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The next President will be beholden to regional elites A radical consensus is off the cards

Can Kamala Harris disturb the regional balance of power? (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

Can Kamala Harris disturb the regional balance of power? (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)


September 9, 2024   7 mins

It has become conventional wisdom in the waning days of Biden’s presidency to say that America has launched a new era in economics. Concepts like industrial policy, trade protectionism, antitrust enforcement and child subsidies — all once verboten during the heyday of globalisation — have been dusted off by a new generation of policymakers.

Taken together, several commentators believe these trends mark the end of neoliberal governance and the beginning of a different consensus in Washington — and in a narrow sense they are right. Biden’s policies do harken back to aspects of the New Deal and Cold War liberalism, while the populist Right have promoted their own vision of economic reform. But, for reasons intrinsic to America’s party system, neoliberalism’s final chapter has yet to be written.

There are real obstacles to consolidating a new consensus — and they go beyond the obvious influence of each party’s most prominent donors or the rulings of conservative justices. The current geographic division of political power in the United States between conservative red regions and progressive blue ones reinforces a status quo which greatly privileges economic elites in both party coalitions and curtails the possibility of faster action on urgent issues.

Compared with the latter half of the 20th century, when Democrats and Republicans contested a broad range of states and a handful of landslide elections took place, the strategies animating today’s party coalitions are primarily defensive. Bold incursions by either party into the other’s strongholds are now uncommon. And the Democrats’ big-tent posture under Kamala Harris is unlikely to disturb this balance of power.

The regional pattern of party dominance is reflected in the small set of swing states that have determined presidential elections since the 2000 contest between Al Gore and George W. Bush. But it is illustrated just as much, if not more so, by the rise of one-party control in a majority of US states. Democrats currently hold “trifectas” (the governorship plus a majority in a state’s upper and lower chambers) in 17 states, while Republicans have a veritable lock on 23. In an echo of past “sectional” distributions of party control, geography would appear to denote ideology in the first decades of 21st-century America.

“Geography would appear to denote ideology in the first decades of 21st-century America.”

And this regional dynamic seems to go hand in hand with an accelerating political realignment or class “dealignment”. This phenomenon, wherein since the late Nineties the GOP has attracted far more working-class voters than it used to while the Left has won the vote of more and more upscale voters, appears to wary progressives and eager “New Right” thinkers alike as a harbinger of a generation-defining political realignment. But, while that is partly true, what is more salient is that the parties now coalesce support on the basis of identity-driven loyalties and deeply felt negative partisanship, and are then able to limit their economic promises, hewing instead to vague rhetoric about growth and opportunity. Campaign strategists continue to prioritise mobilising core supporters, rather than courting workers who are wavering in their partisan affiliation or engaging the country’s estimated 80 million disaffected nonvoters.

Consequently, the respective opposition party in key regions has become feeble to the point of being virtually nonexistent. Modern Democrats have been routed in several Rust Belt and Southern districts where New Deal liberals once swept the polls, while Republicanism, once a vehicle for Reaganite yuppies and wealthy suburbanites, has been reduced in the citadels of high finance and the multicultural elite to an ornery badge of non-conformity. In both cases, wage-earners who want a bigger share of the economic pie and more accountable politicians must contend with de facto one-party rule in much of the country. This is a situation that has rarely favoured more egalitarian outcomes.

The past 30 years might have altered the composition of the Republican and Democratic coalitions, but it has also calcified the power of regional and national elites. The political realignment has failed to catalyse any fundamental change of priorities in Republican strongholds. With few exceptions, Republicans, in spite of Trump’s 2016 foray into economic populism, remain beholden to big players in older extractive industries and a host of middle-men magnates. The combined lobbying efforts of these interests prevent local- and state-level Republican officials from reorienting their party branches to populist ideas. The GOP response to teachers’ strikes and unionisation drives at auto plants and Amazon distribution centres has predictably ranged from indifferent to hostile.

Conservative thinkers advocating substantive overtures to labour still have high hopes for Trump’s running mate, Ohio senator J.D. Vance, and a few other “anti-globalist” Republicans in the Senate. But remove the ever-churlish Trump from the equation and the GOP all but loses its insurgent garb. Belying Trump’s fading anti-establishment message, rising GOP leaders such as Georgia governor Brian Kemp have staked their reputation on attracting high-profile business investment and pet development projects. Ribbon-cuttings, not a showdown with American oligarchs, are what motivates them. Vintage Trumpian populism shows no sign of supplanting the traditional business conservatism that still guides local GOP elites.

By contrast, the Democratic Party certainly appears more attentive to the needs and hardships of its own lower-income base. Indeed, the party’s self-image as the vehicle of social uplift has endured despite attracting a growing share of wealthy and college-educated voters in  recent election cycles. Even though Democrats have haemorrhaged support from working-class whites, they continue to heavily draw black and other minority wage-earners as well as white progressives who want a stronger welfare state. On the basis of this alliance, it is hoped by the party’s reformers that if Harris wins the presidency she will continue to legislate in Biden’s “post-neoliberal” vein.

This optimism derives in part from stalwart Democrats’ rose-tinted view of the records of blue cities and states. As housing costs began to soar last decade, a handful of Democratic governors and mayors billed themselves as reformers ready to take on powerful real estate interests and build more affordable housing. They likewise tried to aid their working-class constituents through minimum wage hikes, paid sick leave, experiments in fare-free public transit, and efforts to raise enrolment in health insurance subsidised by the Affordable Care Act, Barack Obama’s key social programme.

Scratch beneath the surface, however, and one finds little has been done in major US cities to alleviate economic insecurity. Whether due to permitting obstacles or vested interests, the housing shortage is now a full-blown crisis. And the problem is only bound to get worse. Nationwide, a record-breaking twelve million renters now spend half their income on housing while nearly seven million units need to be built for heavily rent-burdened low-income people. This shortfall stands in contrast to Harris’s plan to build just three million homes.

Previous efforts to ensure wages kept up with living costs have likewise proved insufficient. App-driven gig work has become ubiquitous in large metro areas, testing Democrats’ commitment to full employment and pro-worker principles. From California to Massachusetts, Big Tech has successfully fought legislation that would classify gig workers as employees and have tried to resist industry-specific minimum wage bills. Despite the Biden administration’s investments in infrastructure and clean energy, urban economies continue to reflect neoliberalism on steroids: the pace of gentrification, pushing poorer residents to outer neighbourhoods, has put them at a further disadvantage when it comes to finding decent work.

These trends have heightened the perception that Democrats cater to affluent professionals while offering, at most, minor relief to the wage-earners who provide their margin of victory in major elections. That is bad enough for a party once considered to be the tribune of workers. Rather absurdly, however, the Democratic Party’s deference to tech, real estate, and finance has been accompanied by ham-fisted choices which have exacerbated quality-of-life problems for many working families. These range from radical misjudgements influenced by social justice paradigms to less obvious but still pernicious forms of incompetence.

Most notoriously, recent ill-conceived experiments in drug decriminalisation under the framework of “harm reduction” in cities such as San Francisco, Seattle and Portland, Oregon eroded public safety enough to dampen economic activity in core neighbourhoods. Those case studies have since become a source of ridicule and embarrassment for Democrats trying to thread the needle between maintaining vibrant commercial centres and reforming the criminal justice system.

Unfortunately, other trends only underscore the ways in which blue-city governance has become strangely inept. Since the pandemic, truancy rates and learning loss in public schools have exploded — an outcome that more and more analysts attribute to extended remote-learning protocols in Democratic districts. Those decisions had a disproportionate effect on lower-income and nonwhite students whose family breadwinners were nurses, truck drivers and warehouse packers who by definition could not work from home.

Urban Democrats’ handling of immigration politics has also compounded tensions in their coalition. During Trump’s term, it was a point of pride among progressives to live in a sanctuary city that shielded undocumented immigrants from detention and deportation raids. The surge in migrants since 2021, however, has strained municipal resources and working-class neighbourhoods due to the pressure put on scarce housing and already-overcrowded schools.

Some on the Left insist concerns about these burdens are inherently reactionary. But for others it is a matter of public trust and effective administration. In key cities, congested streets teem with overworked “deliveristas” yoked to those very gig platforms which fail to provide a living wage; migrant mothers and children hawk snacks and cheap toys throughout parks and subways; while municipal agencies turn a blind eye to the proliferation of illegal and unsafe flats. All this has snuck up on hopeless local politicians at the same time that homelessness and evictions have spiked.

Conservatives, of course, are more than happy to pin these various challenges on misguided progressives. Yet, far from being too ambitious, Democrats’ urban governance instead reflects the extent of “policy capture” in their party. Absent a GOP fit to govern large cities, many of today’s business titans have turned to an all-too pliant Democratic Party eager to build its donor network. That relationship is unlikely to fray anytime soon, whatever one makes of the party’s episodic populism under Biden.

The truth is that if Democrats had devoted less energy to cosying up to elites and committed themselves to grand public projects and social investments in the spirit of the New Deal, fewer of their loyal supporters would be contending with extraordinary rents, mediocre jobs, underfunded transit, and underperforming schools. And a genuine record of governing “for the people” would be resonating in places which have long slipped from the party’s grasp.

One might think, therefore, that the unity displayed at the Democratic Convention is shallow and that Harris is helming a coalition susceptible to fracture. But the current state of the GOP campaign suggests Trump is no longer poised to exploit discontent in the Democratic base over their party’s contradictions and shortcomings. Nor are Republicans making the barest effort to offer a positive alternative. On the contrary, it is the Democrats who remain at once the party of government and the agents of, well, limited yet “hopeful” change.

This returns us to the regional divide which constrains the advance of a post-neoliberal order. Even if Harris wins and sticks with Biden’s flagship policies, her mandate — and thus her obligation to deliver reform — will be determined by the scale of her victory. It is certain the result will relieve elites in both parties. In fact, trench warfare between Democrats and Republicans may well revert to battles over culture, identity, and values, muffling vital issues of economic power and life chances. Until one party wages an insurgency that rallies struggling Americans of all stripes, transformational change will remain out of reach.


Justin H. Vassallo is a writer and researcher specialising in American political development, political economy, party systems, and ideology. He is also a columnist at Compact magazine.

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T Bone
T Bone
3 months ago

Can somebody please define what they mean by “Neoliberalism”?  Is it shareholder capitalism, free trade, low taxes and limited government.  Say the philosophy of Milton Friedman? If so, maybe the current problems might be the lack of “Neoliberalism.”  

Friedman put out a 10 Part Series in 1980 called Free to Choose.  I would encourage anyone generally interested in Economics to check them out.  He covers topics like why minimum wage laws suppress employment and contribute to inflation.   It almost seems like what we’re doing now is embracing 60s and 70s style economic policy with handouts and overregulation that led to Stagflation.

The reason we have so many “divisive culture war” debates is because the Left literally can’t debate economics without ascribing some ill-intent towards their opponents. They will always claim that “Neoliberal” policies like low taxes and limited spending harm “marginalized groups.”  An uninvolved government is believed to preserve the “status quo” and the Left believes in “equitable redistribution” or what the author calls an “egalitarian society.” 

All the Left’s economic nationalization policies are is doing is trying to make the entire country more like California.

jane baker
jane baker
3 months ago
Reply to  T Bone

It means “saying one thing and doing another” or ” do what I say not what I do”. It means being affluent enough to not be damaged by the luxury beliefs you promote for the enhanced status holding such views gives you,the contemporary equivalent of a 1950s Rolls Royce with mink lined interior,knowing that the poor people who actually live your luxury beliefs will suffer pain,humiliation, degradation and death. But they can’t enter your leafy suburb world with its invisible Paywall barriers so you’re OK.

Billy Bob
Billy Bob
3 months ago
Reply to  T Bone

It’s an ideology that believes the state should have no control of running core services.
It leads to utilities and public services being privatised in the belief the private sector would always run them more cheaply and efficiently, when in practice they’ve become much more expensive while being slashed to the bone and ever greater sums extracted by shareholders.
It’s taking a hands off approach to housing in the belief the market would provide enough homes, when in reality we now have large building companies land banking and drip feeding properties onto the market to ensure prices and therefore profits remain high.
It’s the outsourcing of entire industries abroad where wage costs are much lower, decimating entire towns and cities but thinking that being able to have a few cheaper foreign made products would somehow make up for it

Jim Veenbaas
Jim Veenbaas
3 months ago
Reply to  Billy Bob

Huh? Utilities are run privately in jurisdictions across the world with no issue. Why does it not work in Britain? I would also suggest the housing shortage is caused by govt regulations and restrictions. If land banking is taking place, maybe this is where the govt can step in. It seems kind of weird though. Why sit on a chunk of land? You’re creating unrealized profits. Seems to make more sense to take the actual profits and use that revenue to generate further investments and more profits.

RA Znayder
RA Znayder
3 months ago
Reply to  Jim Veenbaas

There are examples of relatively free markets regulating housing successfully but also where governments regulate well. They should just not fool around with housing.
Many Western countries have a housing crisis basically due to financialization. Deregulated of finance – the credit market – turned housing into a Ponzi. This literally triggered 2008, after which central banks reinflated the Ponzi. Liberalization of the market itself: opening the market to foreign investors and selling off public housing made it worse because many investors are not actually interested in housing but in a storage of value. At the same time there is also a lot of regulation: zoning laws, land speculation, NIMBY’ism and who knows what. That, again, is actually something many people invested in the market like to maintain. The problems are obvious, everyone not already in the Ponzi is being impoverished, increasingly even being pushed into homelessness.

Billy Bob
Billy Bob
3 months ago
Reply to  Jim Veenbaas

Have a read up of Thames water, and how billions of pounds has been syphoned off rather than being reinvested into the infrastructure. You see the issue repeated up and down the country with utilities as well as the rail network.
Land banking is also a serious issue. The UK housebuilding is dominated by a handful of large building companies, who have the means to hold on to large tracts of land which in turn artificially creates a shortage and pushes up prices and thus profits.

Norfolk Sceptic
Norfolk Sceptic
3 months ago
Reply to  Jim Veenbaas

With Inflation present, Land is a good investment.

Chipoko
Chipoko
3 months ago
Reply to  Billy Bob

I agree with you in this sense: I believe that essential services (‘utilities’ such as water, power, railways, etc.) should be run ads public sector organisations. In the UK privatisation of these has resulted in higher prices, often sub-standard services, and increased profits for private investors, to identify but a few of the consequences of this policy).
However, I to some degree part company with you on the outsourcing of industries abroad – which like you, I do not like. Yes, greedy capitalists are a substantial cause of this ill as your post appears to suggest. But globalisation is equally a consequence of the policies of people like Obama and Blair who are as much to blame as the capitalists. Outsourcing to developing countries was/is a principal means of transferring wealth from the developed world to the undeveloped world, along with sister globalist policies like compensating undeveloped countries for climate change and other such madness.

T Bone
T Bone
3 months ago
Reply to  Billy Bob

In the US, there is a direct correlation between government involvement and a high cost of living. Where income taxes are high, minimum wage laws are elevated and state services are plentiful; the median citizen has less disposable income relative to costs.

We have a direct comparison that everyone can see. You can stack up California against say Texas. Net migration for both both companies and people is into the less regulated, Texas. Why do home prices in California and New York cost so much more? It’s because the cost of everything is inflated by government spending and regulations.

Ian Wigg
Ian Wigg
3 months ago
Reply to  Billy Bob

It leads to utilities and public services being privatised in the belief the private sector would always run them more cheaply and efficiently, when in practice they’ve become much more expensive while being slashed to the bone and ever greater sums extracted by shareholders.

I would only partially agree in that privatisation where there is a natural monopoly (such as water, railways) should never be allowed. Likewise monopolisation of a sector (busses are a prime example) by a very small number of national or regional players.

Where there is a natural market privatisation has generally been a great success (prime example being telecoms.) Gas and electricity also worked well for the consumer (remember the retail providers were at the mercy of the commodities markets and primary producers with little margin to absorb sharp price increases, hence the number of company failures.)

Allowing privatised utilities to be sold to foreign companies (some of which are state owned or backed) allowing profits to be syphoned off to subsidise local markets and enrich foreign shareholders is a totally different argument.

It’s also worth remembering that when our utilities were privatised a significant percentage of the shares were reserved for UK domestic citizens to purchase. The not unreasonable, though naive, idea being that they would ne used to supplement retirement planning, long term care, and engender a culture of popular investment in the UK economy where everyone would benefit.

Unfortunately Thatcher hadn’t anticipated the venality of the average Brit who, seeimg the opportunity of a quick buck, immediately flogged their shares as soon as possible and spent the profit even quicker.

RA Znayder
RA Znayder
3 months ago
Reply to  T Bone

You should not confuse the sales pitch with the policies and intent of neoliberalism. What is often called “neoliberalism” is indeed based on the economics of the Chicago boys, Friedman, Hayek etc. Friedman in particular. However, as Graeber argued, it was a political project disguised as an economic project.
Some scholars studied the think tanks where neoliberalism was cooked up, to be served to figures like Reagan and Thatcher. They concluded that the underlying reason was mainly securing upper class wealth and power – they felt serious threatened as a class by te oil crisis, the economic downturn of the 70s and postwar consensus protecting the middle class still in tact.
In practice neoliberal policies deviate from the libertarian principles. But make no mistake, it has been like this from the start. It always included deregulation of financial capital but more obstruction for small businesses. Safety nets for big capital / the ultra wealthy and market discipline for everyone else. Offshoring and globalization under the banner of the free market but also protectionism behind shady trade agreements.

Norfolk Sceptic
Norfolk Sceptic
3 months ago
Reply to  RA Znayder

Funny, I remember the 1980s as a time when those that prospered were the wealth creators from every class, every educational level, and with different starting levels of wealth.

The Sixties and Seventies were full of strikes, but few were in the Financial sector: maybe that why that sector did so well.

Discouraging wealthy ‘wealth creators’ create even more wealth, (by creating more jobs), might please the lazy, but it doesn’t help anyone else. And the Elites just wait for the next opportunity.

RA Znayder
RA Znayder
3 months ago

What is wealth creation really? One could make the case that prosperity in the second half of the 20th century was mostly due to commercialization of WW II and Cold War tech.
Not saying that each and every of the reforms of the 80s were bad but in general the neoliberal project failed on most of its own terms like producing more growth and spending less on government. After deregulation of global capital we see a lot of private debt bubbles due to financialization. Is that wealth? One might be able to pretend the economy is booming with all the obscure speculation but is that wealth? One might even create a bunch of lucrative BS jobs. After 2008 the entire show had to be financed with public money anyway, which sort of shows there was something seriously wrong with this system and paradigm all along.

T Bone
T Bone
3 months ago
Reply to  RA Znayder

Of course scholars at Left-wing think tanks concluded that low taxes, minimal regulation and limited government “secures upper class wealth” because it’s doctrinal faith principle that provides no context.

The question should be which set of policies creates the highest amount of economic freedom and widespread prosperity. Take government imposed minimum wage hikes. When the government imposes $15 or $20 minimum wage, the beneficiaries are large corporations and trade unions not small businesses or working people. Smaller businesses simply hire less people or have to raise their prices. They can’t compete with larger entities in that environment.

Likewise, trade unions have very few if any members that benefit directly from minimum wage hikes but they’re huge supporters of the laws. They know minimum wage hikes will reduce their competition because non-union shops won’t be able to charge less for services. Thr end result is the inflated costs of all services on consumers, which is exactly what you have in California.

UnHerd Reader
UnHerd Reader
3 months ago

So tired of the predictable, derivative, shallow essays that this one is just another mediocre example of..

Kerry Davie
Kerry Davie
3 months ago

‘……it was a point of pride among progressives to live in a sanctuary city that shielded undocumented immigrants from detention and deportation raids. The surge in migrants since 2021, however, has strained municipal resources and working-class neighbourhoods….’  
Reminds me of the H L Mencken quip:
“Democracy is the theory that the common people know what they want, and deserve to get it good and hard”

jane baker
jane baker
3 months ago

Even if every single voter in the USA places their vote for Trump they will still announce that Kamachameleon has won. Of course if all the intelligent voters desist from voting and only the stupid portion of the electorate vote then Mama Camela will win a 100%.

RA Znayder
RA Znayder
3 months ago

The neoliberal system essentially already crashed in 2008. However, contrary to the late 70s, there were no powerful think tanks who had an alternative up an ready.
The moderate reforms of re-industrialization proposed by both parties will be complicated without broader reforms. For example, the system is designed in such a way that in the global market everyone sells their stuff to buy dollars, which they invest back into wall street. That way the US can run a huge trade deficit and remain a dollar-based superpower. Also with re-industrialization big capital might lose some of its wealth and power because it is harder to exploit labor and evade taxes in the West.
But it might of vital importance. In 2008 the system continued as a neoliberal zombie by doing the only thing we still know how to do: turn financialization into hyper-financialization. Because of this every speculative asset is going to the moon but in the real world everything stagnates. That cannot go on forever. Not only are the people slowly radicalizing but we also have to wonder if a civilization can really survive without a significant industrial base in the first place. It has been suggested that in an all-out war with China, the US might actually get into trouble because it simply lacks the production capacity to sustain it for very long.

Victoria Cooper
Victoria Cooper
3 months ago

Plenty of pundits, plenty of analysis but the bottom line is if Kamala, aka the Machine, gets in, say goodbye to democracy and western values. Globally.

UnHerd Reader
UnHerd Reader
3 months ago

This guy is obviously very observant, his last line proves he’s never even watched a Trump rally, or seen a still picture of the audience:
“Until one party wages an insurgency that rallies struggling Americans of all stripes, transformational change will remain out of reach”.
Someone has to tell him that this is called MAGA- Donald J Trump.

John Lammi
John Lammi
3 months ago

Florida and Texas should leave the union. I would like that