Three-headed Democratic Party

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

Ironically, the weakest part of the Democratic Party is also the last bastion of traditional American liberalism. The old Democrats are the remnants of the great political party that produced the likes of Andrew Jackson, Harry Truman, and, to some extent, even Bill Clinton. Unlike the other party factions, this group can appeal consistently to the middle and working classes, including the famous “Bubba” vote. Unlike the gentry, or the coastal new populists, they tend to be relatively moderate on social issues.

This group is the most closely associated with private-sector labor, manufacturing and areas dependent on fossil-fuel production. Long dependent on white working-class voters, they are the most threatened by the increasingly hostile attitudes among them to President Obama and his gentry liberal regime. Already, some building trade unions in Ohio, angry about delays on the Keystone XL pipeline and other infrastructure projects, have even shifted toward the GOP.

These shifts directly threaten the last redoubts of the Old Democrats in such conservative states as Louisiana, Arkansas, Montana, Alaska, West Virginia and even purplish Colorado. Although Old Social Democrat senators tend to support fossil fuel development, they and their private-sector union backers increasingly find themselves outbid by green gentry Democrats. Steyer has pledged more money to the party this year than Keystone backers, such as the Laborers Union, have given since 1989.

How these divides can play themselves out

Clearly, there’s potential for some serious class warfare here. A party that represents both the tech oligarchs and the environmental lobby does not share the same concerns of, say, aspiring suburban homeowners or unionized energy workers. Steyer and Co. may not be able to remove the Old Democrats through primaries yet, but their approach is helping to erode working-class support, which could cost them both House and Senate seats.

As the prime beneficiaries of the economic recovery, the gentry are vulnerable to attacks from the populists, who, rightly, see the wealthy’s outsized gains as anathema in an economy that has done precious little for the working and middle class.

Here, the old Democrats would tend to make common cause with the new populists. But such a shift to the economic left, as opposed to the green or cultural left, risks support over time from companies like Google, who may be encouraged further to step up their efforts to gain influence among conservatives.

To win nationally, the party needs to make room for all three kinds of Democrats. But the issues of class and inequality threaten to undermine any hope for comity.

Just as it has increasingly become the case with the GOP, the most vicious Democratic struggles won’t be against their political opposition, but between each other.

This article first appeared in the Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.