Can Biden Make the Democratic Party Safe for Moderates?

(Bloomberg Opinion) -- Last night’s Democratic debate made it clear that the party is no friend of the American business community. With few exceptions, the candidates called for higher spending, higher taxes, bigger government and more protectionism. If the party is going to resist a major shift to the left, then it will be up to Joe Biden to make the case tonight.

The opportunity is there: President Donald Trump’s costly trade war and refusal to even consider entitlement reform have worried the business community and left a huge opening for Democrats to become the party of cosmopolitan business. It’s not as if it would require a radical shift in the party’s strategy or image; white Democrats are younger, more educated and more urban than their Republican counterparts, while former President Barack Obama is still wildly popular with the Democratic base despite leaving office as a Wall Street darling. Hillary Clinton, remember, raised far more money than Trump from the business community in general and Wall Street in particular.

But any hopes that the 2020 Democrats would build on the Obama-Clinton legacy were considerably dimmed last night.

Out of the gate, Elizabeth Warren took aim at Wall Street, the health insurance industry, oil companies and corporations in general. She declared that, despite a record number of Americans saying that the current economy was working for them, in fact it was only working for a sliver at the top.

No candidate on stage pushed back on this notion, and several doubled down. At least a one explicitly endorsed Alexandria Ocasio-Cortez’s proposal for a 70% top marginal tax rate. When Beto O’Rourke, perhaps the best-known “moderate” on the stage, was asked whether he would support raising marginal tax rates to 70%, he ducked the question by speaking in Spanish.

Nor were Democrats shy about expanding the scope of government. Lots of Democratic voters support Medicare for All in theory. Few realize, however, that unlike Medicare as it is currently structured, Medicare for All would entail the elimination of private health insurance. Currently, roughly a third of Medicare recipients use private insurance.

Warren made it clear last night that she would end all private health insurance in the U.S. O’Rourke tried to make a defense of giving Americans choice in their health care, but he was shouted down by New York Mayor Bill de Blasio.

The only Democrat to offer any forceful alternative to the big government position was former businessman and member of Congress John Delaney. But went into the night polling at approximately 0%, and judging by the reactions it doesn’t seem as if he is going to improve much on that number.

That leaves the defense of the moderate Democratic position entirely to Biden in tonight’s debate. Yes, it’s still early — the first actual votes are 221 days away — but there may be a great deal riding on his performance.

If Biden declines to defend the moderate position, or if he does and his poll numbers suffer, that will reveal a lot about where the Democratic Party is headed. From the looks of last night’s debate, it’s sharply to the left of the Obama-Clinton years.

To contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Karl W. Smith is a former assistant professor of economics at the University of North Carolina's school of government and founder of the blog Modeled Behavior.

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