As they face the midterm elections with the wind in their faces, Democrats increasingly stake their collective political future on the issue of inequality. The topic has great resonance, given the economy’s vast preponderance of benefits to the very rich and the almost obsessive focus on the issue by the mainstream media.
But if raising the class-warfare flag gives Democrats at least hope for avoiding a 2010-style shellacking, it also threatens to open up huge, and potentially irreconcilable, differences within the party. Unlike with social issues, where the party is relatively united, class divides threaten party unity by pitting its different constituencies against each other.
Today we can speak really of three Democratic parties, each with a separate class interest. Their divisions are as deep, perhaps more so, as that between the mainstream Republican Party and the Tea Party. As the Republicans are divided between Main Street grass-roots activists and the corporate “moderate” wing, the Democrats face potential schisms over a whole series of policies, from policing Wall Street to the environment, monetary policy and energy.
The Gentry Liberals
This group currently dominates the party, and have the least reason to object to the current administration’s performance. All in all, the gentry have generally done well in the recovery, benefiting from generally higher stock and real estate prices. They tend to reside in the affluent parts of coastal metropolitan areas, where Democrats now dominate.
The liberal gentry have been prime beneficiaries of key Obama policies, including ultra-low interest rates, the bailout of the largest financial institutions and its subsidization of “green” energy. Wall Street Democrats also profit from the expansion of government since, as Walter Russell Mead points out, so many make money from ever-expanding public debt.
What most marks the gentry, particularly in California, is their insensitivity to the impact of their policies on working-class and middle-class voters. They may support special breaks for the poor, but are in deep denial about how high energy and housing prices – in part due to “green” policies – are driving companies and decent-paying jobs from the state. The new “cap and trade” regime about to be implemented figures to push up gasoline and electricity prices for middle-income consumers, who, unlike the poor, have little chance of getting subsidies from Sacramento. High energy prices, one assumes, have less impact on the Bay Area or West Los Angeles Tesla- and BMW-driving oligarchy than to people living in the more extreme climate and spread-out interior regions.
The gentry liberals’ power stems from their dominion over most of the key institutions – the media, the universities, academia and high-tech – that provide both cash and credibility to the current administration. The gentry impact is epitomized by hedge-fund billionaire and environmentalist Tom Steyer, an increasingly influential figure in Democratic circles, as well as nanny-state billionaire Michael Bloomberg and financier George Soros. It is largely the gentry who are pushing climate change as the party’s big issue, even though the voters, notes Gallup, rank it as among the least-important issues.
The Populist Progressives
Many more traditional left-leaning members of the Democratic Party – whom I would call the populist progressives – recognize that the Obama years have been a disaster for much of the party’s traditional constituencies, notably, minorities. Although the nation’s increasingly wide class divides and stunted upward mobility has been developing for years, they have widened ever more under Obama, as the wealthy and large corporations have enjoyed record prosperity.
Although too loyal to openly abandon the first black president, and perhaps too terrified of the Republicans, the populist Left sees Barack Obama as unnecessarily timid in pursuing the war against the hated “1 percent.”
As Massachussetts U.S. Sen. Elizabeth Warren has noted, the priorities in both Congress and the administration after the financial crisis was not to help the millions damaged by the Great Recession. “The government’s most important job,” she remarks, “was to provide a soft landing for the tender fannies of the banks.”
In the future, particularly as President Obama fades from view, the new populists will inevitably have conflicts with their party’s key gentry backers. The campaign by Minnesota U.S. Sen. Al Franken against the Comcast merger with Time Warner – uniting two huge firms tied to the gentry – could prove a harbinger of this evolving tension.
Standing up to the oligarchs could make Warren, as the New Republic noted recently, a potential “nightmare” for the expected presidential run of Hillary Clinton and Clinton’s phalanx of insiders, Wall Streeters and 1 percenters. But the populists’ often-blunderbuss redistributionist tendencies – seen most notably in deep blue big cities – could alienate many middle-class voters who, for good reasons, suspect that this redistribution will come largely at their expense.
The Old Social Democrats
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