The US Democratic party is returning to its roots. During Barack Obama’s administration, the president’s spokesman, Robert Gibbs, derided the “professional left” for wanting things like “Canadian healthcare.” Eight years on, the most popular new liberal faces are asking for just that — and much more.
Consider Alexandria Ocasio-Cortez, a 28-year-old “ democratic socialist” who beat Joseph Crowley, the heir apparent to minority leader Nancy Pelosi, in a Democratic primary a few weeks ago. Mr Crowley’s top donors include Blackstone and New York Life, the insurance company. Ms Ocasio-Cortez, who took no corporate funds, believes that “money in politics is the existential crisis of our society”.
Chief executives should pay attention: this is the new face of the Democratic party, one that looks increasingly likely to win back the House of Representatives this autumn.
While many of the new progressives are young, ethnic minority women, the key thing to pay attention to here is not their messaging around race or gender, but class. “Our problems aren’t right or left. They are top and bottom,” says Ms Ocasio-Cortez, who recently made a tour of Republican-voting Kansas with Bernie Sanders (for whom she was an organiser).
She was inspired to run by the Standing Rock pipeline protests in North Dakota, and also by the struggles of her mother following her father’s death after the financial crisis. “Our party hasn’t been nearly ambitious enough or fought hard enough for working people,” she says, reeling off inequality figures. “And so that resentment has been channelled towards [electing] a Republican.”
It is true, and is something that Democrats, who have moved too far away from their labour roots in recent decades, have not fully reckoned with. From Bill Clinton’s administration onwards, the Democratic party has been led by “neoliberals” who were more or less happy to continue down the laissez-faire path set during the Reagan era.
Mr Clinton backed the North American Free Trade Agreement and financial deregulation, much to the dismay of many Americans and some in his own caucus. President Obama, who of course recycled many people from Mr Clinton’s economic team, failed sufficiently to curb the financial industry in the wake of the 2008 crisis.
It is telling that close to a thousand people were convicted during the savings and loan crisis of the late 1980s and early 1990s. By contrast, only one top banker was sent to jail for subprime malfeasance.
The new progressives are of course a reaction to this. They want the Democratic party to go back to worrying about citizens, rather than consumers, in a country that guarantees universal healthcare, education and a liveable income. That seems radical, even for the left — but only in a US context. In Europe, Ms Ocasio-Cortez would qualify only as a run of the mill social democrat asking for what most people consider basic citizen rights.
That is worth remembering, as many people in the American business community (not to mention party elders) anxiously watch the rise of these “socialist” millennials. European style social democratic policies tend to prioritise safety nets and lower inequality over higher growth. But they certainly have not resulted in business falling off a cliff.
Many of the things that these new socialists want might even be good for the economy. Take healthcare. Recent polls have found that it is the top issue for voters. It is also the single biggest cost for many US businesses after wages. Health benefits now make up about 20 per cent of total worker compensation (up from 7 per cent in the 1950s). This contributes to wage stagnation and slower consumption growth.
Given this, as well as the fact that this is a competitive disadvantage for American business relative to global competitors based in countries with nationalised health systems, I am surprised that more American companies are not calling for single-payer healthcare.
Progressives and the business community agree that all Americans should spend some time in higher education. About 65 per cent of the jobs being created in the US require a post-secondary degree. Yet only about half of American students get one.
That leaves business to pick up the slack on training workers unprepared for 21st-century employment because they only have a high-school degree. This is a huge cost, not to mention a competitiveness crisis for the US as a whole. While it may be a stretch to make four-year college free, two years of college wrapped into public high school programmes have been rolled out in many states over the past few years. And in many cases business, not government, has led that effort.
That is important, because if the new millennial socialists want to be successful if and when they take Congress, they will need to build broad coalitions. The American left had them once, from the New Deal in the 1930s up until the 1980s. The message was simple: all working people matter. It is a message that the Democratic party as a whole would be wise to return to.
Letter in response to this column:
Get alerts on US politics & policy when a new story is published