Don’t worry, this isn’t one of those end of year wrap up letter.
This is actually about how Democrats are really bad at what they do. Like, really bad. It’s hard to fathom a world where there are only two competing interests; one interest wants to use ideas that large majorities consistently find preferable in order to shape the future, and one interest literally has no vision for the future at all (not an exaggeration, this is the stated position); and the entity that stands for popular things fails over and over to convince people to choose these popular things. This is American politics summed up in one overly lengthy sentence, despite Rand Paul’s scandalous accusations.
But, this is the world we live in. Across the board Democratic positions are overwhelmingly popular, but they lose elections they should, by the numbers, win fairly easily. Even after taking into account that the election system is set up to help smaller states and to favor incumbents and to do all those things you’re probably thinking of as excuses right now. That’s not the point. Even in the system as it exists we see one election after another that a Democrat should win, but doesn’t. At the end of the day it’s simply because Republicans understand people, and Democrats don’t. But, I mean this in a very specific way.
Democrats behave as though they, by and large, assume people are rational. As an economist you’d think I’d agree, but I’m in the group that sees the world as it really is, rather than insisting the world must fit a theory. People aren’t rational. No matter how many preferences a person reveals there will never be enough data points to determine that a person always chooses the thing that is best for themself. Because they don’t.
Democrats imagine a world where every voter is a closet progressive, and they only need the Democratic party to pass the right version of some progressive utopia before they finally give in and stop supporting Republicans. If that were true we might expect the electoral college map to look something like this, because all these blue states get more money in federal assistance than they pay in federal taxes.
But in one election after another Democrats lose these voters who actually like Democratic policies. What it really comes down to is values.
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You might have read that and rolled your eyes thinking you’re about to get a lecture you’d expect from some Bible thumping old white guy in flannel. That’s not what I’m talking about—think more valuation and less family values.
There is this incredibly interesting human tendency that has been found not only by economists, but by political scientists and psychologists as well. Humans, in general, have a tendency to value losses more than they value equal gains. I don’t know why this is, and it makes no sense to my economist brain, but this is how people behave. If I take $10 away from you, evidence shows the value of that $10 loss is internalized by the average person as being larger than the value of the gain from being gifted $10. Someone might expect (me! I’m someone!) that people would value losing $10 the same as gaining $10 because $10 is $10. But for some reason people don’t. If I were a Democrat (I’m not) my sole goal would be to convince Democrats to stop governing and campaigning like $10 is the same thing as $10.
Because, if Democrats run on everybody gaining $10, and Republicans run on everyone losing $10, Republicans will win. They will persuade the marginal voter who isn’t a priori attached to one party that Republicans are the better option because of this general tendency among humans to value losses higher than gains. This is why something like “Make America Great Again” (notice, past tense) gets turned into a rallying cry, and “Build Back Better” (notice, future tense) gets turned into a reconciliation package nobody actually reads.
There are millions of people—heavily weighted in rural, white, and blue collar populations—who have some idea (true or not) of what the United States used to be. Some golden era of prosperity that has been lost. They have placed a value on that loss, and general human tendency predicts the valuation is larger than the actual loss itself; or at least higher than the value of an equal gain. This is why Republicans can offer literally nothing in terms of ideas, and still win against Democrats who offer a vision for a vibrant and prosperous future.
That future is valued less than what has been lost.
Inflation is the best hot button example of this. I’ve said before that the current trend of inflation is not a big, economy shattering issue. On average, everyone is actually better off now than they were before the pandemic. Companies are making higher profits, and people are making more money and buying more stuff. Prices being a bit higher has not stopped people increasing the amount of stuff they buy. In fact, much of the supply chain shortage is caused by the big increase in the amount of stuff people are buying. U.S. ports are processing almost 20 percent more stuff than they did before the pandemic—evidence that supply chain issues are more reflective of a hot economy than a struggling one.
So, if people are making more money, and are able to buy more stuff, they should value those gains, right? Wrong. People are internalizing the losses they are seeing from inflation. Even though they are able to buy more stuff, the fact that they have to spend more for it is seen as a loss, and the gains from actually buying more stuff, and from making more money are ignored or at least heavily undervalued. Again, this makes no sense to me, but this is how humans behave. Democrats are actually being punished for the performance of the economy, despite the economy performing better than anyone expected, and better than it has in decades.
This is because the perceived loss is internalized far greater than the actual gains.
Democrats don’t understand this, and they will keep losing elections because of it. What’s most concerning, there is a real chance The United States could lose a functioning democracy because Democrats don’t understand it.
Despite the huge economic growth, and the add-ons to that which will come from the infrastructure bill, voters aren’t enthused. This is because Democrats are expecting voters to be rational. Democrats believe that producing gains for people—real, tangible gains—is what voters are looking for. It’s why they are so focussed on the Build Back Better reconciliation package that Joe Manchin just blasted like it was a prince who married a woman of color and moved to Canada. But, quick! Tell me three things that are actually in the package? Most people can’t! This isn’t just a Democratic messaging problem; it’s a Democratic strategy problem.
While Republicans are running red hot with all the things they can frighten people into thinking they might lose because of the Woke Mafia, Democrats are stuck trying to tell people how much the Woke Mafia might give them. Look, I get it, the Woke Mafia is a caricaturist version of the Democratic party about as accurate as if every Republican were framed as the QAnon Shaman—but that’s the whole point. Republicans are leveraging the fear of what might be lost, and Democrats are allowing them to define the losses while they focus only on gains.
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The problem is this math doesn’t work. If a loss is valued at 3 times higher than an equal gain then in order for that equal gain to matter, voters have to be convinced it is worth 4 times more than the loss.
Side note: I’m just making these numbers up. In reality it’d be nearly impossible to put such a simple number on it because every person places different values on different things based on their personality and life experiences.
If people don’t even know what’s in the BBB package, how are Democrats gonna make that argument? This is always a losing strategy because an argument for a gain will always have to be X+1 times more convincing than the argument for a loss. In the example above an argument for a gain has to be 4 times more convincing than the argument for a loss.
It is probably possible to make a powerful and compelling argument that BBB is 4 times better than 4 more years of Trump, at least to the persuadable suburban voters, but most suburbanites don’t want to sit through an economics lecture in order to cast a vote.
If Democrats want to get buy in from voters, they need to frame policies in terms of losses. Imagine all the things the United States has lost that people want back in order to MAGA! So many of those losses are addressed in the hard and human infrastructure proposals from Democrats. Higher paying jobs from preferential treatment on union-made products can bring some of the blue collar middle class livelihood back to rural areas. Canada and Mexico are even upset at President Biden because he is giving US made products preferential treatment. Trump gave Mexican workers a raise when he “renegotiated” NAFTA. New infrastructure will cut down on vehicle maintenance, create high paying construction jobs, and help prevent future supply chain issues. High speed broadband access to rural areas will be a shot in the arm at least as powerful as when telephone lines were carried into rural areas. Fewer monopolies will lower prices, increase wages, and foster healthy economic competition. All of these things address losses have battered the MAGA base for decades.
If Democrats sold these bills in terms of recouping these losses, rather than potential gains, the evidence says they’d get more traction. That isn’t rational, but voters aren’t rational—and as long as Democrats think they are, they will struggle to win them over.
Republicans will keep hammering on cultural issues, because if suburban middle class voters think they are “losing their America”, or whatever, then it won’t matter if Democrats fork out a million dollar per person stimulus. When people have honest (even if unfounded) concerns that they will wake up in the Third Reich, a future gain will not be internalized as much as a perceived loss. Why else would critical race theory be so effective? Nobody outside of select law schools actually gets taught critical race theory. That’s not the point. The fear from the white working class of further losing status because their kids are taught they are inherently born as oppressors, or demons, or oompa loompas, or whatever other nonsense Christopher Rufo is fabricating is a real fear. Democrats ignore it because it’s not a legitimate fear, but people have real fears that are illegitimate all the time. Ever tried to convince an arachnophobe that the tiny spider in the corner isn’t dangerous? Trying to convince a panic stricken Trump voter that their kids aren’t actually being told everyone with white skin is the devil will be slightly more difficult than that. After all, there is no conservative media racket lying to arachnophobes, telling them that those tiny spiders have fangs 13x larger than their body and venom more deadly than a Taipan.
So if you want to try to fight critical race theory, might I suggest that telling an arachnophobe a spider isn’t dangerous might not be the best approach. Perhaps, try something like this:
America has fabulous chapters, I mean, it's the greatest country in the world. But we also have some important chapters in our history, we must teach them but what we won't do, what we won't do is teach our children to view everything through a lens of race. We won't do this. I mean, we know in our hearts it's wrong.
The only problem with Democrats taking this approach: they didn’t. That is a quote from Glenn Youngkin, while the Democrat in the race was too busy telling parents they shouldn’t have any say over what is taught in schools. How highly do you think that loss would be valued? We already know the answer: highly enough for Democrats to lose the Governorship and the House of Delegates in Virginia.
If you’re a hard lefty you’re probably shouting into your screen about how all of this not accurate—how I’m leaving out context and oversimplifying and misrepresenting. I know I am. That’s the point. Most people don’t enjoy foraging through the weeds on complex policy issues; they’d rather get home from work and chill with some football or Bachelor in Paradise than tune into hear some nerdy economist like me break down the nuances of policy. It’s why even Tucker Carlson, at 3.67 million viewers, is dwarfed by Monday Night Football’s 13.6 million. So, if Democrats lose another easily winnable election to a simple demagogue who inspires fear and sells losses, it will be because they continue to think voters are rational.
But $10 does not equal $10.
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