Elizabeth Warren Is Right About the Democrats’ Big Problem

Elizabeth Warren gave an excellent speech January 12 (text; video) urging Democrats not to “to sand down our edges to avoid offending anyone, especially the rich and powerful who might finance our candidates…. When Democrats water down their economic platform to appeal to wealthy donors, whether the transaction is explicit or subtle, we squander trust with working people, and the money just isn’t worth it.”

The Atlantic’s Jonathan Chait disagrees. “The Democratic Party,” he wrote three days later, “is completely unified on the merits of raising taxes on the rich and spending more on benefits for the poor and middle class.” That’s not true. Chait also wrote that it was “revealing” that Warren “did not cite any Democrat who holds this supposedly influential belief.” That’s not true either. Warren cited Kamala Harris and former Senator Kyrsten Sinema. There are also many others, whom I’ll discuss in a moment.

Before proceeding, let me disclose that Chait and I are friendly acquaintances and that our views are sufficiently similar that in 2011 he successfully recommended me to succeed him as this magazine’s TRB columnist. (A baby tech tycoon bought the magazine the following year, fired me, then later fired himself by selling the magazine to its present owner.) There is, however, some disagreement between Chait and myself about how far left the Democrats should go on economic policy—he’s more cautious than I am—and we’ve aired that disagreement before.

Warren’s speech was refreshing not because it was original (others, including me, have made the same argument), but because it emanated from a politician. Warren relies on wealthy political donors just like other pols; between 2019 and 2024, when she ran for re-election, 42 percent of her campaign funds came from large donors. She even accepted Super PAC money in her 2020 presidential campaign. But Warren has consistently criticized the role big money plays in politics, and now she’s criticizing it not only for advancing extremism among Republicans, but also for advancing excessive moderation among her fellow Democrats. To which I say: Bravo.

I don’t dispute that moderation is a virtue in politics, as it is most everyplace else. I agree with Chait, and with John Judis and Ruy Teixeira’s book Where Have All the Democrats Gone?, that the Brahmin Left’s cultural vocabulary (“genderqueer,” “intersectionality,” “Latinx,” and so on) is a political liability that’s best avoided. Democratic candidates ought to (and usually do) steer clear of anything that voters will hear as faculty-lounge virtue-signaling. Instead, they should preach a Rawlsian doctrine of mutual tolerance, though they shouldn’t call it that. If this be “moderation,” let’s have more of it.

But even moderation can be pursued immoderately, and that’s often the case when Democratic politicians address economic inequality. Polls show the public favors much bolder policies on government redistribution than most Democratic officeholders are willing to support. The working class strongly favors taxing the rich and empowering workers, and the haute bourgeoisie favors it even more. That’s a departure from the policies of the past half-century, but not from the hugely prosperous postwar era that preceded it, when the New Deal was in flower.

With regard to the latter, one might argue that advocating more aggressive redistribution is conservative. Brink Lindsey wittily observed 20 years ago (in The New Republic, no less) that “the rival ideologies of left and right are both pining for the ’50s. The only difference is that liberals want to work there, while conservatives want to go home there.” Indeed, fully 20 percent of working class voters who supported Trump favor a millionaire tax, an increase to the minimum wage, and higher spending on Social Security and public schools.

Chait writes that “the Democratic Party is completely unified on the merits of raising taxes on the rich and spending more on benefits for the poor and middle class.” I’ll agree that Democratic politicians pay lip service to these principles, and try to avoid positioning themselves too conspicuously against them. But these Democrats are also expert in watering down or sidelining redistributionist policies before they see the light of day, and sometimes after.

It was a Democratic Congress that rejected President Joe Biden’s modest proposed increase in the top marginal income-tax rate from 37 percent to 39.6 percent. It was a Democratic Congress that rejected Biden’s proposed increase in the hourly minimum wage from $7.25 to $15. It was a Democratic Congress that killed Biden’s attempt to eliminate the carried interest loophole.

It was a Democratic Congress that rejected Biden’s proposal to tax capital gains at the same rate as ordinary income. Instead, the Democratic House Ways and Means Committee scaled the proposed capital gains rate back from 39.6 percent to 25 percent. The Democratic Congress then scotched that, too, so the capital gains rate remains 21 percent. It was a Democratic Congress that rejected Biden’s proposal to raise the corporate tax to 28 percent after the Ways and Means Committee scaled that back to 26.5 percent. The corporate tax rate therefore remains 21 percent.

A Martian visiting Planet Earth might conclude that no pressure group exerts greater influence over Democrats than dead rich people, even though cadavers seldom vote. The Ways and Means Committee killed outright a long-overdue Biden proposal to eliminate the “angel of death loophole” shielding estates from paying capital gains tax at death (Biden had exempted the first $1 million in capital gains). Biden also tried and failed to get a Democratic Congress to lower the estate-tax exemption from $11 million to $3.5 million. Former Democratic Senators Max Baucus of Montana and Heidi Heitcamp of North Dakota publicly opposed this last, and 13 rural House Democrats lined up with them.

Granted, Biden enjoyed only a narrow majority in the Senate, allowing two pro-business conservatives within the Democratic caucus, Sinema and West Virginia Democrat Joe Manchin—both of whom eventually quit the Democratic Party—to veto much of Biden’s redistributionist agenda. But Sinema and Manchin didn’t sit on the House Ways and Means Committee, nor were they among the rural House Democrats mentioned above. Let’s name them: Reps. Cindy Axne, Jim Costa, Cheri Bustos, Josh Harder, Salud Carbajal, Angie Craig, Antonio Delgado, Kim Schrier, John Garamendi, Julia Brownley, Tom O’Halleran, Abigail D. Spanberger, and Kurt Schrader.

Democratic Senator Mark Kelly joined Sinema and Manchin to oppose Biden’s appointment of David Weil as Biden’s Labor Department wage and hour commissioner. As I explained at the time, Weil was judged too left-wing based on his (greatly exaggerated) views on liberalizing wage/hour regulations to crack down on corporate evasions. Just this past week a handful of Republican opponents managed to kill three proposed conservative wage/hour bills intended to create more opportunities for corporate evasions. I’m inclined to scoff at any notion that Republicans will someday steal labor issues from Democrats, but, putting this week’s events together with the House’s passage last month of a bill restoring collective-bargaining rights to federal employees, I feel less certain about that.

Warren mentioned in her speech that LinkedIn co-founder Reid Hoffman, who donated $7 million to Kamala Harris’s presidential campaign, tried to persuade Harris to pledge that if elected she’d fire the antitrust champion Lina Khan as chair of the Federal Trade Commission. Harris did not make that pledge, but, as Warren pointed out, Harris didn’t pledge to keep Khan, either. Warren might further have noted that Harris positioned herself to Biden’s right on taxes, proposing a capital gains hike to 28 percent rather than 39.5 percent. “Kamala Harris is listening to business people and getting their feedback on what’s fair and what will lead to more investment in business,” Harris’s billionaire adviser Mark Cuban crowed at the time. Nobody in his right mind believes that if Harris had only lowered her proposed cap gains hike to 25 percent she would have won the election.

These are all examples of Democrats watering down their economic platform to appeal to wealthy donors. Maybe Chait thinks such watering-down appeals to voters as well as donors, but that’s not what he said, and anyway polling contradicts that. On the merits, I would guess Chait favored every Democrat-defeated Biden proposal that I’ve mentioned here, so why does he dispute Warren? The tyranny over Democrats of the donor class is a very real problem. We all need to take it seriously.