The DLC was founded in 1985 to reflect the fact that the old New Deal working class coalition had ended. The cause of the death was the defection of the Democratic party’s deal with working class. This deal consisted if two aspects. The first was the fact that labor power (as measured by strike frequency) grew during Democratic administrations and fell during Republican ones, suggesting an implicit alliance between Labor and the Democratic Party. This was the case from 1912 to 1968.
https://mikealexander.substack.com/p/how-inequality-reduction-happened#:~:text=Table%201.%20Trends%20in%20strike%20frequency%20over%201896%2D1976
The second was a covenant between the New Deal Democratic party who delivered tangible real-time benefits to millions of working people in 1933 through the NRA program. The president went on the radio and TOLD them what he was doing as it was happening in real time. The message was clear; Roosevelt had your back. And the result was tectonic, the 1934 landslide victory for the Democrats, a landslide that made US participation in WW II and the post war order possible.
https://mikealexander.substack.com/p/how-the-new-dealers-gained-the-ability
This victory created the Roosevelt dispensation right then and there. See link for what a dispensation is:
substack.com/p/the-importance-of-a-political-dispensation
The Roosevelt dispensation forced Eisenhower to uphold the New Deal, just as the Reagan dispensation forced Bill Clinton to uphold Reaganomics. This is why gaining the dispensation is so important. When Bernie Sanders talks about a “political revolution” what he means is winning a critical election that puts a Reconstructive president into office who establishes a new dispensation.
The New Deal economy produced stellar results for the working and middle classes
https://mikealexander.substack.com/p/winners-and-losers-part-i-what-economic
Such performance is like a high-performance car; it needs loving care to maintain its high level of performance. It is not like neoliberalism, which you can abuse like a beater car, and it will keep on delivering for the rich. You must run balanced budgets to keep an economy that delivers strong wage growth in operation. Democrats failed to do this, and the New Deal order fell.
https://mikealexander.substack.com/p/how-the-new-deal-order-fell
The end of the gold standard was followed by inflation which ended the forty-year trend in strong real wage growth. Controlling the inflation meant high interest rates producing high unemployment. These conditions were maintained for a dozen years during which labor was in excess supply and so had no bargaining power. Under such conditions, unions collapsed. By the mid-1980’s that the Democrats could no longer deliver anything for labor was clear. It already showed up in Presidential voting. After the decade lag it showed up in Congress too.