As you know, we rarely discuss electoral politics here. Still, policy is downstream from politics and the question of where the Democrat Party goes from here is an important one.

There are, roughly speaking, three options.

The first is: steady as she goes. Trump won because of inflation, or because he's a nazi uniquely suited to exciting white troglodytes enough to get them to the polling station, or because of the weather. So the Democratic Party should retain its focus on racial grievance politics, extreme social positions, and quasi-socialist economics. This is the approach favored by "the groups," the activist bodies that very often bully Democratic officeholders into toeing the party line, but it would be a mistake to view it as a purely astro-turfed phenomenon. It is also an approach favored by a significant portion of the Democrat base, white women with graduate degrees, and also the racial component is arguably necessary to maintaining the Democrats' fractious coalition in one piece, according to what Robert Tracinski termed "the Southern strategy in reverse." In this telling, there are few things that unite African-American descendants of slaves, recent immigrants, sexual minorities, the very poor, women, and downwardly mobile cultural elites, except resentment against white men. Absent a once-in-a-generation political talent like Barack Obama, this theory goes, racially divisive rhetoric, and DEI understood as patronage, is simply necessary to make the electoral math work. It hasn't worked last year, but it worked in 2022, 2020, and 2018, and in 2016 it delivered a popular vote majority in spite of a historically-unpopular candidate. So there is both a strong argument and real structural factors in favor of staying the course.

Okay. The second option is the left-populist option. Call it the Bernie Option. This is as old as the Bernie campaign of 2015; arguably as old as Occupy Wall Street from 2008. According to this view, Democrats should de-emphasize race consciousness and social issues (although to what extent is never made clear, and whether this rhetorical modulation should be accompanied by actual policy shifts is even more mysterious) so as to unite the American working-class of all races under the banner of economic populism. More on this below.

The third option, the one we almost never see discussed, is the Clinton Option. As in Bill. And that one is simple: moderate. Just moderate. The Democrats should be more moderate on social issues, more moderate on racial issues, and more moderate on economics. There are many sub-rosa proponents of this view, but for some reason (and here we're willing to blame "the groups") they never come right out and say it, at least if they're not retired (hello James Carville). If we had to bet, we'd bet people like Pete Buttigieg and Jared Polis believe that.

If your correspondent was a consultant to the DNC (what a thought) he would have recommended the Clinton Option. The "steady as she goes" Option, as we say, has much to recommend it, but, frankly, it is too socially divisive for us to contemplate.

The reason we would not have liked the Bernie Option, apart from the merits, is that the American economy is simply no longer the economy of 2009 or even 2016. The Great Covid Tsunami Of Cash has created its own set of problems, and the imbalances created by open trade with adversaries and financialization are not to be ignored, as well as other problems such as housing access for young people (and related problems of family formation), but still, America today, on the whole, is a prosperous nation. It doesn't have the kind of mass unemployment, or mass proletarianization, that lends itself to successful economic-populist movements, at least not the kind that can win a majority, either in the popular vote or in the electoral college.

And yet…

And yet, Bernie Sanders has started a national tour to attack what he calls "oligarchy," a charge that has the potential to stick, between Elon Musk's very visible role in the Administration and rumors of Republicans planning to slash Medicaid to pay for tax cuts that are likely to have a regressive impact. All of these things can be defended on their merits, but together they paint a picture that is easy for Democrats to exploit.

As the ever-perceptive Matt Stoller notes of Sanders's tour: "something about this campaign is different. It’s not so much what Bernie is saying, it’s that he is doing it to overflow crowds in Nebraska and Iowa. And it’s not just event crowds, his videos are getting tens of millions of views, and his online campaign metrics are performing remarkably well. […] Sanders [seems] to have tapped into something. An argument about who holds power, a sense of broad popular rage at the perception that this country is now run by small group of billionaires and corporate elites. For the first time since November, parts of the public are listening to political arguments again."

Of course, it could just be a flash in the pan. Or it could be the start of something…

In any case, the future alignment of the Democratic Party matters to politics and policy, and what that will be remains very much up in the air. We rate the probability of a populist Dem realignment higher now than we did two weeks ago.

Policy News You Need To Know

#Trade — The White House's new EO on trade sets out the principle of reciprocity.

#Trade — President Trump's policy of tariff reciprocity, a much more moderate policy in practice than some of the noises he has made in recent months, and one sure to be highly popular with the public, is nevertheless bad, according to trade advocates. Here is Cato's Colin Grabow with the case against.

#Immigration — New EO targeting sanctuary cities and forbidding the provision of services to illegal aliens. Politico has more.

#Ed #DOGE — DOGE's cuts to Ed were particularly controversial, not just among the usual set, but also among right-of-center policy wonks. The main reason for this is that DOGE axed a bunch of studies which are useful for knowing where we are and what's going on with schools, which is surely a laudable, transpartisan goal. AEI's indispensable Rick Hess has a balanced writeup.

#Energy #Windmills — From the Rhodium Group: "In the final quarter of 2024, clean energy and transportation investment in the United States totaled $70 billion, reflecting a slight 1% decline from the previous quarter but a 6% increase from the same period in 2023." The Trump Administration is not keen on so-called clean energy, but it's not looking like a rout for the sector.

#Reg — CEI's "week in ridiculous regulations" always makes for fun reading.

#Chyna — RAND with some clear-eyed analysis about the true state of the Chinese economy: "Today, one hears two narratives about China's economy. One is about economic decline, and the other is about China's growing economic and technological power... Although these narratives appear contradictory, both are true."

#Journals — The excellent Charles Fain Lehman of the Manhattan Institute was just named senior editor at City Journal. Congratulations to him and to one of the best public policy journals in the nation!