My column today in the Pittsburgh Post-Gazette.

Bruce Ledewitz: How the Democratic party must change to win in 2028

Special to the Post-Gazette

Nov 18, 2024

5:30 AM

No, Donald Trump is not a political genius; we are not all MAGA; Kamala Harris is not a vapid non-entity; the institutions of liberal constitutional democracy do not need to be changed.

There was no political realignment. There is no mandate.

The 2024 presidential election was a referendum on the performance of Joe Biden’s administration and people were dissatisfied. That is what the 2024 presidential election was about. The result had little to do with Harris.

Democrats need to change

But why were people dissatisfied when the economy is so strong? In 2022, economists began to debate whether higher interest rates would lead to a recession.

They eventually concluded that there would be no recession because households had built up surplus wealth during the pandemic from government aid. As people gradually spent this money, that spending would keep the economy afloat. That is what happened. There was no recession.

However, economists missed the psychological consequence of that draw down. For the past two years, many Americans have had the experience of gradually becoming poorer. Two years ago, they had money in the bank and could pay their bills. Now they are back to normal and much worse off than in 2020. Who would not be dissatisfied?

Of course, that draw down was inevitable with one-time government pandemic spending. But that decline in wealth contributed to a negative national mood. That mood will improve as people’s bank balances gradually grow again.

Does that mean Democrats need not do anything different about the economy?

Well, we should not blow up the system that has made this country rich and the envy of the world. New York Times columnist David Brooks wonders whether Democrats need to be as disruptive on the left economically as Trump is on the right. The answer is no. Trump’s supporters are about to find out how bad his economic policies are.

And you should never turn to progressives to solve economic problems. Where have progressives ushered in prosperity?

The mistake that Democrats made was not redistributing income in the ways that classic economics promises. Free trade theory teaches that a good deal is one where the winners from the deal could compensate the losers and still make money.

Encourage and tax

In theory, that works. In practice, you actually have to do the redistribution. There should be a Trade Compensation Office with a lot of money.

If someone loses a job to foreign competition, that person should be paid — let’s say $500,000. It could be funded with tariffs on imported goods. After all the rest of us benefit with lower prices from that person’s sacrifice.

And the compensation should be money, not retraining or any other government programs. That is why the current Trade Adjustment Assistance program is ineffective. It caps wage differential payments at $12,000 over two years. Pocket change. With real money instead of bureaucracy, workers could decide for themselves whether to retrain.

Jobs lost to climate change policies could be treated the same way. If a coal plant closes, workers should be paid significant compensation. Those coal workers make a sacrifice so the rest of us can benefit from lower greenhouse gas emissions.

This is also the way that the minimum wage works. While raising it always costs some jobs, the higher minimum wage forces wage increases all the way up the chain. That is income redistribution from shareholder returns to workers. No further government intervention is needed. No new regulations either.

In a general sense, this should be the economic policy of the Democratic Party. The Party slogan should be “Deregulate and Redistribute.”

Deregulation allows the pie to grow. Democrats should join with Republicans in cutting government red tape. Housing would be much more affordable if zoning laws were streamlined and to some extent nationalized. More clean energy sources would be coming online if localities could not block them.

Redistribution is what people need. That is, people need money, not government programs. Social Security basically works that way.

It is a scandal that Republicans keep cutting taxes and Democrats go along with it. No wonder we have such a large national debt. The deal with the rich should be, we will make it easier for you to make a lot of money. But then you have to give a large part of it back for people who need it more than you do.

The system worked, government failed

Entrepreneurs have always been happy to make this deal. They are interested in doing new things in new ways. Government should get out of their way. Only when they have been successful, should government step in and take some of the resulting wealth.

This is the system that invented the Internet. And artificial intelligence. And a reusable rocket booster. It is the most successful and productive economic system in world history. It did not fail in 2024. We failed to distribute its success in fair ways.

That is relatively easy to fix. And when the Democratic Party fixes that, you won’t have to ask how the Party should go about winning the next presidential election.

Bruce Ledewitz is a professor of law at the Thomas R. Kline School of Law of Duquesne University. His previous article was “Mr. President: Pardon Donald Trump.” The views expressed do not represent those of Duquesne University.

First Published: November 18, 2024, 5:30 a.m.