How Democrats Learned to Seize Opportunities – 09/02/2021 – Paul Krugman

About ten years ago, just before Barack Obama took office as President and in the midst of a recession, I wrote an inconsolable column called “The Obama Gap”. At a time when many saw the president-elect as a transformative figure, I regretted the prudence of his economic policies. The stimulus he had proposed, I argued, would be far short of what was needed.

Unfortunately, I was right. And as I also warned you at the time, Obama didn’t get a second chance; the perceived failure of its economic policy, which despite the easing of the slowdown did not put an end to it, eliminated any possibility of future action.

The good news – and this is really great news – is that Democrats seem to have learned their lesson. Joe Biden may not sound like Franklin Roosevelt’s second advent; Chuck Schumer, in charge of the smaller majority in the Senate, seems even less transformative, but everything points to the fact that together they are on the verge of implementing an economic bailout which, unlike Obama’s stimulus, is really in place. occasionally.

In fact, the plan is aggressive enough that some Democrat-leaning economists fear it is too big and carries inflation risk. But I’ve already widely argued that they were wrong – or, more accurately, as Treasury Secretary Janet Yellen says, the risk of doing too much outweighs the risk of doing too much, of overheating the ‘economy. In fact, an insufficient plan to raise concern about overheating would probably have been too small.

But how did Democrats get so daring? The answer is that they have learned important things, about economics and politics, since 2009.

Economically, Democrats have finally stopped believing in the specter of debt and the fairy of confidence, which will make everything better if the government cuts spending.

There was a time when many Democrats – including Obama – accepted the proposition that public debt was a huge problem. They took seriously the warnings of people like the MP [republicano] Paul Ryan, that the debt was a “threat to the existence” of the country. But predictions of impending fiscal disaster have continued to prove false, and at this point mainstream economists care far less about debt than they have in the past.

Some Democrats were also concerned that big spending programs would hurt the economy by undermining business and investor confidence and, on the other hand, believed that caution would be rewarded with increased private investment. But this doctrine has also been denied by experience; austerity does not generate confidence; it only creates suffering.

But while Democrats have learned a lot about the economic reality of 2009 so far, they have learned even more about the political reality.

Obama came to power sincerely believing that it was possible to approach the opposition, and that Republicans would help him cope with the economic crisis. Although the opposition used scorched earth tactics against him, the president continued to look for a “big deal” on the debt issue. He saw the rise of the Tea Party as a “fever” that would pass in his second term. In short, Obama was naive.

Many progressives feared that President Biden, who served in the Senate in a less polarized era and who talks a lot about unity, would repeat Obama’s mistakes.

But so far he and his colleagues in Congress seem poised to think big, even if that means working without Republican votes.

By the way, one thing that may encourage Democrats is the fact that Biden’s policies are truly unifying, if you consider public opinion, not the actions of politicians. Biden’s plan to tackle Covid-19 has strong public approval – far greater than the approval of Obama’s stimulus package in 2009. If, as seems likely, no Republican votes in favor of the plan in Congress, it will prove the extremism of Republicans, not Biden’s failure to seek membership.

Additionally, Biden and company seem to have learned that acting cautiously at first doesn’t allow you to accumulate political capital to do more later. Instead, a government that fails to deliver tangible benefits to voters in its first few months will have wasted its advantage and will not have the opportunity to correct its mistakes. Taking bold action to fight Covid-19 now offers the best hope of dealing with infrastructure, climate change and other challenges later.

Oh, and Democrats finally seem to have learned that voters aren’t interested in the lawsuits. Very few Americans know Trump’s tax cut was forced to pass, after party line vote, using reconciliation rules [entre as versões do Senado e Câmara para um projeto de lei], the same maneuver Democrats are making now, and hardly anyone is bothered.

Finally, I suspect Democrats have realized that choosing the right policies is more important in 2021 than it was in 2009 – and not just because of the economic situation. When much of the opposition party does not recognize election results, accepts insurgencies, and accepts conspiracy theories into its ranks, it makes no sense to come up with policies that may not address what is necessary, and thus give strength to the opponents in the following years.

The best summary is: Debt is not and never has been a threat to the future of our nation. The real threat is the illiberal Republican Party, which looks more and more like a far-right European party and less and less like a normal political party. Coming up with weaker policies, in a way that might benefit the prospects of rivals like these, is a bad idea – and I hope Democrats know it.

So this time the Democrats are ready to seize the opportunity. Hopefully what they are offering is enough.

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