A century of new rules—from the advent of direct presidential primaries, to the end of the seniority system in Congress, to conservative Supreme Court decisions on campaign finance—has dramatically eroded the power that official party structures once exercised over politicians and their platforms. Today, an informal network of donors, policy and political groups, media outlets, consultants, labor unions, and star politicians determine in what broad directions both sides of the spectrum will evolve over the long term. Many of these players don’t actually identify themselves by party but rather by ideology.
After the Democrats’ drubbing in last November’s election, the informal network of leaders and institutions that loosely guides the Left began the task of regrouping. The network has shifted politically from the days of Bill Clinton and the centrist Democratic Leadership Council. Today, many groups look to Sen. Elizabeth Warren of Massachusetts and to New York Mayor Bill de Blasio for inspiration; the key think tanks are places like the Center for American Progress in Washington and the smaller New York”“based Roosevelt Institute; and behind many of the organizations is a network of mega-rich donors called the Democracy Alliance.
As these liberal strategists took stock, most acknowledged that the Democratic side had genuine underlying problems that needed to be fixed. And while the prescriptions they offered varied, one of the common themes that gained momentum was that the Democratic Party needed to strongly identify itself with the fight against economic inequality. For many progressives, the argument was not simply that ending economic inequality was the right thing to do; it was that a populist campaign built around this theme would mobilize what strategists call a “new American majority” or a “rising American electorate”—allowing Democrats to take back the country that they thought they had won in November 2008.
Can this actually work? I would like to think so; the goal of reducing economic inequality is certainly worthwhile. And many of the policies that progressives are promoting under the umbrella of their developing anti-inequality crusade—from raising the minimum wage to requiring paid sick leave to strengthening bank regulation to increasing spending on science, education, roads, and bridges—have merit. But after talking to leaders of this network in recent weeks, and reading carefully the papers and essays that promote the new strategy, I have my doubts about whether a political campaign built around these kinds of proposals will, in fact, create a new Democratic majority.
THERE IS NO SINGLE group that dominates the Democrats’ informal network, but the one that has the greatest reach, due to the power of its purse, is the Democracy Alliance. It was founded in 2005 by Rob Stein, a venture capitalist who had worked for master political operative Ron Brown at the Democratic National Committee and the Commerce Department. The history of the Democracy Alliance says a lot about how the Democrats’ informal leadership network has evolved over the last decade.
Stein had studied the way conservatives constructed a powerful political and intellectual infrastructure within the Republican Party. After George W. Bush defeated John Kerry in November 2004, he persuaded financier George Soros, Progressive Insurance CEO Peter Lewis, and other wealthy donors to join forces in an organization that would build a progressive infrastructure to counter that of conservatives. “You can’t promote ideas without an infrastructure,” Stein told them. “Quit complaining about George Bush and Karl Rove. They’re not the problem. We are.”
He recruited more than 75 individual donors, and, with the backing of former Service Employees International Union President Andy Stern, also got a handful of unions and other institutions to sign on. The new group held its first meeting in April 2005. About a third of the donors were heirs and heiresses and about half were 1960s liberals; the rest were moderates, including a few Republicans, whom Bush’s policies had alienated. Most of the active business people came from finance or high technology—fields where they wouldn’t have had to cross swords with unions or the Environmental Protection Agency.
The alliance didn’t contribute money directly to progressive groups; instead, based on careful screening, it recommended about 25 groups for its donors to fund. Using this process, the donors would, over the next decade, pump about $500 million into various liberal organizations. Alliance funds turned former Clinton Chief of Staff John Podesta’s Center for American Progress from a small policy group into a competitor with the conservative Heritage Foundation. They funded David Brock’s Media Matters for America and backed ventures like Catalist and America Votes, which were designed to help Democrats take political advantage of new digital technologies.
The strategy was contained in a document titled “2020 Vision Framework,” which made a number of recommendations. For one thing, it called for an increase in the alliance’s efforts at the state level, where Republicans have recently been hammering Democrats. “In order to avoid a repeat of the current decade, and given the stalemate in Washington,” the document said, “we must focus even more heavily on building power in the states.” It also laid out three policy priorities that would guide the group’s funding recommendations: economic inequality, campaign-finance reform, and climate change. Of these three, it was the first that appeared to be the most important. “The central issue is the economy,” the group’s president, former Soros aide Gara LaMarche, told me.
While the alliance continued to recommend funding many of its older mainstays, such as the Center on Budget and Policy Priorities, it also included three organizations—the Center for Popular Democracy, the Working Families Party, and National People’s Action—that come out of the populist Left. It had recommended funding a few groups like this before, but, taken together, these groups suggest a leftward turn. The Center for Popular Democracy is a federation of groups that includes some of the old chapters of the much-attacked community-organizing group ACORN. The Working Families Party is a New York”“based ally of de Blasio that was founded in 1998 and has affiliates in six states and the District of Columbia. And National People’s Action is a left-wing, Chicago-based group that was started by disciples of Saul Alinsky and has affiliates in 17 states.
The goal of the Working Families Party, its executive director Dan Cantor told me, is “winning Democratic primaries with populist Democrats” and “running progressive Democrats against bad Democrats.” The executive director of National People’s Action, George Goehl, wants to pressure Democrats to take the issue of inequality seriously. The group, he explains, “sees the Democratic Party as an active field of struggle.” A Working Families affiliate and National People’s Action both enthusiastically backed Chuy Garcia’s populist challenge to Chicago Mayor Rahm Emanuel earlier this year.
The Democracy Alliance’s outreach to the Left reflects, and has contributed to, a growing convergence within the informal network of groups that are trying to develop a strategy for the Democratic Party. While there may be differences between the think tanks and the netroots, as well as between those who proudly call themselves “populists” and those who prefer the terms “progressive” or “liberal,” there is, increasingly, a common commitment to create what de Blasio has called “a grand progressive coalition” that will achieve “a holistic solution to economic inequality.” There is also surprising unanimity about what such an effort means historically and about the kind of reforms it should demand.
JUST AS TEA-PARTY conservatives look back on the era of America’s founding as their political model, the new progressives and populists also have a historical era that is their touchstone: Franklin Roosevelt’s New Deal and its postwar aftermath. “Our economy was more balanced in the decades prior to 1980 and functioned remarkably well during the middle of the 20th century,” writes economist Joe Stiglitz in “Rewriting the Rules,” a report the Democracy Alliance”“backed Roosevelt Institute published in May. Paul Krugman calls these years “the golden age of economic equality.” Those who look back fondly to this era praise the New Deal’s banking rules, its support for collective bargaining, its progressive tax structure, and its use of government spending to boost employment and spur economic growth. “In the 1930s, policymakers stepped in and made new rules,” Warren said at a dinner on May 5 in Washington. “For half a century, those rules worked.”
Beginning in the 1970s, according to this narrative, a sort of political dark age set in, as the democratic pluralism and relative economic equality created by the New Deal came under attack—first by business, then by conservatives allied with business. “Business interests mobilized,” Paul Starr writes in the liberal American Prospect, leading to a “long decline of unions” that “has probably been the single most important factor in the slide toward greater inequality in power and economic rewards.” When Ronald Reagan took office after the 1980 election, Warren said, “Washington took financial cops off the beat by slashing funding of our regulators, letting big banks load up on risk and target families with dangerous credit cards and mortgages. Washington also worked feverishly to cut taxes for those at the top, opening huge loopholes for big corporations and billionaires.”
President Franklin D. Roosevelt signing the Social Security Act in 1935. (FPG/Archive Photos/Getty Images)
The populists and progressives argue that this offensive of the last three decades has eviscerated the middle class. “Supply-side economics hollowed out the middle class,” David Madland of the Center for American Progress wrote in Salon. As a result, they see an America increasingly divided between the very rich and everyone else. In a May 12 speech in Washington introducing “Rewriting the Rules,” Warren asked, “What kind of income growth did the 90 percent get? Nothing. Zero. One hundred percent went to the top 10 percent.” In its “2020 Vision Framework,” the Democracy Alliance writes, “For decades our economy has produced falling incomes and growing economic insecurity for most Americans,” as well as “a downward spiral of falling wages.”
These progressives aim to restore the golden age: to return to the New Deal approach of regulating finance, taxing the rich, encouraging unions, and investing in infrastructure. Such measures, they say, will reduce inequality and promote economic growth by providing a needed boost in consumer demand. The proposals put forth by the Roosevelt Institute in “Rewriting the Rules” and those in the platform of a recent “Populism 2015” conference—sponsored by USAction, National People’s Action, and the Campaign for America’s Future—were remarkably consistent. The Roosevelt report called for higher taxes on the 1 percent, a tax on financial transactions, the breakup of banks that were too large to fail, the expansion of Medicare into a universal program for all ages, labor-law reform to aid unions, the creation of banks run by the postal system, paid sick leave, a $15 minimum wage, and “large infrastructure investment to stimulate growth.”
A recent CAP report on “Inclusive Prosperity,” authored by former Obama economic adviser Lawrence Summers and British politician Ed Balls, was less specific because it was aimed at Europe as well as the United States, but its approach was consistent with the other proposals for reducing inequality. Pointing to the similarity between Summers’s CAP report and the report by Stiglitz—who had been critical of Obama’s economic policies when Summers headed the National Economic Council—LaMarche told me, “Everybody is now going in one direction.”
POLITICAL ACTIVISTS AND academics often advance proposals that in their eyes would benefit humanity but have no chance of winning public acceptance or being acted upon. But many of the groups and individuals who make up the current progressive infrastructure believe that, by conducting a broad campaign against inequality based on aggressive government action, they are creating a new progressive majority. In a recent interview with The Nation, de Blasio suggested that, on economic issues, the “understanding amongst the populace is much more advanced than among a lot of the political leadership.”
When I asked Felicia Wong, the president of the Roosevelt Institute, and LaMarche’s predecessor at the Democracy Alliance, how she expected the institute’s ideas would fuel a new majority, she referred me to the work of pollster Stanley Greenberg. In a recent issue of The American Prospect, Greenberg describes a “Rising American Electorate” that is a “new majority” and that consists of “blacks, Hispanics and new immigrants, millennials, unmarried women, and seculars.” The Democracy Alliance and the groups it funds use similar language. In its “2020 Vision,” the alliance describes the “Rising American Electorate” as “voters of color, young people, and single women.” Populism 2015’s conference platform referred to a “new majority of people of color, young people and working women.”
Greenberg argues that this Rising American Electorate already accounts for a majority of the electorate and is growing. “The Rising American Electorate of African Americans, Hispanics, millennials, and unmarried women will constitute 54 percent of the electorate in 2016,” he writes. “If you also include the seculars with no religious affiliation, this rising share of the electorate will increase to 63 percent. Each of these groups is steadily growing and, as of early 2015, nearly two-thirds of them intend to vote for Hillary Clinton, assuming she is the nominee.”
The way to reach these voters, Greenberg and others argue, is with an agenda that targets economic inequality. Greenberg writes that advocates of “”Š’centrism’ could not be more wrong. The key to both winning today’s white working-class voters and building overwhelming majorities with the Rising American Electorate is a robust agenda of progressive reform and government activism.” Greenberg assures his readers that the “new American majority … is calling for drastic improvements in wages and employment rights,” that Americans “are ready to tax the richest,” that they have “a special disdain for overpaid CEOs,” and that they “are ready to see deep investments to rebuild American infrastructure.”
BUT IS THIS RIGHT? Is a new majority in fact ready to support a political agenda based on ending or reducing economic inequality through government activism? There are circumstances like those of the early 1930s when a majority of Americans have backed progressive economic reform and government intervention and even the kind of radical reforms envisaged by the Roosevelt Institute—but are we in fact living in such a period?
I fear that the new populist approach is based on several assumptions—about the economy and the electorate—that are feeding false hopes of success. The first flaw has to do with the status of the middle class. The populists assume that the rich are currently getting richer and that everyone else is suffering; that the middle class is vanishing and that the income of the great majority of Americans—90 percent, according to a CAP report—has stagnated over the last 30 years. This suggests a politics that could unite the bottom 90 percent against the very top. “The most important political competition over the next decades will not be between the right and left, or between Republicans and Democrats,” writes Robert Reich in The American Prospect. “It will be between a majority of Americans who have been losing ground, and an economic elite that refuses to recognize or respond to its growing distress.”
But this picture of American class structure may be mistaken. While incomes and wealth at the very top have soared, and while people at the bottom of the economic ladder—many of whom have only high school degrees or less—are indeed threatened with falling incomes and joblessness, middle America is not dying or disappearing. Middle-class jobs in factories are vanishing, but there is reason to believe they will be replaced by white-collar workers in education, health care, and all the various occupations that require familiarity with and use of computers. MIT economist David Autor, who popularized the idea that technology was hollowing out the middle class, has changed his views. In a presentation last summer to the Kansas City Federal Reserve, Autor portrayed low-skilled, low-wage occupations as most susceptible to being automated out of existence, while saying that middle-skilled occupations involving “interpersonal interaction, flexibility, adaptability, and problem-solving” are “likely to persist and, potentially, to grow.”
Middle-class income has also not stagnated or fallen. Over the last three decades, it has risen (although not nearly as fast as that of the top 1 percent). From 1979 to 2007, on the eve of the Great Recession, median income rose 50 percent, according to economist Stephen Rose. Using figures from the Congressional Budget Office, Rose also found that income for the bottom 90 percent rose 42 percent during the same period. During the Great Recession, from 2007 to 2011, the middle class—defined as the third income quintile—lost pretax income, but when post-tax and transfer payments are included, its income did not decline at all and is now rising again. Rose’s views are controversial, but in my experience, they more accurately reflect the America that I have seen while traveling as a journalist.
The populists project a view of the economy that looks like a martini glass, with the very rich concentrated at the top and a narrow neck that extends to a large base where most Americans are concentrated. Some politicians have conveyed this image as well. In the recent Chicago mayoral election, Garcia portrayed Chicago as “a city of the very rich and the very poor, with fewer and fewer people in between. We are becoming a city of glittering buildings surrounded by crumbling neighborhoods.”
This is a portrayal that even a brief tour of the city’s neighborhoods would contradict. The real division in Chicago—and, I would suspect, in other cities and states—is not so much between the very rich and everyone else, but between thriving middle- and upper-middle-class neighborhoods and those boarded-up neighborhoods inhabited by the very poor. As Garcia and his populist followers should have learned, this is not a class division that is conducive to a progressive populism that seeks to unite the 90 percent against the very rich. In fact, outside of a Democratic town like Chicago, it may be more conducive to a right-wing populism than a left-wing populism.
To see why, it helps to understand the history of both liberal and conservative populism. Since the Civil War, there have two major left-wing populist movements against economic inequality. The first was the populist movement of the 1890s and the second was the redistributionist movement of the early 1930s, typified by Huey Long’s Share the Wealth movement. Both these populist episodes occurred during depressions and at a time when there was no safety net—no Social Security, unemployment compensation, Medicare, or Medicaid—to cushion the blow of massive unemployment. During the 1930s, the middle class felt in danger, historian Alan Brinkley has written, “of being plunged back into what they viewed as an abyss of powerlessness and dependence. It was that fear that made the middle class, even more than those who were truly rootless and indigent, a politically volatile group.” The result was a left-wing populism directed mainly against the wealthy and powerful.
But after the passage of Medicare and Medicaid, as well as the expansion of Social Security, the politics of middle-class fear changed. Protected by government social programs, the middle class didn’t have to worry for its sheer survival during economic downturns. Instead, during downturns, some middle-class voters became susceptible to fears that they would have to pay higher taxes in order to aid those below them. As a result, they embraced a right-wing populism that sought to rally the middle class against the lower class (often identified by racial or national origin) and also against the infamous liberal elite, who were deemed to be allies of the lower class. This kind of populist politics flourished during the tax revolt of the late 1970s. And it once again found a receptive audience during the recession that began six years ago.
The tea party arose in the winter of 2009, inspired by a CNBC pundit’s complaints that the middle class was having to pay for the mortgages that irresponsible homeowners, who didn’t possess the required income, had signed. It is true, as liberals often point out, that the movement is funded partly by the Koch brothers. But as anyone who interviews local conservative activists discovers, the tea party is a genuine grassroots movement with chapters across the country and numerous followers who see themselves as aggrieved members of the American middle class.
New York City Mayor Bill de Blasio speaks outside the Capitol on May 12, 2015. (Win McNamee/Getty Images)By contrast, attempts to found a left-wing counterpart to the tea party have fallen flat. The Coffee Party (with the ominous initials CPUSA) never really got off the ground. The Occupy movement lasted through the fall of 2011 and then fizzled. In New York, de Blasio was able to win office using populist appeals, but it remains to be seen whether a politics that succeeded in one of the country’s most liberal cities can be applied in Midwestern or Southern swing states. Indeed, there is little sign nationally that a left-wing rebellion against inequality is gaining active converts in the way that the tea party gained supporters during the Great Recession. The grassroots groups the Democracy Alliance funds seem to have the most impact in Democratic states or metro areas and often are little known to the general public. And the labor movement, which was once the mainstay of the Democratic Party’s grassroots and of a progressive economic agenda, continues to lose members.
In earlier periods, left-wing or progressive appeals to reduce economic inequality have even provoked conservative responses within the general voting public. After the 1984 election, in which Democratic candidate Walter Mondale made an appeal to economic fairness central to his campaign, Greenberg ran focus groups in Michigan’s Macomb County to discover why these white working-class voters had backed Reagan rather than Mondale. Greenberg found that these voters understood appeals to fairness as appeals to use their tax money for government programs to aid minorities. Outside of very blue areas, today’s populist appeals to reduce economic inequality could well be understood in the same manner.
Rob Stein, who no longer directs but continues to advise the Democracy Alliance, worries about the effect on voters of a campaign against economic inequality. “The fact of economic inequality is now fairly widely accepted and resonates with voters across the political spectrum and throughout the country. The challenge for national candidates is to address the multifaceted problems of inequality without proposing that the only solutions are substantially greater taxes, pervasive regulation, and more intrusive government bureaucracy,” Stein told me. (He emphasized that he was speaking for himself, not the Democracy Alliance or its partners.) “While economic inequality is generally accepted as a real and pervasive problem, significantly more intrusive government is not yet a popular solution among all constituencies in every region. It may be one day, but we are not there yet.”
Those who contend that a campaign for economic equality will produce, or is already producing, a new majority cite changing demographics as a cornerstone of their argument. “[I]ncreasing racial diversity, rising immigration, growing secularism, evolving family structures, and swelling metropolitan centers … are tied to revolutions in America’s values,” Greenberg writes. Transposing an old Marxist adage to the new populism, he predicts that “[h]istory is on the side of the ascendant revolutions.”
I’m not sure this confidence in demographics is merited. Ruy Teixeira and I predicted in 2002 that a new Democratic majority would emerge before end of the decade, and it did—but it has proved short-lived. One problem with predicting more lasting majorities based on demographics is that opposition parties can adjust. Republican successes in 2014 were not just the result of low turnout among young voters and minorities. They were also the result of GOP candidates moving to the center to defuse criticism from their Democratic opponents. Colorado Senate candidate Cory Gardner, Maryland gubernatorial candidate Larry Hogan, and even Wisconsin Governor Scott Walker all took the edge off their stances on abortion and, in Gardner’s case, contraception.
Moreover, it is difficult to say how the growing Hispanic population, upon which the calculations of a new majority rely, will vote in the years to come. Like most other ethnic immigrant groups, Hispanics tend to become less liberal as they move up the ladder in income and status. If Republicans at some point moderate their views on immigration, it’s entirely possible that Latinos could become a less reliable Democratic constituency.
Changing political circumstances also make it tough to predict how the views of age groups will evolve. Millennials have backed Democrats, but their support for Democrats in 2006 and 2008 was largely in reaction to George W. Bush’s ill-fated invasion of Iraq, the onset of the recession, and the Republican commitment to social conservatism. It may not last. As a group, they are susceptible to Republican arguments against “big government.” A recent, extensive poll of 18- to 29-year-olds by Harvard’s Institute of Politics showed support for cutting taxes, opposition to government spending, and distrust of the federal government. If “government activism” is an essential part of the new progressive majority, as Greenberg suggests, then millennials may soon jump ship.
SOME OF THE economic proposals that the progressives and populists favor could use further elaboration. Medicare for all? As it stands, some doctors refuse to take Medicare because they think its reimbursement rates are too low, and those seniors who can afford to do so purchase “medigap” insurance. Expanding the program could potentially create a very expensive two-tier system of health insurance. Other proposals seem a little daffy. During the Chicago mayoral election, a Roosevelt Institute report recommended slapping transaction taxes on Chicago’s stocks and commodities traders—a proposal that, if enacted, could damage one of the city’s most important industries.
Still, most of the new populists’ proposals are far from daffy. On the contrary, they are worthy of serious discussion. The policies themselves are not the problem. The problem is mediation—how to mediate between a commitment to achieving equality through government action and the reality of American politics. How would an electorate—which has demonstrated over two centuries (with the exceptions of FDR’s first term and the country’s years at war) its distrust of federal economic intervention—come around to supporting proposals that entail “government activism”? And how could a campaign against economic inequality be conducted in a way that didn’t suggest that a liberal elite, insulated from economic stress, was trying to get the middle class to fund programs for the poor?
Democrats have faced this dilemma before: In the 1980s, the party espoused principles and programs that put it at odds with a majority of voters. Democrats wanted government economic planning and increased spending on cities; they favored raising taxes; they embraced the counterculture and social movements of the ‘60s at a time when those movements were not widely accepted. To remedy this situation, some moderate and liberal Democrats got together in 1985, after another Republican presidential landslide, to form the Democratic Leadership Council.
The DLC was, as its many detractors on the Left will certainly remember, far from perfect. It can be faulted, for instance, for pressuring Democrats to reconcile themselves with a conservative economic and defense agenda. But it also played an important mediating role in getting Democrats to inoculate themselves against charges that they were at odds with the American electorate. It addressed the public’s fear that Democrats indiscriminately favored big government by launching a campaign to “reinvent government.” It nullified charges that the Democrats favored the poor over the middle class by supporting welfare reform. And it insisted that Democrats stress economic growth. As a result, Bill Clinton could campaign and win in 1992 on a platform of “putting people first” that united much of the middle and lower rungs of the economic ladder. Clinton, of course, promptly forgot what he had learned and ran afoul of the electorate in November 1994; but after that, he mastered the art of political mediation.
Progressives don’t have to abandon their attempt to reduce inequality or renounce the programs that would accomplish this. But rather than assuming that the electorate will be naturally receptive to a brash populist message, they need to assume the opposite: that winning the debate on economic equality will require mediating between one’s preferred policies and a fundamentally wary electorate.
Political consultants can do this for individual candidates. For instance, once the general election begins, it would be surprising if Podesta, who is in charge of Hillary Clinton’s campaign, didn’t advise her to follow the example of Bill Clinton in 1992 and Barack Obama in 2008 and 2012 by offering a middle-class tax cut and perhaps, too, some tax incentives for business. That may not be great economics, but it’s essential to overcoming voters’ qualms about government.
However, the donors who make up the Democracy Alliance and the groups they fund aspire to more than winning the presidency in 2016. They want to put the party on a long-term path to retaking control of statehouses and Congress. And the policymakers at the Roosevelt Institute or Center for American Progress don’t just favor a minimum-wage boost, which, after all, was endorsed by conservative Senate candidate Tom Cotton during his successful bid last fall to unseat Arkansas’s Mark Pryor. They want labor-law reform, much tougher bank regulations, a progressive rewrite of the tax code, and a raft of public expenditures—all long-term propositions.
To get to that point, they will have to develop a sophisticated politics, as the DLC did, to accompany their impassioned advocacy of economic equality as well as their views on campaign-finance reform and climate change. The Democracy Alliance has played a useful role in getting funders to move beyond their pet issues and causes, but in their strategy, they have largely replicated the prevailing conventional wisdom among the party’s progressive and populist groups about how a new majority and a Rising American Electorate will win power.
Democrats are not alone in facing these challenges. The Republican Party also includes elements that are at odds with much of the American electorate. The tea party is powerful within the GOP, but when tea-party favorites have ousted more moderate Republican Senate candidates, they have generally lost elections. Republican candidates like Mitt Romney who allow themselves to be identified too closely with the ideology of the party’s 1 percenters can also risk defeat. In other words, Republicans, like Democrats, have to find ways to mediate between their ideals and political reality. And whichever party is able to do that stands a good chance of winning majorities.
The Democracy Alliance and its allies have part of the Democratic problem right: The party needs to find a way to wrest control of the states from a powerful network of Republican funders and organizations. But the alliance and the groups it funds won’t succeed at this ambitious task, and they certainly won’t create a new nationwide majority, unless they can shape their campaign for economic equality so that voters—fearful of big government, worried about new taxes, skeptical about programs they think are intended to aid someone else—are willing to sign on.