ASPEN, Colo. — Is income inequality the defining challenge of our time? Bernie Sanders thinks so. He ran for president as inequality’s most ardent foe. So does Elizabeth Warren, the other champion of the Democratic Party’s left.
Even President Barack Obama, in his understated way, seemed to agree. Notably, he engineered perhaps the most aggressive redistribution of income since President Lyndon B. Johnson in the 1960s.
But
maybe the issue should not be the party’s lodestar. This month, a
clutch of Democratic governors, members of Congress and city mayors
gathered with Democratic fund-raisers, strategists and other champions
of liberal causes in this secluded patrician resort in the Rockies to
hear that all this attention to income inequality could actually hurt
them.
“Income
inequality is severe,” Jon Cowan, president of the centrist Democratic
research group Third Way, told the assembled politicos. “And parts of
the economic system are unfair. But these are not the central problems
vexing most Americans. Many of the solutions proposed to meet them are
not responsive to the aspirations, needs and values of those Americans.”
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The focus on inequality misses the mark on more than substance, he argued. In a country where only a quarter of voters identify as liberals, and two-thirds believe
that “big government” is the main threat to the nation’s future — and
where over the last decade the Democratic Party has hemorrhaged
governorships, seats in Congress and half of its seats in state
legislatures — focusing on income redistribution could amount to
political suicide. Instead, he argues, Democrats should aim at what he
defined as the scarcity of opportunity afflicting so many Americans,
“the great moral cause of our time.”
Mr.
Cowan’s exhortation might be understood as the typical call for
repositioning that follows a lost presidential election. Third Way,
which organized the gathering, is, after all, an intellectual heir to
President Bill Clinton’s centrist politics — more skeptical of
deregulation than in the Clinton era, and less interested in fiscal
balance, but equally at loggerheads with the Democratic Party’s left.
And
yet the Democratic infighting over message and strategy in the wake of
November’s stunning defeat suggests that something existential is going
on. Only eight years after they boldly proclaimed the economic crisis to be a critical opportunity, Democrats lost touch with their voters.
The
financial crisis and ensuing recession scrambled Americans’ fears and
desires, leaving an electorate defined by some variety of anger: at
stagnant paychecks, at bank bailouts and government spending, at police
shootings of blacks and at women’s lower wages; anger against a “rigged
system.” Unfortunately for the Democratic Party — the party of
government — most voters tend to think government is doing the rigging.
The
most inspiring campaigners, Senator Sanders on the left and Donald J.
Trump on the right, did not convince voters of the wisdom of carefully
honed policy prescriptions. They ran on an apocalyptic vision of America
under siege, with clear enemies in sight. Mr. Trump, an interloper of
scant ideological baggage who took over a Republican Party at least as
clueless as Democrats about voters’ preoccupations, offered the more
powerful apocalypse.
The
question for Democrats looking for a path out of the wilderness — for
Mr. Cowan and Senator Sanders; for Senator Warren and the Senate
minority leader, Chuck Schumer, who hopes to woo voters by offering a “Better Deal”
— is whether they can appeal to voters still angry because their lives,
their aspirations and their sense of self have been derailed over the
last few years.
The
problem is hardly unique to American politics. Across the Atlantic,
populist parties have arisen to rattle the established political class,
though nowhere have they achieved the sort of upset pulled off by Mr.
Trump.
Two
years ago, three economists from the Free University of Berlin, the
University of Bonn and the University of Munich published an analysis
of the political fallout from financial crises in 20 advanced
economies, including the United States, over the last 140 years. On
average, they estimated, far-right parties increased their share of the
vote by 30 percent in the years after the crisis, as voters blamed
minorities and foreigners for their plight.
Voting
for governments in power declined, and the share going to the
opposition grew. Politics became more fractionalized as voters who lost
faith in standard political pitches sought alternatives. Governing, of
course, got much tougher. And some of these effects persisted 10 years
or more.
It is hardly surprising that government — not Wall Street or big business — gets the blame. As noted in another study
by economists at Princeton, the University of Chicago and the
University of British Columbia, it is the government that mediates the
competing interests of creditors and debtors.
Banks got a bailout after the financial crisis of 2008. Homeowners whose mortgages were underwater got next to nothing.
“From
this selective intervention, additional economic inequality and
political polarization may ensue, compounding and amplifying the initial
political effects of the crisis,” the researchers wrote.
How much attention to devote to income inequality is only one of the decisions Democrats have to make.
To
recapture the presidency, Democrats must recover the support of the
middle class — people in families earning $50,000 to $150,000, whose
vote went to Mr. Trump. Three-quarters of voters in swing states are
white, according to data from the Cook Political Report presented by
Third Way. Mr. Trump won white voters by 21 percentage points.
Does
this mean Democrats should de-emphasize racial discrimination? Should
they stop talking about guns and the right to choose to get candidates
elected in, say, Louisiana? What will voters elsewhere think?
Joan C. Williams, a professor at the University of California Hastings College of the Law who this year published
“White Working Class: Overcoming Class Cluelessness in America,” a
critique of liberals’ inability to understand this constituency, argues
Democrats can offer an inclusive platform that appeals to all Democratic
constituencies, like the proposal presented by Senator Schumer focused
on jobs.
“We
must realize that we forgot an important sector of social disadvantage,
which is social class,” she added. “But it is not convincing to say we
should go beyond identity politics. That is like telling women and
blacks, O.K., you had your 40 years of attention, and now we have to
move on.”
Still,
Professor Williams argues against a move to a Democratic center that is
friendly toward Wall Street and favors trade agreements, “two of the
reasons that the working class is so done with the Democratic Party.”
There
is much that makes sense in Third Way’s approach. Mr. Cowan argues that
the battle for redistribution of wealth that shaped Democratic politics
over the 20th century culminated with the Affordable Care Act — the
last missing piece of the social safety net, offering health insurance
to all. Now, he adds, the critical task is to remedy the lack of
opportunity faced by so many Americans seeking to make a decent living
in the tech-heavy, globalized 21st.
Offering
free college is not the way to do it. That can sound meaningless in the
large swaths of the country where fewer than 30 percent of residents
have a bachelor’s degree. Half of the people who start a four-year
program do not finish it. A national apprenticeship program that could
help connect people to good jobs is a more fruitful option.
The
government could also encourage small-business formation — often
stifled for lack of credit and seed capital. It could take a more
proactive role to lean against market power that shuts rivals out of
markets.
The
challenge is not to prepare for a jobless future but to ensure
available jobs offering decent incomes to working families, Mr. Cowan
adds. A $15-an-hour minimum wage is a bad idea. But wage subsidies and a
regional minimum wage adjusted for the cost of living might do the
trick. To bolster retirement finances, employers could be required to
contribute a minimum to workers’ private retirement plans.
This
platform, by the way, would probably mitigate income inequality. It
would just do so in a more business-friendly manner than the one
suggested by the slash-and-burn talk further to the left. It has a
shortcoming, however: It will be harder to sell a program that lacks
villains.
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