American aversion to big government is a thing of the past

US Politics: Tolerance of fiscal intervention now appears to be more or less open-ended

The coronavirus pandemic has become a rout of national stereotypes. In France – seat of reason, advancer of germ theory – anti-vaxxers are legion. The avowedly liberal British submit to what by some accounts is a lockdown of near-unique harshness. Germany's vaccination rate defies what we "know" of its purring Audi of a state. Of all the surprises, though, it is the US thirst for government that is most confounding.

There are popular laws, beloved laws and President Joe Biden’s American Rescue Plan. For once, the whisker by which it passed the House of Representatives on Saturday does not mirror a split nation. That a cross-partisan supermajority of Americans agrees on any proposition at all is weird enough. But this proposition entails $1.9 trillion (€1.58 billion) of public spending, amid a growing economy, under a president of wrongly but widely impugned legitimacy, after two lavish Bills to the same end in 12 months. The debate over the wisdom of such largesse is everywhere except in the general public.

In their preferences, to be clear, Americans are hardly Danes. The reduction of inequality is well down their list of desires

It is not just fiscal relief in the abstract that polls well. The specific items do, too. This includes an imperilled minimum wage rise, now stripped from the Bill to get it through the Senate, that is as much about lasting economic reform as emergency aid. A "Trojan horse" for leftward change, some Republicans call the rescue plan. The allusion doesn't work if voters like the supposedly smuggled contents. Florida, that libertarian idyll, backed a $15 minimum wage in a November ballot.

Hardly Danes

The pandemic has crystallised a thought for which there was once only scattered evidence. But at some point in this century, the US became a mildly social democratic country, in its attitudes if not the reality of its welfare state. It is the knottiness of the country’s lawmaking – the counter-majoritarian Senate, above all – that stops the one translating to the other, not some deep folk aversion to “socialism” or the European way.

In their preferences, to be clear, Americans are hardly Danes. The reduction of inequality is well down their list of desires. Their tax tolerance is lower. But even as 40 per cent reliably vote Republican, they do not inhabit the party’s vision of an eternal frontier of rugged self-reliance. If the US was once ideologically exceptional within the rich world, it is now just different in degrees.

How the pandemic will change the US is guesswork that detains too many fine minds

For a sense of the change, consider the last time Washington backstopped the economy like this. The stimulus that followed the 2008 financial crash did not pass to quite such acclamation. In the same month, in fact, the Tea Party got going as a scourge of big government. Some of the difference in attitude since then is simple enough to account for. Even the sternest voter sees a pandemic as a case of all victims and no culprits. There are no over-extended homeowners in the Tampa suburbs to pin this one on.

But the tolerance of fiscal intervention now is not just greater than it was in 2008-2009. It appears to be more or less open-ended. While economists ask if the latest Bill goes too far, the question is how much more Biden could have stuffed into it without losing the public. Or how hard it will be to wean households, businesses and state governments off succour that has something close to unanimous assent.

Faded capitalism

The pandemic did not turn the US into a social democracy in its outlook. It was always there in the attitudes of millennials, far from mesmerised by capitalism and now probably the largest segment of the electorate. It was there in the arc of Obamacare: unpopular in 2010, but unpopular to tamper with before that decade was out. What the past year has done is reveal the accumulation of these and other trends over recent decades. The result is a US that looks far more like an average OECD member in its use of the state than the free-market outlier of lore.

Countries are entitled to a less than accurate self-image. "No myth, no nation", wrote Gore Vidal. But political parties have to be colder-eyed about the people they aspire to govern. For decades Republicans have got by on a picture of the US as somehow distinct in its economic individualism. Strip out the protectionist phases, the vast role the state had in business through the military, and it was even half-true once. It is now a pastiche.

How the pandemic will change the US is guesswork that detains too many fine minds. What it has revealed about the place as it is, is both easier to answer and no less striking. The myth of a government-shy nation has gone over the past year, and with it a kind of US exceptionalism. – Copyright The Financial Times Limited 2021