Capitalisn’t: How the Democrats Lost Labor and Found Capital

David Sirota: I talked to a senator recently who put it this way: “Listen, if I want to put forward a bill dealing with economic inequality, the working class and the like, all those special interests who want to stop what I want to do, all they have to do is jingle their pocket, a.k.a., remind everyone that they have lots of money, to make sure that other senators don’t come on board.”

Bethany: I’m Bethany McLean.

Phil Donahue: Did you ever have a moment of doubt about capitalism and whether greed’s a good idea?

Luigi: And I’m Luigi Zingales.

Bernie Sanders: We have socialism for the very rich, rugged individualism for the poor.

Bethany: And this is Capitalisn’t, a podcast about what is working in capitalism.

Milton Friedman: First of all, tell me, is there some society you know that doesn’t run on greed?

Luigi: And, most importantly, what isn’t.

Warren Buffett: We ought to do better by the people that get left behind. I don’t think we should kill the capitalist system in the process.

Bethany: Since the election, there’s been an endless shriek of “What went wrong?” coming from the Democrats. A sampling: that it was a backlash to wokeness; border-immigration policies; DEI; contests over transgender acceptance; a general sense of social disorder; that Democrats abandon the working class; that inflation is coming for incumbents globally, so just don’t overthink things; that the digital-media ecosystem advantaged the right wing; that Republicans have just proven more adept at communicating to 21st-century online followings. Everyone has a theory.

Luigi: It’s very important to understand what the right version is. In particular, it’s important to understand whether it’s true that Democrats have abandoned the working class and that, somehow, President Trump has been able to conquer it back.

Bethany: Luigi, you just found a paper written by a group at Columbia that may offer some clues. The goal of this paper was to disentangle what it calls demand factors—voters—from what it calls supply factors—politicians—in shaping political outcomes.

It tried to focus on this shift of blue-collar voters away from left-wing parties. The paper ultimately concluded that parties were more polarized on cultural issues compared to economic issues, and that was the main driver of this partisan realignment.

Luigi: The other thing that is interesting is one of the authors of the paper is Nicolas Longuet Marx, the great-great-grandnephew of Karl Marx.

Bethany: I did not know that. That is fascinating.

Luigi: What the paper tries to do, which I find very interesting, is try to understand to what extent the shift in various political positions of elected candidates is driven by voter demands, and to what extent it is driven by the platform chosen by the two major parties.

The part that I’m not completely convinced about in the paper is the fact that it takes this platform of the two parties, as exogenous. What I would have done, if I were them, would be to say there are two factors. One is you need to get votes, and the other is you need to get money.

You need to insist on certain characteristics of the voters in order to get votes. But if you distance yourself too much from the positions of those who have money, you don’t get to run a campaign.

My interpretation of these results is this movement of radicalization of the two parties on the ground of social issues is a compensation because they are so similar on some fundamental economic issues. It’s a bit like those fake fights in the World Wrestling Federation. You need to exaggerate the fight because, in fact, they are old friends.

The same is true, in my view, of the two parties. You radicalize, and you kill each other on issues of abortion, gay rights. Why? Because they don’t have monetary implications. On the issues where there are big monetary implications, we all agree.

Bethany: To explore this issue, we were thinking that the right person to have on the podcast is David Sirota, who has been writing that this is the Democratic Party’s core issue.

He’s written that the Democratic Party, basically, has a circle full of policies that its corporate and billionaire donors want or can accept. There’s another circle full of initiatives that voters want. During the campaign, the party typically issues stuff that working-class voters really want but that might anger donors profiting off the status quo: things like housing, healthcare, higher wages, and, as he put it, “other initiatives preventing corporations from grinding the nonrich into Soylent Green.”

He went on to say that the party often chooses to campaign on items that overlap in both circles. David has actually pointed out this, that “Biden himself told wealthy political donors, informing them that his potential reelection and, by extension, the Democratic Party in power will mean nothing will fundamentally change for them.”

In other words, I think Luigi, per your point, the schizophrenic nature of the Democratic Party is in attempting to appease its wealthy donors while failing to communicate properly to the working class that was once its base.

Luigi: Let’s bring in David, who is an award-winning journalist and Oscar-nominated writer who served as the presidential-campaign speechwriter for Bernie Sanders’s 2020 presidential campaign.

David founded The Lever, an investigative news outlet, in 2020. In 2022, he received an Academy Award nomination for the story for Netflix, Don’t Look Up.

Let me start with something that is at the same time very easy and very complicated. How does money work in policy? Does it really play such a big role? I have a colleague who says there is a lot of money on both sides, the money cancels out, and it doesn’t make a difference.

David Sirota: Well, first of all, if we accept the idea that the people who are giving money . . . then it would stand to reason that, at least, the people participating in that situation think they’re getting something out of it. The political policies that have come out of our government suggest that they are getting lots and lots of things.

Now, is it a one-to-one relationship? In some cases, it is. In lots of cases, it isn’t. When we look at political money, we have to ask, what are we describing as political money? Is it just campaign contributions, or is it contributions to Super PACs, additionally? Is it contributions to think tanks? Is it owning various media outlets?

I would argue that all of these things collude to surround the policymaking apparatus with a set of choices that are what the givers, the donors—the investors, really—want and to essentially exclude and ignore what the public may want.

I think what has been constructed through money is a system that makes sure that most, if not all, of the policy choices considered realistic, legitimate, inside the realm of possibility, enrich one or another form of political investor.

This is what creates the incoherence of the Democratic Party’s message. The Democratic Party is caught between trying to position itself as hearing and responding to what the public wants but also trying to deliver on what its donors want.

There’s a very small set of issues on which the donors can accept what the public actually wants. They tend to be social issues, identity-politics issues, and the like, issues where, essentially, the oligarchy doesn’t have a financial stake in those issues.

But once it comes to economic issues where, in many cases, it’s a zero-sum game—billionaires can make this much money, or they can face a tax rate where they make a little less—you have to choose a side. That’s why Democrats often, to my mind, sound so incoherent.

Bethany: I was thinking about another category of money, and I’d love to hear your reaction to it, which is the money that hasn’t been spent yet, the hope of getting money. I think this might tie into your idea of the Democrats’ donor-appeasement strategy. It means that huge pots of money influence what politicians do in ways that can’t be tied to the money that’s already been spent.

David Sirota: I think there’s actually two pots of unspent money. There’s the threatening pot of unspent money, and then there’s the rewarding pot of unspent money.

I talked to a senator recently who put it this way: “Listen, if I want to put forward a bill dealing with economic inequality, the working class and the like, all those special interests who want to stop what I want to do, all they have to do is jingle their pocket, a.k.a., remind everyone that they have lots of money to make sure that other senators don’t come on board.”

What he’s really talking about is when these senators or congresspeople or governors are up for reelection, the thing they’re really afraid of is that a giant super PAC will intervene in their election to try to spend them into the ground.

We’ve seen that happen. We’ve seen the crypto industry, most recently, spend a ton of money in races across the country to try to punish those who criticize or are even just vaguely perceived to be an opponent of the crypto industry. That money has been spent, and that money is an investment in preventing those potential critics from getting reelected, but also to send a message to all future candidates and all current incumbents, “Hey, if you mess with us, we will come into your reelection race to try to stop you.” They don’t have to spend, the next time around, certain amounts of money because they’ve already sent the threat.

That’s the threatening form. The rewarding form is, obviously, the revolving door. If you serve big money in Congress, there is now an expectation that you will get a personal financial payout. We see that all the time. We’ve just seen it most recently with Joe Manchin and Kyrsten Sinema. They’ve both been essentially rewarded with big, presumably very lucrative jobs in the industries that were lobbying Congress when they were obstructing various pieces of legislation on behalf of those industries.

Bethany: Who do you blame for this, the donors or the politicians? Is it as simple as a matter of blame, or is it just in a system that is problematic, it’s impossible to single out who’s to blame?

David Sirota: I think they’re both to blame, but I would say this: there have been multiple times in the past where the people in power could have fixed this system, could have made money a little less dominant than it currently is, and they have said no.

What are some of those fixes? To my mind—and none of this is perfect—some of the fixes involve much better disclosure. The public has a very basic and robust right to know, at least, who is spending money.

More strongly, there hasn’t been a public-financing system of elections. To my mind, the lack of one is the central problem. We have a system in which, if you’re going to run competitively for office in the United States, you need to raise a significant amount of money to pay to communicate with voters.

A public-financing system would say, “Listen, if you do certain things, if you raise certain amounts of small dollars from not-huge donors, if you get enough signatures and the like, you get access to a pot of public money that doesn’t come with legislative strings attached.”

Various states and some cities have done this. Again, it’s not perfect, but we have not done this at the national level. Congress, a couple of times, has gotten pretty close to doing it, but it has never done it. At one point, they did it for presidential elections, but the pot of money wasn’t big enough, and essentially inflation harmed its efficacy. And there’s none at the congressional level.

We have baked into the system the idea that you have to go ask for larger and larger amounts of money from industries and oligarchs who want favors. Right now, we have the best government that those donors can buy.

I know the argument against public financing is, “Oh, why do we want to use taxpayer money to pay for politicians’ ads and pay for politicians’ campaigns?” I guess I get that argument. But if you’re not going to have that, what you’re going to end up having is a privately financed system that mostly serves the private financiers.

Luigi: My impression is that it’s actually even more sophisticated than that because a lot of the campaign by the Democrats is maneuvered by a bunch of consultants who are actually better off if the Democrats lose, but the donors keep giving the money, than if the Democrats win but without the money of the donors. Their role is really providing support in the name of the donors. If the donors go away, their job goes away.

A colleague told me the story that he was giving advice to the campaign of Kamala Harris. He suggested campaigning on abolishing noncompete clauses. As we know, Lina Kahn proposed this abolition by decree, and it was blocked by a judge, but this is not a constitutional issue. If Congress decides to abolish the noncompete, Congress has the power to do so. If it has the will to do so, it has the power to do so.

He gave this advice to one of these consultants. This consultant did a survey, and the survey suggested that, surprise, surprise, a lot of people are in favor of this idea. Not only generic Democrats, but also people on the margin. People might be more likely to vote for Kamala Harris if she were to campaign on the issue of abolishing noncompetes. That, by the way, would sound perfect with “Kamala for the people.” Did you ever seen this campaign promise coming out of Kamala Harris?

David Sirota: No. Right. Nope.

Bethany: Are you cynical enough to argue that the Democrats’ focus on a lot of social-justice issues is not necessarily because they believe it but is a giant . . . not necessarily a head fake but a form of camouflage to avoid the focus on the real issues? Not the real issues, that’s the wrong way of putting it, but to avoid focus on the economic issues?

David Sirota: I can put what both of you have just said into context. Yes, there is this idea that the consultant class is giving Democrats specific pieces of advice and guiding the party, effectively, toward certain issues and away from other issues, in part because the consultant class gets rich either way, whether the Democrats win or lose. A lot of consultants are doing simultaneous work with corporate clients and politicians, and they don’t necessarily want to anger their corporate clients.

But I would say this: I don’t think the typical Democratic consultant is trying to lose elections. To your question, Bethany, I don’t think the Democrats don’t believe in social issues. What I would say is the money incentivizes them to highlight, stress, and spotlight the issues that don’t offend capital, whether or not that means imperiling winning the election.

Bethany: Do you think that there’s any way to change this? You wrote: “The Democratic Party is terrible at most things. It’s very good at one thing, which is crushing dissent, crushing any push for change within its own midst.” Is there a way past this?

David Sirota: I think there is a way past this, although I’ve been saying that for a while. Maybe I’m just an eternal optimist.

I wrote a book in 2008 in which the basic premise was called The Uprising, that there’s this populist rage in the country. It’s going to go one way or the other. I had hoped at the time—now, it looks rather naive, but I had hoped, and I use the word “hope,” specifically—that the Obama campaign had seen its FDR moment.

Everyone forgets this. He campaigned on a really populist, progressive economic message, and he got elected with a huge mandate in the middle of, at least, this generation’s version of the Great Depression moment. In my view, he squandered that.

The Democratic Party, even with large congressional majorities, ended up passing a lot of giveaways to the banks. It essentially took hope and change, made it into more of the same, gutted financial regulation, allowed weak financial regulations, with 10 million people getting thrown out of their homes.

Guess what? A backlash happens. The Tea Party happens, setting the stage for Donald Trump, and here we are.

I say all that to say that we have been here before, and it has not gone well. My hope is that we are now living through a moment in which the Democratic Party is learning that this is not a sustainable path.

Now, the counterargument would be, it’s a sustainable path for the Democratic consulting class and the existing politicians who still are elected in the Democratic Party because they’re still there. They don’t really care.

But I do think we are potentially at a pivot point, and here’s why I say that. One, I actually do think that the Biden administration learned some lessons from the failures of the Obama administration. I actually think, on various economic issues, that the Biden administration was much better and had learned those lessons when it comes to antitrust enforcement, labor enforcement, the American Rescue Plan when you compare that to the stimulus during the financial crisis. This universe is better.

Now, obviously, I’m worried that Biden staying in the race when he shouldn’t have, Democrats losing, that will be weaponized by the corporate wing of the Democratic Party to say this shows the failure of Biden’s agenda. I think that’s misreading what actually happened. In reality, I think the political bungling in 2024 is astounding and horrifying and maddening to think about.

That’s one point of the policy realization. I think also, now, for the first time really in my lifetime that I can remember, you see polls showing that the base of the Democratic Party, the rank-and-file electorate of the Democratic Party, is enraged at its own leadership. That is very, very good. It is long overdue. It’s shocking how long it took to get here, but that foment is not sustainable for the current leadership of the Democratic Party.

The question is—and I don’t have an answer to this—does the existing Democratic establishment still have enough power to now crush down a widespread anger inside of the party?

You saw it crush the Bernie Sanders campaigns in 2016 and 2020. You’ve seen that establishment use lots of money to stop grassroots, populist primary challenges. You see, even this week, some voices, for instance, saying that some of these Midwest and so-called Rust Belt Democrats who are still winning the working class, that they should be primaried because they are saying that while Trump’s tariffs are bad, we should not say that our trade policy is good.

There’s a congressman from Pennsylvania, Chris Deluzio, a populist, progressive congressman from western Pennsylvania, who’s making this argument, and that has elicited people saying, “Oh, he’s a Trump appeaser. He’s trying to help the Republicans. We need to primary him.”

That is the Bush-Republican, corporate-country-club Republican wing of the Democratic Party trying to use Trump’s tariffs to say, “We’ve essentially got to purge the party of anybody who has any criticism of America’s NAFTA-style, corporate-written trade policy.”

This civil war is happening, and I don’t know yet which side is going to win, but I do know that that anger throughout the party at the leadership is a point of opportunity.

Luigi: It’s certainly a point of opportunity, but let me play the devil’s advocate for the sake of it. There is also a huge opportunity for the Democratic Party to move even more to the center to capture all the former Republicans who are disappointed with President Trump’s policies. Certainly, there are some votes, and there is a lot of money. How can you prevent this from happening, from your point of view?

David Sirota: It’s a good question. In 2024, the Democrats in various states tried to prioritize, for instance, campaigning with Liz Cheney. “Hey, we’re the normal party, we’re about democracy. We have to attract disaffected Republicans.”

The exit polls have shown us that that didn’t really work as a strategy in terms of moving over disaffected Republicans. That said, I think that was a more difficult tactic when Trump wasn’t the president. The argument was a little less salient.

I do think there’s a cadre in the party right now that is like: “Look, let’s just keep our heads down. Let’s move to the right when we can. Let’s not embrace any structural change in our economic message at all because all we’ve got to do is wait this out. There’s going to be a lot of destruction, and we can just campaign as the return to normalcy. We don’t actually have to change anything.”

I think that’s certainly possible, but I also think that in 2028, you’re going to have an open presidential primary, and a lot of people are going to run. A lot of people are going to try to create their own lanes. I think some of these candidates will try to take the lane of: “I am the establishment, I’m normal.”

That was what the Biden 2020 campaign was, right? “I’ll return everything to normalcy.” And they’ll have a lot of money. But let’s not forget, Bernie Sanders’s campaign in both 2016 and 2020 came pretty close to winning.

I’m not dissing Bernie. I worked for him in 2020. I worked for him 30 years ago. If a senator from Vermont who looks like Larry David, who is a self-identified socialist, can almost win the Democratic Party’s nomination without big donors and the like, imagine what somebody with a slightly different positioning but with the exact same message could potentially do.

My view is that the money guys in the Democratic Party know that. They must be like, “Wow, we got really lucky.” I use the historical analogy of Barry Goldwater. I am not comparing Bernie Sanders’s message with Barry Goldwater’s. Barry Goldwater’s is a genuinely extreme message. I don’t think Bernie Sanders had an extreme message, but the point is, an ideological, clear, principled message.

He actually wins the primary, loses in the general, but it took 16 years for a different kind of Barry Goldwater with more political assets to take Barry Goldwater’s campaign, essentially, and win the presidency.

My guess is that in 1964, people were eye rolling, right? There was talk about this being the end of the Republican Party. They’re never going to be a party again. That’s it. It’s over. They got destroyed. It was the biggest landslide in history.

Sixteen years later, you have Ronald Reagan. In one scenario—I’m not saying this is going to happen, I’m saying this is one scenario—Bernie Sanders is the Barry Goldwater figure of the center-left in America, of the Democratic Party. I’m not sure who the Reagan version of it is, but I certainly think it’s possible.

Bethany: Would it be enough? Say you had a candidate who came up with exactly the right slate of issues to address working-class woes but continued with the Democratic social platforms that we’ve seen. There’s some research suggesting that people do vote more on social platforms than they do on economic ones.

Even if these voters you’ve talked about, who left the Democratic Party, didn’t necessarily believe in the social platforms, were more conservative, but finally broke with the Democratic Party over their economic positions . . . but unfortunately, it doesn’t work in reverse. Just because, then, the Democratic Party gets back on board with the right economic platform, does that mean that those voters are willing to look past the social platform that they don’t agree with?

David Sirota: A lot of this is, essentially, where your focus is. You can be incidentally progressive on identity issues, social issues, but each politician, at some level, has a decision to make on how they define themselves.

Now, I say that with an asterisk because a lot of big money ends up defining politicians in ways that they don’t want to be defined. They’ve tried not to define themselves. This is what makes it difficult. What we’re really talking about is, can the Democratic Party change its brand orthodoxy to be known primarily—I want to underscore that, primarily—as the economic-populist party, as opposed to being known as primarily prioritizing social and cultural issues?

Luigi: Again, let me challenge what you’re saying a bit because if you go to Latin America, you find that it’s very difficult for moderate leftist or sane leftist candidates to win. You either have somebody that is really, really mainstream, or you have an extremist on the left.

My interpretation of it is that when there is a lot of money at stake, or in that case, particularly, the influence of United States at stake, et cetera, it is very difficult for you to be just a little bit away from where the money is. The reason why, paradoxically, it was easier for Bernie Sanders to succeed is because Bernie Sanders was so extreme that he could raise a lot of money from individual people.

The big obstacle, in my view, is that in the primaries, especially early on, you need to have broad support. Either you are a celebrity—you find Oprah Winfrey or some very popular person who is able to capture attention regardless—or you don’t survive the money primary. There would be a candidate, a moderate candidate—let’s say Pete Buttigieg—who is going to be so appealing to a lot of donors that he’s going to be irresistible to get the money of those donors.

Then, if you fight against Pete Buttigieg, you don’t fight by being a little bit more populist than Pete Buttigieg. You have to go all the way. But then, if you go all the way, especially in the second round, everybody’s going to pound you, and your chance of winning is going to be very limited. Do you see a way out of this?

David Sirota: Again, I don’t think about this in terms of being candidate-centric. I think about this in terms of what the candidates are campaigning on. This is maybe my most cynical view. I don’t really care, necessarily, what a particular candidate believes in their heart. Oh, what does he believe?

Pete Buttigieg is a good example. It’s very difficult to discern what Pete Buttigieg—and I’m not picking on him—actually believes. This is a guy who literally, as a kid, wrote an essay about how Bernie Sanders is the greatest politician in the world and then ran a primary saying that we can’t do Medicare for All. Bernie’s agenda is extreme. So, I have no idea.

What I care about with all of these politicians is, what incentives do they see? What formula for their own success and ambition do they see? What lane do they see in order to get elected, in order to remain in power? That will tell you what they will really be loyal to.

If Pete Buttigieg runs a super-populist campaign because he thinks that’s the way to win the Democratic primary and win the election, what that will reflect is that the work inside of the party and the society at large is interested in rewarding candidates who campaign on that kind of agenda, and then that politician who wins, in theory, can be held to that agenda.

Now, obviously, a politician can get elected . . . We went through Obama. He sold out, and to my mind, that destroyed the social contract. It created all sorts of backlash, and that was, frankly, a generational tragedy. It created all sorts of cynicism and disillusionment. But I think the best we can hope for is that the dynamics have changed where even the most mercenary politicians feel like they have to run on a working-class economic agenda and then deliver on that for their own success.

I’ll just leave you with an example on that. LBJ was an opponent of civil rights. Because the society had changed, because there was so much political organizing over so much time, LBJ felt he had to change on that issue. Not because he’s a good guy, in the goodness of his own heart. It’s because he was a consummate political operator and saw that he had to change his formula.

Bethany: I have a last question for you, David, which is going to sound like I’m delving into the details, except I think it does, in some ways, encapsulate some of what we’re talking about here, and that’s the topic of the day: tariffs. How do you see tariffs through the lens of what we’re discussing?

David Sirota: Oh, boy. When I worked on Capitol Hill for Bernie Sanders—this is now late ’90s, early 2000s—I spent a lot of time on the trade issue. This is when the China PNTR deal was moving through Congress. It was incredibly divisive.

I think that what’s gone on is really a tragedy. It’s an economic tragedy, the deindustrialization of the country, et cetera, et cetera.

Some of us who are that old have been saying for, really, decades at this point, if the Democratic Party doesn’t get right on this issue . . . certainly not doing what Trump is doing. I’ll get to that in a second. But if it becomes the party of pure so-called free trade, which is really corporate-written trade. It’s free trade for labor and environmental standards. It’s super-protectionist trade for IP and copyrights, et cetera, et cetera. If the Democratic Party doesn’t figure this out, there is going to be a simmering backlash that will ultimately explode.

Donald Trump, by the way, figured that out in 2016. He figured it out in the ’90s. He was flirting with running under Ross Perot’s party in 2000. This is actually something that Donald Trump has known about for a very long time.

I think what we’re experiencing now is the culmination of that 30-year backlash, in what I liken to a Jokerized version of what politics should be. In my view, Donald Trump’s tariffs are not strategic. They’re not really a trade policy. They’re a power grab.

They’re him trying to assert control over the economy to essentially get countries, corporations, to give him favors, do what he wants because they have to kiss the ring of the king. It is not a serious trade policy designed to rebuild manufacturing in this country.

I think that the timing of it actually gives away the game. If you’re serious about using tariffs, even across-the-board tariffs, one thing you probably want to do is say, “Listen, if we’re going to put across-the-board tariffs in place, we’re going to phase them in or create a timetable to put them in to give industries the chance to invest, to produce the things in this country that we say we want to be produced here.”

Waking up one day and deciding that today is liberation day and just throwing up tariffs without any timetable or any plan at all, not part of an industrial policy, again, this is destructive. I believe it’s going to harm the economy. I certainly don’t think it’s going to help the working class.

But I will just say this one last point. It is tapping into real, legitimate, and authentic anger at the deindustrialization policies of NAFTA, China PNTR, and the like. Democrats using this situation, the bad Trump tariffs, the reckless, out-of-control Trump tariffs, to say that we shouldn’t ever talk about tariffs, that free trade was good, NAFTA was great, China PNTR was great—my view is that that’s what Trump wants to happen, that this is part of a political trap that he wants to try to set to say, “Oh, I want the Democrats arguing that, essentially, hollowing out the entire industrial heartland was actually good.”

It’s obviously a perilous moment for the economy, and it’s a perilous moment for Trump because of what’s going on in the economy, but I also think there’s peril here for Democrats.

Luigi: I agree with what you’re saying, but I fear that this might actually benefit Trump politically. As you said, they might please an electoral base who is very resentful, and the more they see all the intellectual elites screaming murder because they’re losing their 401(k)s, they will say: “You know what? We don’t have a 401(k). We have lost everything. This is a revenge moment.” Do we really think that this is going to make President Trump less popular?

David Sirota: I agree that the stock market is not a comprehensive, real reflection of the real, lived economy, but I think there is something that is the macroeconomy and that if prices go up in a dramatic way, if people can’t afford things, if this tips us over into a recession or at least recession-like conditions, typically presidents, when they face re-election in those situations, they don’t electorally survive.

Now, there’s a whole question about whether Donald Trump’s just never going to have an election again. That’s a whole separate, other podcast.

I definitely agree with you that there is class-resentment politics going on here. I think the question—and I don’t have an answer for it—is how far do pure class-resentment politics go if the policy tool you’re using to try to inflame that ends up harming the macroeconomy that affects everybody?

Luigi: I would like to ask you a very difficult question. I don’t know the answer, but why is it much easier to do populist policy from the right than it is from the left? Imagine a scenario in which Kamala Harris was elected and did one-fifth of what Trump is doing now. I think we would have a revolt of the well-to-do class. While there are a lot of people who are upset, we don’t see that revolt. Why?

David Sirota: It’s a great question, and I saw somebody characterize the example you’re making, saying, “Listen, if Bernie Sanders had been elected president and did across-the-board tariffs, and the stock market tanked by 10 percent in 48 hours, there would be calls for a military coup.” They were joking, but not exactly joking, right?

It’s a great question, and I think that over decades and decades—really, almost a century at this point—this idea that to do anything populist from the left is essentially communism or socialism . . . It’s so many generations of linking the idea of left-of-center populism with communism, essentially.

When Bernie Sanders runs as a center-left politician—I wouldn’t even call his agenda leftist, but a center-left agenda—he’s billed as the next Castro, but Donald Trump does across-the-board tariffs, and it’s baked in. “Oh, well, he’s a business guy, right? I mean, he was a CEO. So, he still has the capitalist class’s desires in his mind.” It’s portrayed through big media as, well, it may be a little crazy, and it may be bad, and there may be some criticism of it, but it’s not Fidel Castro.

At this point, it’s a completely outdated frame. It’s a completely destructive frame because when you really think about this country’s history, when we really built things, when America really was great in terms of Make America Great Again, it was when we had probably the most left-of-center president that we’ve ever had doing a real populist agenda, the New Deal, Franklin Delano Roosevelt.

I do think there’s this part of the American psyche that has wiped that away from the memory in service of a right-wing narrative that says anything that’s left-of-center populism is communism.

Bethany: Well, thank you so much. This has been so interesting and fantastic, and it’s such a pleasure to get the chance to talk to you.

Luigi: Thank you very much. That was great.

David Sirota: Thank you. Thanks to both of you.

Luigi: The question I have, which I don’t know the answer to, is to what extent this is a bit of a self-serving argument that the left of the Democratic Party uses. If you are trying to push for your agenda, you always find that the time has come for your agenda to go through. To what extent is this true?

Now, there are some interesting factoids. For example, when you look at referenda, the referenda seem to indicate that people are much more leftist on economic issues. For example, the minimum-wage increase got approved in many places, even in places that are traditionally Republican. But I don’t know whether this can carry forward to say, imagine that tomorrow we have a novel, Bernie Sanders-type presidential candidate who will be able to win a national election.

Bethany: This is a journalist’s perspective, but when I think about the history of the last couple of decades and what I’ve seen, it seems to me that people want progressive economic policies in different ways.

There might be a strong movement behind a minimum wage. There might, at the same time, be a strong resistance to what people who want to be self-sufficient perceive as a giveaway, even if that giveaway would benefit them. Then there might be, after the fact, a love for said giveaway that means people don’t want to see it taken away.

There was the famous quote from a couple of campaigns ago, “Hands Off My Medicaid,” and the same thing with Obamacare. Now, for all its failings, people do not want to see it taken away, despite the fact that its passage was really contested and by some of the people for whom you would think it would help. I don’t know that economic policies always translate to the people they’re supposed to benefit in a way that is rational and logical.

Luigi: Let me rephrase slightly what you said, maybe in a more academic—

Bethany: Go for it.

Luigi: —form, which may be a bad form, but let me try. What I think you said is workers might respond a bit less to changes in policy in their favor than wealthier individuals.

Wealthy individuals know immediately whether their taxes went up, but a worker might not know whether there is a provision in the trade treaty that eventually will dispose of his or her job.

There is a problem of communication that, to some extent, we have seen with Biden’s policies. Whether you like the former president or not, he did choose a much more populist agenda for many issues. But this did not pay off in any way at the electoral booth.

You can argue that there is no constituency for that or that there is a constituency, but it was not properly communicated. But I tend to be allergic to people saying it’s all a communication problem because it’s an easy way to escape your responsibility to say, “Oh, I’m right, but I didn’t communicate properly.”

Bethany: Yeah, it’s not because workers are necessarily less sophisticated than the well-off. They might be more sophisticated, but it’s far more complicated for them.

In other words, the well-off get richer if the stock market goes up and if their taxes are lowered. The policies, at least in the short term, are a little more straightforward. For somebody in a blue-collar job whose job might be taken away by trade policy, that’s way more complicated to understand.

Even economists have shown . . . I love to attack economists, don’t I? Even economists have shown an inability to project exactly how those things are going to play out.

But what you said raises another question. He doesn’t say it’s simple, but if David were right, wouldn’t you have seen more appreciation for what Biden was trying to do? Or is it just that no matter what, cultural issues resonate more and strike to people’s guts more, somehow, than economic ones do, and economic policies were and always will be overshadowed by the cultural ones?

Luigi: I don’t think that economic policies are necessarily overshadowed by cultural ones. Remember, James Carville said, “It is the economy, stupid.” Economic issues are important, but they need to be—per your point, which was excellent—very salient. If they’re not salient, it’s much more difficult to recognize them.

I think that for all the work that was done at the Federal Trade Commission and the Department of Justice regarding antitrust, there wasn’t a lot to show people for their money’s worth.

One of the biggest initiatives, in my view, that Lina Khan undertook that would have directly affected people is this issue of noncompete agreements. For many of our listeners, you’re probably not aware that one in every five jobs in America has a restriction that if you leave the job, you can’t do a similar job in a nearby geographical area. We’re not talking only about super-sophisticated scientist jobs. Even if you work at McDonald’s, you can’t go and work at Wendy’s for a certain number of months or years, as if you are stealing such important trade secrets.

That issue, I think, would be an issue that captures people’s imagination, but her decree on the issue was blocked by a judge. People did not see the impact of that in real time.

Bethany: I think Sirota would agree with this: what the donor class did see and did not like were the impact of a couple of things that hurt them. You see the tech industry’s temper tantrum because they were being told they couldn’t make money in all the ways that they wanted to. The private-equity and hedge-fund and investor class was furious that her policies were, in their view, preventing mergers and acquisitions and preventing their buyout funds from being rescued by being able to sell a portfolio company to another company. That would be an echo or further evidence that Sirota’s point is right, because the donor class got mad.

Luigi: Where I’m not 100 percent convinced by David is how you get out of this.

Bethany: Yeah, well, I don’t think he’s 100 percent convinced either, by the way. I mean, I would have loved it if he had been able to offer a clear road map for how, at least, these issues become the issues that decide elections because they are the pivotal ones. I am not sure he sees the path out, either.

Luigi: His view is, if these are the issues on which people win and lose elections, everybody will conform. At some level, I agree. The question is, imagine that the new elections were tomorrow. Do you see the Democrats campaigning on a populist agenda, or do you see the Democrats campaigning on, we’re going to bring back the world of yesterday?

Bethany: Normalcy. They would not campaign on any progressive economic policy or any kind of change in policy. You can, I think, see some of that in the hue and cry over tariffs. There aren’t many pieces—maybe I’m missing them, and I haven’t read enough—that take a nuanced position on tariffs and that really try to take into account the fact that the Biden administration left the Trump administration’s first round of tariffs in place. That there are some tariffs might make sense in the context of a broader industrial policy, and that the Democrats’ rabid embrace of free trade over the last couple of decades did a lot of damage.

Instead, you just have people saying tariffs are bad, bad, bad, bad, bad, bad. I think some part of that, in fairness, is that there doesn’t seem to be much coherent strategy behind Trump’s tariffs, but I think some part of that also reflects a longing for a return to the way things were and an unwillingness or a lack of desire to try to confront a world that might be more complex than people once believed. In other words, it’s not just as simple as free trade is good. I do think that while tariffs are, in a way, a micro issue of what we’re talking about and very much in the headlines today, they’re also symbolic of this whole discussion.

Luigi: As David said, there is at least one Democrat, Chris Deluzio, who is trying to carve out a position that he doesn’t agree with the Trump administration, but not all tariffs are bad. But that’s a very difficult position to carve out in this moment. My limited understanding from social media, et cetera, is that Deluzio has been completely pounded from both the right and the left. It’s not a very pleasant position to be in.

Bethany: Yeah, I actually started to think about this. Even in the early days of the Biden administration, when the carried-interest tax was taken off the table, I thought, “Wait, who’s pulling the strings here?” I think that that is disturbing, to say the least.

Luigi: Yeah, and to be honest, so was any antitrust legislation. Remember, for two years, the Democrats controlled everything, and they promised us all sorts of change, but the only change we saw was in the administration of the FTC and the DOJ, but not in Congress. They were unable in Congress to pass any law on the issue.