How Biden's COVID Relief Helped Ron DeSantis

Republican governors have gotten a holiday from budgetary reality.

Before we start: The big news this morning is that we have a speaker of the House. Congratulations to Kevin McCarthy! No matter what happens from here on in, he’ll get the bust and the official portrait and his name etched in history. No one can take that away from him. And all he had to do was humiliate himself, betray his principles, and agree to a bunch of dictated terms which are unlikely to be good for the country.

For a guy like My Kevin, that probably seems like a bargain.

If you were reading this newsletter, you would not have been surprised. I was arguing all week that McCarthy’s hand was stronger than it looked and that the incentives were aligned that everyone—with the possible exception of Elise Stefanik—achieved their primary objectives by having McCarthy win.

Also: Having a speaker has not solved anything. The fight this week wasn’t a discrete event. It was a template for how the Republican House conference will approach every important vote over the next two years. Which means two things:

1. No important legislating will accomplished over the next 24 months.

2. A few important routine legislative events will become cataclysmic showdowns.

In particular: Raising the debt ceiling; passing a budget; getting aid to Ukraine.

All three of those will be conflagrations in which the economic health of the American economy will be put at risk.

But don’t worry, America. Kevin McCarthy got his gavel. Chip Roy got his leg up to succeed Ted in the Senate. And Matt Gaetz completed his audition for Newsmax. Those guys walk away from this week with exactly what they wanted.

So let’s move on and enjoy the interregnum before the next crisis.

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(Photo by GIORGIO VIERA/AFP via Getty Images)

There is a belief among certain liberal rationalists that, at the end of the day, politics is always about policy.

I don’t think that’s true.

In fact, I’m not sure that it was ever true in post-TV America. But even if it was true once, it’s less true now.

Politics is sometimes about policy. Policy positions—against immigration, for healthcare reform—can sometimes influence political outcomes. My view is that most of the time, politics is about more inchoate stuff: identity, signaling, macro conditions.

Maybe the best way of putting it is that a policy matrix can be a necessary, but not sufficient, contributor to any given political outcome. You can have super popular policies that can’t help a bad messenger or don’t work in a bad environment.

Also, you can have super unpopular policies that sink a good messenger, even in a good environment.

But in vivo, most of the time the candidates’ policy matrixes are a wash and the smokey stuff is determinative.

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That’s all a wind-up to this piece by Matt Yglesias in his Slow Boring newsletter, which has a more deterministic view on policy than I’m comfortable with, but is also quite insightful. Here he is arguing that Chris Rufo’s genius insight was to find ways to fight the culture war through policy initiatives:

[T]hat is the real significance of Rufo’s work. Were these diversity trainings an important issue? No. But they are indisputably within the purview of the executive branch of the federal government. Trump wasn’t just tweeting a complaint about cancel culture; he actually made policies to wage a battle against progressive cultural ideas. And this concept is now dominating Republican Party politics. A lot of conservatives might still have some qualms about telling a purely private company what it can say in internal diversity presentations, but wherever the hand of the state is already present — in government workforce trainings, in libraries, in K-12 schools, even in university faculties — Republicans are now looking to clamp down on progressive wrongthink.

Rufo himself, meanwhile, clearly feels that this should be pushed into arenas like private companies and private schools.

Indeed, while I know plenty of progressives believe the conservative attacks on woke schooling are just a mask for the “real agenda” of vouchers and privatization, I think the logic of this campaign militates in the other direction.

Again: I think this overstates the appeal of Rufo’s work. What Republicans have found a way to do is to basically expand “War on Christmas” culture war emoting into bullet points for them to talk about on the campaign trail. But the important part here isn’t the policies—its the identity-politics signal. It hardly matters if a Republican pol can execute one of these policy proposals—or even if they’re constitutional! All that matters is that the Republican is signaling to his audience which side he’s on.

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But Yglesias’s most insightful point is that Republicans can do this performative culture war policy stuff only because Joe Biden’s COVID relief spending gave them a holiday from economic reality:

My main thought about all this is that the Rufo Style of politics represents a vacation from budgetary realities.

Political conflict and voting behavior may be increasingly post-material, but a separate issue is that things normally need to be paid for. But not always! Right now, Ron DeSantis is bragging about how Florida is increasing teacher pay for the third year in a row. That’s something he can do because of federal Covid-19 relief spending provisions that Republicans opposed but which have pumped GOP-run state governments full of more money than they know what to do with. Now they can keep taxes low, keep spending on popular public services, and wage culture wars all at the same time.

Oh yes. Which brings Yglesias to the capper: Once this holiday ends, if Republicans are in power, their economic program could turn out to be not what the median voter is expecting:

If Republicans sweep into office with a large Senate majority — and especially if high inflation is putting fiscal austerity on the table in a real way — I think people are going to find themselves taken aback by how right-wing the GOP agenda fundamentally is. A lot of attention has been paid to Senator Rick Scott’s apparent call to raise taxes on poor people in his NRSC policy blueprint. But I think the broad fiscal themes are more significant. He repeatedly endorses a cuts-only approach to balancing the budget, including ideas like “any government function that can be handled locally should be,” implying a massive effort to offload federal fiscal responsibility for things like schools and policing.

But you can’t balance the budget with that kind of thing; if revenue is off the table and military spending is off the table, then significant debt reduction requires going after Social Security and health care programs. Trump’s partial concession to political reality on these points was bolstered by a macroeconomic situation in which the deficit just didn’t matter much. But you don’t see the turn taken by European conservative parties where they are generally willing to pay the tab for the existing welfare state, even though our welfare state is much smaller and has a commensurately smaller tab. And of course, though conservatives’ desire to ban abortion is anything but new, up until this week the Roe v. Wade precedent has essentially forced them to focus on politically popular abortion restrictions. Now the gloves are going to come off and their base’s demand for unpopular total bans is going to come to the fore at the exact same time the logic of their tax and budget commitments will lead them to try to yank millions of people’s health care away.

Read the whole thing.

One of the asymmetries in American politics is that we have one party which is deeply invested in policy and another which is deeply invested in performance. And an electorate which is split fairly evenly along the same lines.

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The Bulwark is heading west! Join us in Hollywood on Thursday, January 19th with special guest Jon Favreau - President Obama’s chief speechwriter and host of the Pod Save America podcast.

Can’t join us in LA? We’ll be in Seattle on January 21st at Town Hall Seattle with special guest Dan Savage.

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2. Ted Gioia

Substack has gone prestige with Ted Gioia,¹ who has a fantastic piece about the resurgence of Barnes & Nobel:

After a long decline, the company is profitable and growing again—and last week announced plans to open 30 new stores. In some instances, they are taking over locations where Amazon tried (and failed) to operate bookstores. . . .

Even after its leading bricks-and-mortar competitor Borders shut down in 2011, B&N still couldn’t find a winning strategy. By 2018 the company was in total collapse. Barnes & Noble lost $18 million that year, and fired 1,800 full time employees—in essence shifting almost all store operations to part time staff. Around that same time, the company fired its CEO due to sexual harassment claims.

Every indicator was miserable. Same-store sales were down. Online sales were down. The share price was down more than 80%.

And here’s what happened to its big digital initiative, the Nook eBook reader—a decline of more than 90%. . . .

I now have a rule of thumb: “There is no substitute for good decisions at the top—and no remedy for stupid ones.”

It’s really that simple. When the CEO makes foolish blunders, all the wisdom and hard work of everyone else in the company is insufficient to compensate. You only fix these problems by starting at the top.

In the case of Barnes & Noble, the new boss was named James Daunt. And he had already turned around Waterstones, a struggling book retailing chain in Britain.

Back when he was 26, Daunt had started out running a single bookstore in London—and it was a beautiful store. He had to borrow the money to do it, but he wanted a store that was a showplace for books. And he succeeded despite breaking all the rules.

For a start, he refused to discount his books, despite intense price competition in the market. If you asked him why, he had a simple answer: “I don’t think books are overpriced.”

Read the whole thing and subscribe. It’s great. And

Ted Gioia

is great.

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3. The Ankler

The Ankler is the best publication in America about the entertainment industry. Absolutely indispensable if you care about the popular culture. Just before New Year’s, Ankler founder Richard Rushfield did a searingly candid interview with an anonymous producer that tells you everything you need to know about there the business is right now:

What was so bad about the year?

Well, many things. I think one of the major problems with 2022 was this capitulation to streaming as if it was the holy land and going to save everybody. And all it's done is put more debt on every company, squash the middle of filmmaking, which is where all the good shit gets made, and killed people's back-ends and livelihoods. . . .

Do you worry about making new stars and where the stars are going to come from?

I don't worry about it. I think streaming's killed every star except for Leonardo DiCaprio and Denzel Washington.

How have they killed them?

They made them little. Norma Desmond was right. . . .

What quality would someone need to become a producer today? 

Well, it'd be good if you were related to the guy who runs Netflix or Hulu.

What if you just arrive in town with your futon in the back of your car?

If you were 20 years old now and you were showing up to make movies in Hollywood, fuck, I mean, I guess part of it would just be, go figure out how to have a relationship with Dwayne Johnson or Ryan Reynolds or Chris Hemsworth. They're just manna from heaven for streamers.

Read the whole thing and subscribe.

Also: One of the big stories in America coming down the pike is that we’re likely to have a Hollywood writers strike this year and when it hits, this already disrupted industry might go into a nuclear winter.

To read more about it, check out the Ankler’s candid interview with an anonymous screenwriter.

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1. Imagine having Ted’s career and still be regarded as the slacker Gioia brother.