Ignoring inequality issues spells end of New Democrats

It was a pitiful whimper from the last of a breed.

During last week’s House speaker election, almost all Republicans were voting for Paul Ryan and virtually all Democrats for Nancy Pelosi. Then the clerk called on Jim Cooper, a moderate Democrat from Tennessee.

“Colin Powell,” he declared.

A moment later, Gwen Graham, a centrist Democrat from Florida, cast her vote — for Cooper. A third moderate Democrat, Kyrsten Sinema of Arizona, voted for Rep. John Lewis, D-Georgia, who, along with the rest of the 183 Democrats in the chamber, voted for Pelosi, the San Francisco liberal icon.

All three dissidents are members of the once-powerful Blue Dog Coalition, which has seen its membership of Democratic moderates shrink to just 15 from 54 in 2010. All three are also members of the New Democrat Coalition, a 50-strong group that claims to represent moderates — but the average “liberal” rating of New Democrat leaders, 79 percent, is above House Democrats’ overall liberal rating of 77 percent.

It was a timely reminder that there really is no such thing anymore as a moderate Democrat. The handful of centrists in office have ceased to play a meaningful role in the party, much as moderates long ago ceased to influence the Republican Party.

The Democratic Leadership Council, the idea factory behind Bill Clinton’s rise, closed four years ago. The likely 2016 Democratic presidential nominee, Hillary Clinton, joined populist insurgent Bernie Sanders in opposing a Pacific trade deal dear to the New Democrats. Only 28 House Democrats — 15 percent — voted to give President Obama fast-track trade authority for the Trans-Pacific Partnership. Two decades ago, 40 percent of House Democrats were free-traders.

The feeble anti-Pelosi protest on the House floor came a day after Third Way, a vestige of the New Democratic movement, tried to pick a fight with the ascendant populists. It issued a report citing a rift between the “two wings” of the party, in which the populists are wasting their time focusing on wealth distribution rather than growth.

“With a singular focus on income inequality, the left’s main solutions are greater re-distribution and a re-writing of the rules to ‘un-rig’ the system,” the report said. But some of these ideas “would actually make the task of increasing shared prosperity significantly harder.”

It was a good effort, but Third Way came up short. First, there really aren’t two wings of the party anymore; the pro-business Democrats have lost. “There’s zero question,” Jonathan Cowan, president of Third Way, acknowledged in an interview Tuesday, “that the party is now a populist party.”

It’s also dubious to say, as Third Way does, that the elections of 2010, 2012 and 2014 were about Democratic populism; that theme has become prominent only recently. Also suspect is the Third Way argument, often heard from corporate interests, that reducing inequality could hurt growth. Plenty of evidence says otherwise.

Back in the 1990s, I called the pro-business policies of New Democrats the “best hope for the left’s future.” But much has happened since then. Increased polarization has wiped out moderates in both parties. And inequality — despite what Third Way says — is much more of a problem.

The group argues that the income share of the top 1 percent actually has declined slightly since 2000. Rather than tackle inequality directly, the group floats policies — pre-K education, infrastructure spending and the like — to spur the middle class.

But there’s really no dispute that the top 1 percent’s share of income has doubled or more over 35 years.

At one point, the Third Way report argues that “income disparity also doesn’t necessarily correlate with stagnating middle-class wages.” But that, the populists say, is all the more reason to do something about income distribution. “The trade-off many argue — to tackle inequality necessarily weakens growth — simply isn’t there,” said Mike Konczal of the liberal Roosevelt Institute. This, he said, justifies “bolder” policies: higher taxes on the wealthy, more restraints on big banks and executives, campaign-finance reform and more rights for workers.

Against these proposals, it’s easy to see why the New Democrats are losing ground. “While income inequality may offend our sense of justice,” the centrist Third Way argued, “its actual impact on the middle class may be small.”

I doubt it’s small. But even if it is: If America’s yawning gap between the super-rich and everybody else offends our sense of justice, isn’t that reason enough to do something about it?

Dana Milbank is a Washington Post columnist.