Dan Piller speculates on what the federal government might attempt if the 2020 presidential and Congressional elections swing toward Democrats. -promoted by Laura Belin
Democrats have learned, the hard way, to never count on a landslide before votes are cast. But the combination of a 1930s-style economic collapse, President Donald Trump’s manic blunderings, and his dismal poll numbers no doubt generate dreams in progressive minds of a landslide election in November that sweeps them into unchallengeable control of both the White House and congress in a manner similar to the Democratic sweeps of 1932 or 1964.
So what might happen if Joe Biden and a host of happy progressives settle into power in Washington next January (probably after walking past gun-toting, camouflage-wearing Trumpers making a Last Stand)?
Trump’s projected $4 trillion deficit this year precludes New Deal or Great Society-type spending that followed the elections of Franklin D. Roosevelt in 1932 and Lyndon Johnson in 1964. But Democrats could take advantage of control of the White House and big Congressional majorities to reshape the federal executive branch and rework the economy more to their liking, reversing the 40-year laissez faire march to deregulation, lower taxation, and corporate ascendency over government President Ronald Reagan began.
Here is a list of economic initiatives we might see if the Democratic fantasy is fulfilled.
Investigation of Trump’s financial misdeeds would be a priority for a Democratic-controlled Congress. A precedent would be the Pecora Commission, the investigation in 1933 and 1934 that delved into stock market and banking malfeasance and smoothed the path for New Deal financial reforms such as bank deposit insurance and the Securities and Exchange Commission.
As it absorbs the details of Trump’s self-dealings, Congress would likely react by closing the loophole in conflict of interest laws that allows a president to continue to own and operate a private business. While they’re at it, Congress may consider barring blood relatives from working in the White House. The Jared/Ivanka act will not look good in retrospect. Most publicly-traded corporations ban similar behavior. Congress might also ban nondisclosure agreements, which Trump tried to use to silence taxpayer-paid West Wing staff.
Wild card: Congressional efforts to rein in the White House could be a strengthening of inspectors general, a heretofore obscure part of the executive branch that emerged as an impediment to some of Trump’s grander malfeasances.
Few corporate maneuvers have enraged labor more than payout of dividends and stock buybacks all while workers are being laid off. Democrats can be expected to go after such investor favoritism. If congress can’t find a way to limit executive compensation and bonuses, it may settle for a new version of the 2002 Sarbanes-Oxley law that put controls on CEOs, accountants, and directors, and forced more corporate disclosure.
Democrats might even reinstate the Depression-era Glass Steagall-Act, which separated investment and commercial banking in the 1930s and then was repealed by the Clinton administration. The Bernie Sanders wing of the Democrats still holds a grudge against both Clintons for that one. A carve-up of the huge banks could be a backdoor way to attack the “too big to fail” issue.
Wild card: Congress may look under the hood of computerized trading, based on algorithms far beyond the resources of individual investors, which can cause dramatic and unexpected swings in markets and which some critics say are a form of insider trading.
Congress will likely want to take back the power to make trade agreements and set tariffs, which it held from the beginning of the republic in 1789 until it began yielding the authority to the White House during the 1970s. The “Tariff Man’s” punitive tariffs against all corners of the earth benefitted Trump politically but appeared to provide scant economic benefit.
Wild card: instead of taking back all trade power and its resulting political pressures for itself, congress might remove trade from politics by creating a Federal Reserve-like independent board and executive nominated by the president, serving fixed terms and answerable to congress, to oversee trade and begin to restore confidence in the U.S. by the world’s trading community.
The coronavirus pandemic overwhelmed the earlier health care debate within the Democratic Party, over Medicare for All vs. a public option for health insurance. By this time next year the bills for hospital care and health insurance for an ever-expanding cohort of COVID-19 victims will start coming due. Congress may need a net wider than just tinkering with Medicare (whose trust fund, by the way, is likely to be exhausted before the decade is out).
The forced, pathetic groveling of Drs. Anthony Fauci and Deborah Birx before Trump may prompt Congress to remove the major federal agencies overseeing public health such as the Centers for Disease Control, the Food and Drug Administration, and the National Institute of Health, from White House control into an agency with more political independence.
Wild card: As Congress investigates the COVID-19 disaster, an elephant in the room will emerge: the poor underlying health of Americans added considerably to the scope and cost of the calamity. Alone among industrialized nations, Americans are seeing their life expectancies decline. The issue is complicated and emotional, centered on conditions for disadvantaged and underserved communities, and the reality that 40 percent of Americans are obese and don’t like hearing about it. But the cost of poor health is mounting. Fast and processed food companies, manufacturers of sugary drinks, and even pork and beef producers may find themselves under scrutiny.
Somebody has to start paying for the huge deficits and additions to the national debt run up in response to coronavirus, and corporations and high incomes will be unwillingly nominated. The big stock market losses (with perhaps more to come) make this action more politically palatable.
Farmers will lose their big bet on Trump if he goes down in November. Barring a large and unexpected turnaround in grain and livestock markets, agriculture faces a long-term depression that would require more government aid if farming is to remain in a semblance of its current form.
Democrats eager to tell the red hat-wearing farmers to get lost will likely be overruled by shrewder operators in Congress who will make farmers hostages to the Green New Deal. Farmers can expect an unwelcome (to them) host of clean water, air quality, and animal welfare regulations in return for government aid.
On the labor side, immigration advocates will likely seek more protection for immigrant workers, particularly after COVID-19 laid bare their crucial – and dangerous – role in meat production.
Wild card: Democrats tend to be more favorable to the smaller, organic farms that feed to the “buy fresh, buy local” farmer’s market movement and may want to refashion farm subsidy programs in that direction. A new emphasis on healthier foods might also shift subsidies from the industrialized grain and meat production more toward the fruit and vegetable operations (located strategically in electoral vote-rich states of California, Texas and Florida). The fruit and veggie growers traditionally haven’t wanted subsidies, being not eager for government inspectors to snoop around their migrant labor practices. But the hit to the restaurant industry by coronavirus will cause a round of bankruptcies, which will make the fresh food people more eager for government help.
If Democrats want to ban fracking, this would be the time to do it, because low oil prices make exploration and drilling virtually impossible anyway. The coal industry will be put on the Do Not Resuscitate list.
Wild-card: An infrastructure initiative could be a major upgrade of the electric transmission system, which would be a backdoor way for Democrats to throw an indirect subsidy to their business supporters and also put a labor to work.
A victory in November may allow Democrats to overcome their grudge against Facebook and other social media for their supposed role in the 2016 defeat at the hands of Trump. But political juice may be left to try to move against social media and its role in purveying falsehoods and hate speech, as well as privacy violations. The expected ugliness of the campaign this fall is likely to make most Americans think they need a shower and put them in the mood for changes.
The post-Trump era may feel like V-J Day to embattled traditional media, but it will come as the expected collapse of advertising puts the newspaper industry into its final death throes. As big, famous newspapers close and their remaining employees are put out of work, emotional pressure will build for some kind of aid to save what is still the prime source of local news. The First Amendment could serve as an unlikely bar to any direct aid by Congress, but the important role of newspapers in the democratic process is likely to keep the issue in play.
Wild card: Since Fox News owes its existence to the repeal of the Fairness Doctrine in the late 1980s, some creative Democrats might try to fashion a new fairness law that would defang right-leaning media.
Dan Piller was a business reporter for more than four decades, working for the Des Moines Register and the Fort Worth Star-Telegram. He covered the oil and gas industry while in Texas and was the Register’s agriculture reporter before his retirement in 2013. He lives in Urbandale.
Top image, from left: Ferdinand Pecora, chief counsel to the U.S. Senate Committee on Banking and Currency during the 1930s, available via Wikimedia Commons; President Franklin Delano Roosevelt in 1933, via Wikimedia Commons; President Lyndon B. Johnson, cropped from official portrait available via Wikimedia Commons.