Harris’ economics speech foreshadows a new national consensus

The first thing you should know about Kamala Harris’ big speech on economics on Wednesday is that it stood in diametric opposition to virtually everything Donald Trump has said about the economy.

I don’t mean in terms of policy, though it does that, too.

I mean in terms of language.

While the vice president spoke about real problems facing real people using simple words that everyone can comprehend, the former president always uses a specialized language that few people really understand.

If you don’t know how to speak gibberish, you’re lost.

Harris’ speech didn’t lose anyone.

The second and most important thing to know is that Harris’ speech was the closest a Democrat has gotten in my lifetime to an attitude toward economic problems that made Franklin Roosevelt a seminal president.

Gone were the old concerns about the perils of an activist government. There was zero talk of deregulating markets, no mention of “reforming” the tax code, and nothing about a college degree being the best way of achieving the American dream. Harris never used the words “supply-side economics,” “neoliberalism” or “Reaganomics,” but they are clearly what she meant when she identified “the failed policies of the past.”

“Over the past several decades,” Harris said, “our economy has grown better and better for those at the very top and increasingly difficult for those trying to attain, build and hold on to a middle-class life.”

Not only that, she set those decades in a context of economic justice. While many Americans worry about whether they can save enough to buy a house, whether their factory jobs will come back or whether they can afford good health care, “many of the biggest corporations continue to make record profits while wages have not kept up pace,” Harris said.

While past Democratic nominees, including Joe Biden, were primarily focused on big-picture economics, such as inflation, unemployment, and economic growth, Harris cut to the chase and said household expenses are what’s dragging people down, and she’s going to do something about it.

“Let’s be clear,” she said, after noting progress made under Biden, “for all these positive steps, the cost of living in America is still just too high. You know it and I know it. And that was true long before the pandemic hit.”

In addition to cutting taxes for the middle class, helping first-time homebuyers, providing affordable child care and paid time off, Harris said, “we will take on bad actors who exploit emergencies and drive up grocery prices by enacting the first ever federal ban on corporate price gouging.”

Correct me if I’m wrong, but I can’t think of another Democratic presidential nominee who has elevated expenses the way she has.

Lowering household expenses was one of three pillars of an “opportunity economy,” Harris said. The other two are investing in entrepreneurship and “leading the world in the industries of the future and making sure America, not China, wins the competition for the 21st century.”

She wants to:

• raise the tax deduction for startups to $50,000 and provide low- or no-interest loans so small firms can expand. The goal, she said, is 25 million new small businesses by the end of her first term.
• invest in biomanufacturing and aerospace, and stay “dominant in AI, quantum computing, and other emerging technologies, and expand our lead in clean energy innovation and manufacturing.”
• see that future technological breakthroughs “are not just invented, but built here in America by American workers.”
• strengthen factory towns, retool existing factories, hire locally and work with unions, and make jobs available for skilled workers without college degrees, and reform commercial zoning laws.

After characterizing the past several decades as being very good for the very top, Harris lumped her Republican opponent in with the elites who have enjoyed the spoils. Harris even made a distinction between people who work for a living and people who own so much they don’t have to work. She then made it clear which side she will stand on as president.

“Donald Trump intends to take America backward to the failed policies of the past. He has no intention to grow our middle class. He’s only interested in making life better for himself and people like himself, the wealthiest of Americans. … For Donald Trump, our economy works best if it works for those who own the big skyscrapers, not those who actually build them, not those who wire them, not those who mop the floors.”

During the debate, she attacked Trump’s greatest strength, his ego, and shattered it like a prizefighter would his opponent’s glass jaw. Here, she attacked Trump's second-greatest strength, the fact that he’s a billionaire.

He’s not one of us, she said, in essence.

He’s one of them.

That binary was implicit in her speech. Her goal wasn’t only to outline a plan to make the middle class “the engine of America’s prosperity, to build a stronger economy where everyone, everywhere, has a chance to pursue their dreams and aspirations, and to ensure that the United States of America continues to out-innovate and out-compete the world.”

It was to identify who’s standing in the way – people like Donald Trump.

She didn’t welcome the hate of “economic royalists,” as Roosevelt said. But in this speech, I think Harris went farther than any Democrat since the 1960s, including Biden, to reclaim FDR’s spirit of the fighting liberal. Like he did after the crash of 1929, Harris said to fix the problem, we need to first “move past the failed policies that we have proven don’t work.”

Then, she said, “I will be grounded in my fundamental values of fairness, dignity, and opportunity. And I promise you, I will be pragmatic in my approach. I will engage in what Franklin Roosevelt called ‘bold, persistent experimentation,’ because I believe we shouldn’t be constrained by ideology and instead should seek practical solutions to problems.”

Giving everyone a chance to succeed, Harris said, isn’t a matter of politics or ideology. “From my perspective,” she said, “it’s just common sense. It’s just common sense. It’s actually what works. When the middle class is strong, America is strong and we can build a stronger middle class.”

If you know economic history, you probably see this speech foreshadows a new paradigm. From the late 1970s to the 2010s, most people most of the time agreed with the Republicans on economic policy. It was a period of low corporate taxes, low regulation and minimal involvement in the economy by the federal government. That was the national consensus.

What Harris outlined last night flips all that on its head. Not only will she make rebuilding the middle class a centerpiece of her presidency, she will police the “rules of the road to create a stable business environment” and as a result, stop people like Donald Trump from extracting more wealth.

“I’m a capitalist. I believe in free and fair markets. … I know the power of American innovation,” she said. “I’ve been working with entrepreneurs and business owners my whole career. And I believe companies need to play by the rules, respect the rights of workers and unions, and abide by fair competition. And if they don’t, I will hold them accountable.”

The future is unwritten. If she loses, her speech will be forgotten.

But her policies are popular, and if she wins, her speech will be seen as a watershed – the moment when a new national consensus was born.