Last week, I argued that the core emotional barrier to Republicans being better on cost-of-living is their gut-level commitment to a “King of the Ashes” politics in which they pursue status and relational dominance even at the cost of economic rationality, efficiency, and affordability. It would be easy for Democrats to call that approach heinously stupid….. because it is heinously stupid. But Democrats have their own central hangup that prevents them from being better on the cost-of-living: their constant searching for Scrooge McDuck.
If you were a kid in the 90s, there was a cartoon that featured Scrooge McDuck, a character so wealthy that, as a child’s imagination would have it, he had a vault of coins that he’d go swimming in.
Too many Democrats, particularly in the more socialist wing of the party, really, really want the cause of any economic problem to be that there is some Scrooge McDuck who, if only they can be found and shaken down, could be forced to fund everything else. You don’t need growth or supply, you just need to find that guy and make him pay. It is emotionally attractive for many on the left, but it is ultimately counterproductive for Democrats being effective on the cost-of-living.
Why Scrooge McDuck is an Attractive Target
Focusing on finding a Scrooge McDuck for every economic problem is soothing for some people on the left for a number of reasons. First, it makes it easy to let interest groups off the hook when they get in the way of growth. After all, if the problem is that there’s some very rich person somewhere super-hoarding all the resources then growth isn’t especially necessary. That in turn means that when “community input” groups, lawsuit-wielding environmental organizations, labor unions demanding special handouts to let projects go forward, or straight up NIMBYs constrain supply, their contribution to the high cost-of-living can be downplayed. These groups are organized, vocal, and powerful within the Democratic Party. A “Searching for Scrooge McDuck” approach helps actors within the party studiously avoid fights with them.
Second, this approach also allows one to avoid difficult tradeoffs. Rather than accept that if you want more medical innovation, you need to protect pharmaceutical companies’ intellectual property, it is much easier to simply be mad at Big Pharma and their CEOs. It’s a lot easier to blame BlackRock than accept the need for more housing in your area. It’s a lot easier to blame fossil fuel companies than accept that it’s everyday consumers of energy that emit carbon.
A final reason why this approach is seductive is that Democrats often live in places like New York City and Los Angeles that do in fact have both some extremely rich people and some very poor people there. This makes it more plausible and more tempting to think that the problem is merely one of distribution.
The Real Problem is Scarcity and its Defenders
The first problem with the “Searching for Scrooge McDuck,” mentality is that it misidentifies the villain. Rich people are not all the same, and they certainly do not have class solidarity. The rich developer and the rich NIMBY are not teammates; they are on opposite sides. The rich NIMBY is the villain. The rich developer is one of the good guys.
People think about politics in moral terms, and that’s totally fine, but we need to correctly identify what the problems are and who is causing them. When you look out at the American economy, what you do not tend to see is libertarianism run amok but rather wave after wave of barriers designed to protect politically-favored incumbents at whatever cost to everyone else. Housing NIMBYs are the easiest example here, but hardly the only ones. Healthcare industry insiders who lobby for anti-competition policies like certificate-of-need laws do this too. A cardiothoracic surgeon on the other hand may be a rich person, but they are not one of the villains. Cronies who get the government to give them special protection through tariffs that give them a windfall even at the expense of consumers are another example of status-quo defending crony. Conversely, a different company that isn’t conniving to get the government to help them at consumers’ expense isn’t part of the problem.
A Thriving Economy is Built on Thriving Businesses
As importantly, the searching for Scrooge McDuck mentality fails to recognize that business is how supply and affordability get delivered. If you want more housing, that doesn’t come into existence by magic; private-sector capitalist developers build it. The electricity that powers your house doesn’t arrive there by happenstance. A business brought it to you. The heroes of the COVID pandemic, the people who brought it to an end were Pfizer and Moderna, two pharmaceutical companies. If we want a more abundant, more prosperous, more affordable society, we have to recognize that businesses are often the good guys.
And in fact, you can see the failures of doing the opposite when you look at which places are affordable and which aren’t. If searching for Scrooge McDuck really was a successful model, then places like Vermont that lean heavily into strangling growth while having high taxes would be broadly affordable. It isn’t. If this worked, California and New York City wouldn’t be astronomically expensive. They are. The places like Texas and Florida that don’t take this approach, that let businesses build, are the places that are more affordable. If you want affordability, you need to be enthusiastic about helping businesses succeed. There may be some on the left wing of the party who scoff at this but let me ask a rhetorical question: can you name a place that is economically thriving while the businesses are failing? Of course you can’t. For the economy to do well, business has to do well, and vice versa.
Finally, searching for Scrooge McDuck goes about pursuing a good value (egalitarianism), but does it in a bad way. It’s a ‘Tall Poppy Syndrome’ approach where anyone who seems to be getting too high gets cut down. It would be better to have a more hopeful, more ambitious “Trampoline Egalitarianism” where instead of pulling people down, we try to give everyone the tools they need to jump higher. A politics of “more good things for everyone” offers a much sounder foundation both in theory and in practice for the progressive goals of poverty-alleviation, upward mobility, growth, technological advancement, and affordability.
An Opening and a Task
The Trump administration has quickly made a hash of economic policy and the public has noticed. Trump’s approval on inflation has fallen from even in late January to -27 today. His tariffs are hammering small businesses. His attacks on the Fed are undermining one of the central institutional pillars of our economy.
Democrats have an opportunity before us to demonstrate that we’re the better party on this issue and that we’re not going to repeat the mistakes of the Biden administration —mistakes that very much emerged from a “Searching for Scrooge McDuck” orientation. We have an opportunity to fix that, to persuade moderate and independent voters that we are the party that is better for business and for the economy. On top of being good policy, this approach can help grow the Democratic tent.
Just as Abundance Republicans are going to need to convince their co-partisans that ‘King of the Ashes’ politics is mistaken, Abundance Democrats have to convince our co-partisans that developers and businesses more generally are often the good guys and that haranguing business should not be the party’s animating economic emotion. We’re going to have to stand up for markets, international trade, and property rights. We’re going to have to convince the party to politely ignore interest groups when they get in the way of growth and supply. I admit that these are tall tasks, but they are the only way that we are going to build a party that succeeds at being true champions of making life affordable for ordinary Americans.
-GW