(Bloomberg Opinion) -- More than two years into his presidency, Donald Trump has remade the Republican Party in his own image. An even greater change, however, is occurring in the Democratic Party — and the president’s populist politics are likely to benefit Democrats more than Republicans.
Trump’s election was supposed to have heralded a political realignment in America. The Republican Party, long associated with the interests of business and more affluent Americans, would now be fueled by the white working class and a powerful nativist sentiment. In the Democratic Party, the interests of organized labor and the working class were giving way to those of Wall Street, Silicon Valley and the cosmopolitan elite. The new partisan divisions would be based not on class but on openness to globalism.
Exhibit A is Alexandria Ocasio-Cortez and her off-the-cuff mention of a 70 percent tax rate, which has sparked a national discussion. Polls show that it’s popular not only with Democrats but with a plurality of Republicans. Celebrated left-wing economists argue that high tax rates are necessary to prevent the U.S. from slipping into an oligarchy, a message that is likely to resonate strongly among anti-globalist Trump supporters.
Likewise, Ocasio-Cortez has forced elites on both sides to at least grapple with the economic tenets of modern monetary theory. MMT, as it is known, suggests that a government with its own currency does not need to raise taxes in order to increase spending. So far MMT has faced strong pushback from elites of the left and right. But its basic contention, that deficit spending isn’t as bad as you have been led to believe, is gaining support.
These two propositions — that the government should check the power of private-sector billionaires and should spend freely to alleviate social ills — form the core of the classic leftist platform. And these positions are becoming more influential, not less, in the Democratic Party.
Meanwhile, back in the Republican Party, the white-working class that was so crucial to Trump’s victory has yet to meaningfully redefine GOP policy. The sole legislative achievement of the president’s first two years was a tax cut that was focused primarily on improving the competitiveness of U.S. business. The law may yet benefit workers, but in the same ways that pro-business politicians have always argued that increased economic growth will benefit workers. And Trump’s two appointments to the Supreme Court are most notable not for their embrace of white working-class values but for their outspoken opposition to government regulation.
As for one of the defining issues of the 2016 campaign — immigration — both Republicans and Democrats have increasingly positive views of immigrants. So maybe the nativist turn in the Republican Party represented not a fundamental shift but frustration with the status quo.
So where does the country go from here? That depends a lot on which candidate wins the Democratic nomination for president.
If their nominee in 2020 is someone like Bernie Sanders, Elizabeth Warren or Sherrod Brown, then I predict a rapid shift. Democrats would win back many of the white working class voters they lost and cruise to victory. Centrist pro-business Democrats would be sidelined, and the only resistance to the president’s tax and spending priorities would be from Senate Republicans. That would just drive more populists out of the Republican Party and into the Democratic Party, which would enter a period of almost complete electoral dominance.
If, on the other hand, Democrats nominate a more centrist candidate, such as Kamala Harris or Cory Booker, then the uneasy status quo would remain. It’s possible, if the Democratic candidate is painted as a tool of Wall Street or corporate America, that Trump could even be re-elected.
Even if a centrist Democrat wins, the underlying dynamic would remain the same. The number of Democrats identifying as liberal is only increasing, and a centrist Democratic president would be under constant attack from the left. The left would eventually overwhelm the centrists, but the contest could be lengthy — and ugly. In this case, there would be no era of Democratic Party dominance.
In the long run, however, the end result in both cases would be largely the same. America is moving leftward. And that shift infuses the left of the Democratic Party with an energy that is unmatched anywhere else along the political spectrum.
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 senior fellow at the Niskanen Center and founder of the blog Modeled Behavior.
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