April 20, 2021

The Democratic Party has always been a loose confederation of outsiders — poor farmers, union members, populists, European immigrants and southern segregationists. As the actor Will Rogers said in 1924: “I am not a member of any organised political party. I am a Democrat.” Yet despite being unwieldy, it was often effective, and usually beat the more homogeneous country-club-led Republicans.

Today, the Democratic Party seems more united, still glowing in the aftermath of the defeat of Trump. But that is just an illusion: Joe Biden’s first hundred days in office are almost up — and the internal conflicts of his party are bound to surface soon.

These divisions are not petty, or merely personal, but based on demands from a number of incompatible constituencies and ideologies. Take the Democrats’s newest supporters: America’s tech oligarchs, Wall Street financiers and urban real estate speculators. They may act “woke” on issues surrounding gender, race and the environment. But such “virtue signalling” is no substitute for the drastic policies pushed by the party’s Left: the confiscation of vast wealth, the break-up of monopolies and the introduction of ever-higher taxes. Big business, after all, is the clear winner in the status quo that the Left, with good reason, despises.

But the impending Democratic civil war is more than, as some conservatives see it, a two-dimensional conflict between “the establishment and the radicals”. Largely ignored in this narrative is the most unappreciated, least articulate yet arguably the largest Democrat-voting bloc: middle and working-class moderates who make up roughly 50% of the party. These voters may often favour populist economics, but remain threatened by the cultural, economic and environmental policies pushed by the other two factions.

All of which leaves Biden in an unenviable position: if he seeks to placate both the corporate woke and the activist Left, the Democrats could sever their last connections with the vast majority of the country, and allow the GOP, even in the wake of the Trump disaster, to recover political momentum.

For what it’s worth, Biden has often been associated with this largely neglected group of what might be called FDR Democrats. His reputation as a moderate “reasonable guy” helped secure the votes of older Democrats, Independents and African-Americans in the recent election. In the primaries, it gave him an edge over both the radical Sanders, whose program frightened many older voters, and the candidates of the corporate elite, notably the well-financed former Mayor of New York, Michael Bloomberg. These voters may be fading in the numbers, but still constitute up to 44% of the total electorate, easily the largest identifiable class constituency.

Certainly, parts of Biden’s program — expanding health coverage as well as investments in basic infrastructure and manufacturing — could appeal to these voters, who are now generally supportive of an activist government. But Biden has also backed measures on cultural and environmental issues that are unlikely to win over the traditional working and middle classes. For example, fracking bans, already endorsed by Vice President Harris, could, according to the US Chamber of Commerce, cost 14 million jobs, far more than the eight million lost in the Great Recession.

Belying his regular guy image, Biden has also expressed support for programmes that would force suburban areas to densify. It is likely few suburbanites, the majority of all Americans, would welcome federal overseers deciding how their communities should be changed. Meanwhile, attempts to force residents out of their cars and into transit, something they were abandoning well before Covid, seems quixotic as well as politically stupid. The President’s Transportation Secretary has even suggested a tax on “vehicle miles” travelled, a measure almost calculated to alienate middle and working-class families outside a few dense urban cores.

And then there’s the Biden cultural agenda, built largely around critical race theory. It would, in effect, force the majority of Americans, particularly Asians, to accept permanent race discrimination in terms of access to jobs, college educations and entrance to competitive high schools. Moreover, its timing could hardly be worse: it galls many to see, amid a pandemic and deep recession, a sudden huge surge of refugees at the border. Even Hispanics in some border states, whose politics tend align with grassroots working-class interests, see this new wave of immigration as a direct threat to their constituents’s  personal and economic safety.

How did their interests fall so out of favour? Well, their waning influence is principally the result of a merging of wealth and corporate power in Democrat politics that has been building for at least fifteen years, blossoming richly under President Obama. Both Biden’s primary campaign last year and his election victory were financed largely by big Wall Street firms, tech oligarchies, the mainstream media and other wealthy elites. Vice President Harris, in particular, is close to America’s new oligarchy, notably Facebook, while National Security Advisor Jake Sullivan has close ties to Microsoft.

Biden has already delivered on one of tech’s biggest concerns: the restoration of HIB tech workers — essentially, relatively cheap short-time servants from Asia. The Bay Area economy, for example, depends on for as much as 40% of its workforce from non-citizens. It’s no surprise that the travel ban and Trump’s often crude policies on immigration helped transform Silicon Valley  into a virtually one-party state .

But this corporate Leftism extends well beyond Silicon Valley. Where the Democrats once ruled mining and manufacturing towns; today they represent 41 of the 50 wealthiest Congressional districts. Wall Street and the tech oligarchy can afford not to see Biden’s “green agenda” as raising living costs or threatening jobs. Instead, Valley oligarchs and Wall Street financiers salivate over the potential killing to be made from subsidies for their renewable fuels investments and electric car schemes, as the radical filmmaker Michael Moore, among others, has documented. The green economy has already spawned its first mega-billionaire, Elon Musk, whose core businesses feed largely on regulatory and tax policies that favour his products.

All of which grates somewhat with the third Democrat faction: the illiberal neo-socialist Left. People like Bernie Sanders and Alexandria Ocasio Cortez rail against the extreme inequality associated with Silicon Valley and Wall Street. AOC has even suggested a country that “allows billionaires to exist” is immoral.

But while this inevitable conflict is yet to achieve centre-stage in Washington, it is surely only a matter of time before it erupts. Already in Seattle, local progressives have been feuding with Amazon, the city’s mega-employer whose founder, Jeff Bezos, is a Democratic ideological enforcer (through control of the Washington Post and the book industry) and donor to Biden. Meanwhile, San Francisco has also passed legislation to confiscate some of the wealth of its huge tech elite.

Ultimately, it won’t be easy for Democrats to accommodate both the world’s most avaricious capitalists and grassroots radicals. These agenda-setting Leftists are openly hostile to free enterprise system. Indeed, the recent bitter fight in Nevada, where insurgent socialists won all five party leadership positions in the local party, will likely be replicated around the country.

In contrast, the GOP, once the country-club party, does not ignore the sentiments of the unwashed —  white working class voters, small business owners and, to a surprising degree, minorities such as Latinos, whose economic interests, aspirations and social views are often at odds with the Democrat’s new “progressive” agenda. Today, you often hear more interesting social democratic ideas about boosting the middle class and curbing the oligarchy  from the conservative intelligentsia and GOP Senators like Florida’s Marco Rubio.

Yes, these proposals are often detested by libertarians and the last vestiges of traditional corporate conservatism, but there’s not much clamour in the electorate for a return for the Bushes or Mitt Romney. The populist wing of the Right has identified patriotism, homeownership, small business and upward mobility at its core — ideas which are largely ignored or even demonised by the Democrats’ dominant factions.

As their traditional constituency shifts, Democrats will struggle to maintain their odd coupling of the woke and the ultra-rich. They could try to square the circle by devising a more regulated economy that would curb competition — always manna for the monopolists — while dishing out more welfare and subsidies to allay the potentially disruptive masses.

But this trick, particularly as the bond markets and foreign investors begin to recoil from massive deficits, may ignite a battle over raising taxes, which would force the party to go after the tech monopolies, who historically pay little. It could also force them to increase levies on its cadre of educated upper-class adherents.

In the meantime, however, the contradictions between socialism and even woke capitalism may prove too massive to reconcile. It seems certain that far-Left candidates will continue to challenge and replace old FDR-style Democrats, particularly in big cities like New York, Chicago, Los Angeles, San Francisco, St. Louis and Seattle.

Growing pressure from the Left, and also from the financial markets, could undermine Biden’s brief kumbaya moment, forcing him to choose between the interests of his elite and grassroots supporters. A Democratic Civil War seems inevitable — and in such a scenario, the winner will only be the Republicans.