What you missed in the Elizabeth Warren vs Third Way battle

In a strongly worded column in the Wall Street Journal this week, two members of the  think tank Third Way attacked Sen. Elizabeth Warren (D-Mass.), arguing that her muscular, bank-busting style of liberalism will alienate moderate voters from the Democratic Party in future elections. In 2008, Democrats won with "a vision of pragmatic progressive government, not fantasy-based blue-state populism," Third Way's Jon Cowan and Jim Kessler wrote, warning Democratic policymakers not to follow Warren "over the populist cliff."


Elizabeth Warren

From there, things got ugly. Lee Fang, writing in the Nation, examined Third Way's ties to Peck Madigan, a Wall Street lobbying firm. Other liberal groups responded angrily to the column, denouncing Third Way as a front for the banking industry.  Warren herself got involved on Wednesday, although she did not respond directly to Cowan and Kessler's column. Instead, she sent a letter to chief executive officers at six major financial institutions, calling on them to disclose their companies' spending on think tanks, although they are not legally required to do so.

"Shareholders have a right to know how corporate resources are spent, and, even more importantly, policymakers and the public should be aware of your contributions and evaluate the work of the think tanks accordingly," the letter read.

The controversy might seem to be of little concern to anyone outside a narrow circle of Democratic activists.

On the other hand, perhaps not. The column and the response to it do reveal an important division within the Democratic Party about what the goals of a progressive agenda should be. "As much as is written about the divide between tea party and establishment Republicans, the Democratic Party has its own ideological breach that the episode has brought to the fore," writes Politico's James Hohmann. Liberal Democrats are frustrated with the slow rate of change in economic conditions for ordinary Americans, and want more aggressive measures.(We wrote a few years back that Warren is the true liberal that Democratic activists thought they were getting when they elected President Obama in 2008.)

What's more, they've been gaining traction on proposals such as expanding social security and raising the minimum wage, as Zachary Goldfarb reports. Last month, unapologetically liberal Democrats won mayoral elections in Boston and New York. Perhaps the clearest example of the liberals' influence was President Obama's speech Wednesday on economic inequality, which emphasized the need for government involvement to provide equal opportunities.

As to whether tough talk about disparities in wealth is a losing strategy for Democrats next year and in future elections, as Cowan and Kessler claim, it's hard to know. The Progressive Change Campaign Committee commissioned Public Policy Polling to conduct surveys over the summer, and a majority of respondents supported an expansion of Social Security. (In some states in the survey, the majority was substantial, although in others, including Iowa, the majority was less than the margin of error. Also worth noting: PPP is a Democratic firm that conducts polling via automated calls.)

But make no mistake: the 2016 election could well be the place where this fight breaks into the open. Hillary Clinton, the clear favorite for the nomination, is far from a darling of liberals. And, while she is the favorite no matter who runs against her, it's not hard to imagine someone like Howard Dean or Russ Feingold challenging Clinton from her ideological left. As we have written, Warren would have the strongest case to make as the liberal alternative to Clinton, but she seems uninterested in running.

Max Ehrenfreund is a blogger on the Financial desk and writes for Know More and Wonkblog.
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Sean Sullivan · December 5, 2013