This essay is part of an Election Chronicle series in our Winter 2025 issue, Trump’s Return. Subscribe to get a copy.
The year 2014 was a heady moment in the economic policy world. That spring, French economist Thomas Piketty’s Capital in the Twenty-First Century was published in English to astounding commercial and intellectual success. The book painted a devastating picture of the post–Cold War economic order, uniting groundbreaking empirical evidence with a comprehensive theory explaining the vast accumulation of wealth and power at the top of the global economic pyramid. And it appeared at a moment when the apparatus of the Democratic Party needed just such a shock.
Recovery from the 2008 financial crisis, itself a consequence of Clinton-era financial deregulation, had been too long and too weak in the making; inequality ratcheted ever upward and jobs continued disappearing overseas. These trends signaled that the policies, rhetoric, and personnel of the Obama administration simply weren’t up to the task. Piketty’s reception, though not without pushback, helped cement consensus that something had to be done, kicking off a spirited effort within the progressive policy world to reform the Democrats’ approach to the economy.
Now that Trump has dealt a decisive deathblow to the post-Obama political system, it’s worth taking stock of where that moment went. Postmortems on Bidenomics have tended to focus on climate provisions, rising protectionism in trade, and the macroeconomics of stimulus and inflation. The limits of the administration’s “industrial policy,” touted as marking a “post-neoliberal” paradigm shift, have been extensively documented; it was always a national security program first—an ill-conceived reaction to fears of a rising China—and a pro-worker agenda second, if at all. The bigger, less talked-about picture is the long arc of ten years of failure to confront inequality after the Piketty moment in 2014. Across four key policy areas—taxation, labor standards, the welfare state, and antitrust—Democrats could have pursued a comprehensive program for combating plutocracy and empowering workers. But the opportunity was frittered away through a relentless focus on playing by the old rules of policy debate and routing reform through the usual elite channels, insulated from—and often outright hostile to—the voices and views of on-the-ground constituencies. All that came at the cost of forging a durable political coalition.
The result is that Trump is now festooning his second administration with the wealthiest people in world history. Getting out of this mess requires clarity about what happened over the last decade that led to this dire situation: exactly how Piketty’s clarion message was absorbed into, and then quietly killed by, a political system that sorely needed to take it to heart to have any hope of defending itself.
Progressive taxation is the single most important policy lever for reducing the power of the rich—not because it raises revenue that can be redistributed via public programs or directly to the poor, but because it imposes a de facto statutory maximum on income or wealth, eliminating the incentive to hoard the economy’s resources. Unrestrained capital accumulation is the main reason for economic stagnation and the hollowing out of productive capacity. Conversely, as Piketty’s research shows, economic growth is both faster and more equitably distributed—meaning pre-tax top income shares are low—in jurisdictions where effective tax rates at the top are highest. When elites face limits on how much they can take home, they use their dominant position to grab less, so there’s more for everyone else.
Treating progressive taxation as a political rather than a fiscal phenomenon has two key advantages. First, it avoids playing into the hands of austerity politics, as Democratic talk about taxes always has. The point is not for the government to “raise money” to pay for programs or balance the federal budget; in fact, since the aim is to destroy the tax base north of the threshold for the top bracket, the less money steep progressive taxation raises, the more effective the policy. And second, talking this way focuses attention on class war: the reason you’re poor is that they’re rich. The political logic is self-sustaining. Straight talk about combating plutocracy grows broad-based working-class support, which makes it possible to sustain serious progressive taxation over time, which in turn wins more people to the constituency. Bernie Sanders’s attacks on “millionaires and billionaires,” AOC’s onetime slogan that “every billionaire is a policy failure”: their movement-building success with that message, even in the face of mainstream Democrats’ hostility toward it, speaks for itself. So does Claudia Sheinbaum’s recent victory in Mexico, which rode on the motto, “For the good of all, the poor first.”
All of this was more or less the explicit message of Capital in the Twenty-First Century, especially as it pertained to progressive taxation. But that message could not break through the hard shell of Democratic common sense about fiscal policy, which is structured around two entrenched strands: a right-wing strand that prioritizes fiscal rectitude, and a liberal strand that views taxes, particularly progressive taxes, primarily as a way to answer the perennial objection “How are you going to pay for it?”
When Senate Democrats were strategizing how to oppose the Tax Cuts and Jobs Act during Trump’s first term, for example, they decided that highlighting its fiscal irresponsibility, through citations of Congressional Budget Office scores, was the only way to peel off Republican votes or mount an opposition campaign. A senator told me exactly that when I briefed the Senate Democratic Caucus on how to message on progressive tax policy. But the fight on the floor of Congress is not the only fight that matters. Although Democrats all voted against the bill, they succeeded in peeling away only one Republican vote; the legislation passed anyway. In other words, Democrats not only failed to block the bill using this approach; they failed to use the moment to break from the old technocratic rules of policy discussion, politicize the way we assess tax policy, and build popular consensus and pressure outside of Washington.
There are reasons Democrats find it hard to embrace this talk, of course. One is that the party itself has plenty of plutocrats in its ranks. Another, less well appreciated, is that Democratic Party–aligned policy experts and advisors strenuously seek to preserve their credibility in backroom political convenings, which are primarily composed of well-credentialed people affiliated with both parties—and not, that is, with voices from or accountable to popular constituencies, who speak the passionate language of anti-plutocracy. Adding a giant dose of class war to tax policy certainly would have upset that tradition, but there was nothing but political will standing in the way of Democratic leaders insisting it be done, whatever the consequences for the professional prestige of their most senior staffers.
Insofar as the progressive tax policy championed by Piketty had any presence in the Biden administration, it was on two fronts: enhancing the enforcement budget of the Internal Revenue Service and enacting an international minimum corporate profit tax rate. But both of these efforts fell far short of the bold vision Piketty elaborated. The first even reflected Larry Summers’s critique of Piketty: Why should we raise marginal tax rates on the rich to 90 percent, he complained, when we’re not fully enforcing liability at 40 percent? And the second got mired in the intractable morass of international negotiations; it was eventually enacted abroad but not in the United States due to a total blockade in Congress.
When it comes to labor standards, Biden has been feted as the most pro-labor president since FDR—at least by political commentators and union leaders, if not by the rank and file. His appointments to the National Labor Relations Board (NLRB) were an improvement over the status quo, though they have now been undone by Trump. But when it comes to moving legislation that would outlast appointees, the Biden administration was no different from its Democratic predecessors.
In 2021, the Protecting the Right to Organize (PRO) Act was introduced by Democratic labor committee leaders in both houses of Congress, representing the agreed-upon asks of the labor movement’s legislative affairs advisors: heightened penalties for unfair labor practices, a ban on captive audience meetings, weakening state-level “Right to Work” laws, and most controversially, an expansive definition of employment for the purposes of collective bargaining rights—the “ABC Test.” The bill passed the House but was killed in the Senate by wayward centrist Democrats Kyrsten Sinema, Mark Kelly, and Mark Warner, who played the roles of corporate-backed spoilers to the brief trifecta of Biden’s first Congress (as other Sun Belt Democrats had done for the previous two Democratic trifectas). Following that defeat, the administration’s only subsequent progress took the form of regulatory changes through the NLRB, Department of Labor, and Federal Trade Commission that were mostly struck down by a right-wing judiciary.
The most novel, and also most revealing, aspect of labor regulation today concerns the gig economy, debate over which began during the Obama administration—a time when leading labor-affiliated researchers were downplaying its significance instead of engaging its substance. Heading into the Biden administration, there were two poles to the debate: either gig workers are employees (as the PRO Act says) and settling for anything less constitutes a sellout, or (non-)employment status should be conceded in exchange for “sectoral bargaining” and a new system of “portable benefits.” The latter would effectively create a permanent two-tier system that would invite incumbent employers to replace existing workers and their unions with a lower tier of not-quite-employees rather than genuinely independent contractors, the whole thing sanctified by a paper union empowered to collect dues in exchange for the pretense of processing grievances gig employers are under no obligation to redress. Notably, both of these options end in some form of unionization.
But on both sides of this debate, actual gig workers—many of whom choose such work because they are drawn to its promise of independence and liberation from bosses—were sorely underrepresented. The pitch to workers typically made by union representatives—employment status lets you form a union, which can then negotiate a contract that gives you the protections you want, including independence—is easy for companies to organize against, not only because an independent union, let alone a contract, seems remote, but also because employers can paint union organizers as threats to worker independence. Meanwhile, the unions that play ball on the companies’ terms win the prize of collecting dues in exchange for endowing the whole charade with a pro-worker gloss.
It is true that some people turn to gig work only as a last resort or in desperate conditions, when they lose access to traditional employment—as was the case when Uber got its start during the darkest days of the Great Recession. But a large number of gig workers want the ability to make a living outside an employer’s supervision. That constituency would be served by a threefold agenda. First, extending the actually existing social insurance system—whose benefits are already “portable”—so that it covers them. (To be fair, some state-level enforcers have achieved this with respect to unemployment insurance during the last several years.) Second, enacting a health care entitlement that isn’t tied to employment status. And third, restricting companies’ ability to control the conduct of their work at a distance. But professional labor advocates are generally averse to strategies that don’t culminate in unionization. So long as Democratic coalitional politics designates established unions as the exclusive spokespeople for workers and isn’t pushed by bottom-up mobilization to represent or be accountable to new constituencies—including, most especially, unorganized and gig workers—that view will continue to prevail.
And indeed, it has led to several high-profile settlements in recent years that surrendered employment status only to set up company unions rather than confront and dismantle exploitative business models that prey on workers’ desire for independence and control on the job. Running through all this was Democrats’ usual tendency to see or claim a popular consensus where there actually isn’t any, just because a policy mix happens to be agreed to by everyone in the room. In this case, liberal philanthropies argued that a political base for an apparently pro-worker agenda could be secured by funding GOP-aligned “policy entrepreneurs” such as Oren Cass, who touted these labor compromises as part of a working-class conservatism. The trouble was that actually existing worker constituencies simply had no seat at the table. They were treated at best as a problem to be managed.
As for welfare, reform efforts at first had something working in their favor: the pandemic. In the midst of this structural crisis, the Biden administration did inherit a temporary expansion of the welfare state considerably more ambitious and comprehensive than anything proposed within progressive think tank circles during Trump’s first term.
Before COVID-19, the prevailing anti-poverty agenda centered on the earned income tax credit and the child tax credit. These programs are popular among policy analysts for two reasons: they are tax expenditures, so there is no budget line and hence no “handout” vulnerable as a political football in appropriations fights, and they are only available to people with labor income, which effectively hands over discretion (and with it, a cut of the proceeds) to employers of low-wage workers.
The push for universal basic income (UBI) that cropped up in the 2010s had challenged this paradigm—backed by Silicon Valley types claiming that the next technological innovation would lead to job losses for vast swaths of the working class, as well as by progressive policy reformers who saw it as a justified analog to the excessive capital income “earned” by the rich and documented in such detail by Piketty: a trust fund for the rest of us. Yet the established organizations, especially the Center on Budget and Policy Priorities, heavily resisted abandoning the ground they had learned to defend: that existing programs are effective (so why would we need new ones like UBI?) and that recipients of anti-poverty aid are deserving because they are workers. In the wake of this pushback, UBI advocates such as the Economic Security Project shifted the definition of their goal to include tax credit programs, recipiency of which is far from unconditional and therefore far from universal.
Then came the pandemic, which suddenly made it impossible to blame welfare recipients for not being employed. The CARES Act, passed in March 2020, included gig workers in the New Deal social insurance system (though without their employers having to pay premiums, an enormous windfall to the sector that sailed through Congress with essentially zero debate). Meanwhile, first under Trump and then under Biden, the federal government disbursed cash payments outside the logic of deservingness, to the tune of $4,000 a household or more.
Both sets of measures effectively severed the longstanding link between formal employment and eligibility for welfare. But this important ideological breakthrough didn’t last, because once again no institutional infrastructure or popular consensus was built to preserve it. Quite the opposite: when employers began demanding a return to work in early 2021, they blamed pandemic welfare benefits for keeping workers at home—a bid to distract from their own shortsighted decision to lay off “non-essential” workers, dissolving employment relationships that take time and effort to re-form—to great effect. Congress and the Biden administration caved to that message.
While pandemic restrictions were broadly unpopular with the public—as was the inflation that resulted when the economy’s productive capacity was suddenly unable to meet demand following all those layoffs—the pandemic welfare state emphatically was not. Nonetheless, when the Biden administration declared the pandemic over following the vaccine rollout, progressive organizations went along, and welfare policy reverted to the pre-pandemic status quo: conditional on the boss’s goodwill. A great deal of laudatory ink has been spilled on Biden’s economic advisors having learned Obama’s lesson: too small a stimulus after the 2008 financial crisis caused political problems down the road. This time, the Democrats deliberately went bigger with stimulus. But then they reverted to business as usual, and this crisis was wasted too.
The policies that disappeared most quickly—cash payments and supplemental unemployment insurance—were precisely those missing from, indeed excluded by, the mainstream policy discussion heading into the Biden administration. Democrats could have conditioned their repeal on passing a permanent expansion of the favored policy—the child tax credit—but mustered no such leverage. The result alienated workers who experienced the height of the pandemic under Trump as a rare financial windfall and time of decreased economic stress. For them, Biden’s push for Americans to “get back to work” brought back all the old problems, plus the new one of inflation.
Then there is antitrust, the policy area where the Biden administration had the greatest success. While there have been major enforcement wins—an across-the-board victory for the government in its case against Google’s search monopoly; blocking some high-profile mergers on the basis that they would have harmed workers—the most significant achievement is that the reform impetus wasn’t snuffed out. Despite Trump’s reelection, it will almost certainly persist in academia, dedicated nonprofits, and non-federal public enforcers—not to mention among the public, which remains convinced that extractive monopolies dominate the economy and were responsible for recent inflation.
The key to this success was a willingness to depart from the old reform playbook and to take the establishment by surprise. As with tax policy, antitrust had been confined for decades to a highly arcane and technical domain—one in which dedicated practitioners were used to getting their way within very narrow boundaries of acceptable policy variation. Carl Shapiro, who served as chief economist in the Antitrust Division of Obama’s Department of Justice, crystallized this attitude when he said in 2018 that the division hadn’t brought a monopolization case on his watch because “there were precious few cases that warranted an enforcement action based on the facts and the case law.”
But the tide turned suddenly with the advent of antitrust as a progressive priority starting in 2016, buoyed by the growing sense that major tech players did not have the public’s interest at heart, as well as some insiders’ search for policy levers that could be pulled through unilateral executive action. Four years later, a House Judiciary subcommittee released a report on Big Tech, laying out in great detail the actual business models of leading companies and exposing their reliance on anti-competitive practices to obtain and maintain their position. Soon thereafter Biden appointed Lina Khan, who helped lead the House investigation, and Jonathan Kanter, who had sued Google in private practice, to helm the lead enforcement agencies—the FTC and the DOJ’s Antitrust Division, respectively. Unlike in tax policy, where the culture of bipartisan consensus effectively blocked reform, the pre-2016 culture of antitrust consensus worked against the establishment in this case, since it enabled these upstart reformers to tar everyone—Democratic and Republican staffers and academics alike—with the same compromised brush.
Yet even here, the reform effort has relied to some extent on an old pattern: marshaling credentialed experts—law professors and economists with the fanciest pedigrees and publication records—to sanctify the policy. Mobilizing a popular constituency is messy and hard; mobilizing elites was much easier, not least because proposals to this effect were likelier to win support from the progressive philanthropies leading the “post-neoliberal” charge. To this extent, the antitrust agenda too has been in keeping with the Democratic Party’s elite, top-down approach to economic policy and politics in general. Its wins have not come without the cost of perpetuating a risky political strategy.
A good example is the FTC’s rule banning noncompete clauses in employment. Evan Starr, the leading economist studying noncompetes, published a paper through the Economic Innovation Group after the ban was announced in 2023 exhaustively demonstrating its consistency with a recognized, well-published body of research as well as the speciousness of the economic arguments against it put forward by the Chamber of Commerce. Starr’s paper is exactly the kind of thing a raft of progressive policy nonprofits are meant to produce. Nonetheless, conservative federal judges blocked the rule—one dismissing Starr’s work as only “a handful of studies.” The problem is that it’s very easy to muddy up a scholarly consensus with motivated studies, and it’s nearly impossible to convince a judge (or a congressperson) who doesn’t want to be convinced that some studies are robust while others are hackwork.
Resting so much of the political burden on the power of authoritative research to structure top-down policy and persuade elites, even when the research should in fact persuade them, forgoes the option of mobilizing a popular constituency and following it where it leads, while vesting considerable veto power in experts empowered to speak authoritatively about the policy implications of their work. Tens of thousands of ordinary workers flooded the FTC with comments supporting the policy too, but the tide of public opinion made no impression on a lifetime-ensconced judiciary, all of whom are appointed thanks to their gestation in the same well-oiled right-wing political machine. Bottom-up mobilization in favor of the noncompete ban (or any other worker-friendly policy) would have meant answering the contrary judicial rulings by a call to overthrow judicial power and remove offending judges from office, but the Biden administration never even gestured in that direction or blamed the conservative judiciary for the pandemic inflation because it saw its mission as preserving faith in “our system of government,” even as that system was destroying his administration.
It is thus hard to see the last decade and a half as anything other than a missed, indeed wasted opportunity. The Great Recession sparked a major movement for progressive economic policy reform, and it was sustained in large part by major philanthropic gifts to progressive advocacy groups and think tanks. Asking why this agenda has come to naught is an important and necessary conversation to be having, but it is not well served by the aggressive, premature self-congratulation of the Biden administration and its allies over the last two years.
The loudest critique of the Democratic Party to have emerged in the wake of Trump’s reelection is that it has become too beholden to shadow constituencies without any real popular following. There is a half-truth in this argument. The real story is that the most influential progressive philanthropic efforts on economic reform largely confined themselves to doing prestige politics as usual; when they did win a seat at the table, there was no popular base to answer to and no serious effort to build one. Instead, the “theory of change” was that intellectuals and insiders could take care of the policy and the politics would take care of itself. The result was a catastrophe out of which almost nothing lasting was achieved.
The irony is that philanthropy, in principle, should free up advocacy organizations to depart from the old rules and preexisting orthodoxy, empowering progressives to recognize which constituencies are not currently represented and activate them. And indeed, other progressive foundations have been doing just that. If reform-minded progressive philanthropy has any future, it must follow their lead, helping to grow popular movements and working in collaboration with them, rather than continue to operate solely from the inside out and the top down.
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