Democratic "Upstairs-Downstairs" Coalition at Risk


Michael Bloomberg's passing from New York City Hall, and his likely replacement as mayor by a fire-breathing populist Democrat, Bill de Blasio, marks a historic shift, not just in urban politics but, potentially, also national politics. For 20 years, under first Rudy Giuliani and then Bloomberg, New Yorkers accepted a form of “trickle down economics” where Wall Street riches flowed into city coffers and kept Gotham, at least on the surface, humming and solvent.

That period ended with Tuesday's election, and with it, the unraveling of one of the great contradictions in modern American politics: the melding of liberalism with a plutocratic elite. Bloomberg epitomized this synthesis, and with his departure, the formula of blending social and “luxury city” liberalism now appears to have run its course. Bloomberg himself appears to have realized the jig could be up, last weekend accusing de Blasio of running a racist campaign based on “class warfare.”

But for the American Left, now emerging from its Obamian slumbers, de Blasio's focus on class has also turned him into a national hero. The Nation hails de Blasio as the harbinger of “the rebirth of economic liberalism.” He has won the backing of the magazine's influential publisher, Katrina van den Heuvel, as well maverick plutocrat-progressive George Soros and former Vermont Gov. Howard Dean.

To be sure, class warfare has made de Blasio. His plans to raise more taxes from the rich appeals both to the middle class and, more importantly, to the poor and near poor. Those last two groups account for nearly half the “luxury city's” population. The same middle class New Yorkers who may have voted for a hard-edged Republican, like Giuliani, or a pragmatic billionaire, like Bloomberg, when they feared for their lives and simply wanted the city cleaned up. They now are more concerned with economic issues. De Blasio was the one New York politician to understand the sea change.

“This election is not going to be about crime, as some previous elections were,” de Blasio told National Journal last month. “It used to be, in New York you worried about getting mugged. But today's mugging is economic. Can you afford your rent?”

His argument is sticking, in large part, because perhaps nowhere are the limitations of gentry urbanism so obvious as in New York. The wealth of Wall Street, protected by the tax code and bathed in Bernanke bucks, has expanded inequality. As Wall Streeters have partied, most New Yorkers have not done well. Indeed, according to a recent study by University of Washington demographer Richard Morrill, the once-proudly egalitarian city has become the most unequal big city in the country, worse even than the most racially divided, historically underdeveloped Southeast.

Here are the facts. In New York, the top 1 percent earns roughly twice as much of the local GDP than is earned in the rest of country. Yet, controlling for costs, the average paycheck is among the lowest in the nation's 51 largest metro areas, behind not only San Jose, but Houston, Raleigh, N.C., and a host of less-celebrated burgs. There's only so much middle-class families can do when the cost of living in Manhattan is twice the national average, and the median Manhattan apartment price about $4,000 a month. These economic facts, not crime or mayhem in the streets, explains why, since 2000, the region has lost the most net domestic migrants – some 1.9 million – in the country, sending along $50 billion elsewhere, almost $15 billion in household income just to Florida, the most common destination.

National leftward shift

The de Blasio triumph is not solely a New York story. Nationally, this opens a new chapter in the evolution of the American Left. If de Blasio continues his surge and becomes the first openly leftist New York mayor in a generation, the pressure to shift Democratic Party politics to the left could become as inexorable as the Tea Party's shove to the right has been for the Republicans.

Like the Republican schism, about which much has been written, the reason for the Democratic lurch to the left is grounded in class realities. In the GOP case, the Tea Party derives support from largely unconnected middle- and working-class Republicans, as opposed to country club or corporate types. For its part, the modern Democratic Party fuses two dissimilar groups: the “upstairs” well-educated gentry, with their urbanist and green politics, and the broader, but less-influential “downstairs” working-class element, concerned about jobs, making more money and likely aspiring to own a home in the suburbs.

Now that they don't have to toe the line for another Obama presidential run, leftist Democrats, including what's left of the labor movement, are less compelled to defend his economic record. Under the current administration, already-troublesome income inequality in the country has been accelerating, to the benefit primarily of the vilified 1 percent. Race, which has served as a rallying cry for both white liberal and minority Democratic voters, likely will lose some of its appeal now that the first African-American president will not appear on the ballot.

Conflicts loom

This conflict between populist and gentry factions figures to arise over a host of issues in months to come. One looming issue may be the Keystone XL pipeline, favored by most private-sector unions, but vehemently opposed by greens and their gentry allies. President Obama may find that parts of his party, particularly in the inland West, the Great Plains, Louisiana and Appalachia, care more about jobs than environmental purity.

Another flash point may emerge over who Obama will choose as head of the Federal Reserve. Wall Street favors Larry Summers, a convenient ally to Obama, whose relations with high finance are complicated by his occasional flights of populist fancy. But, big-business ties and Summers' role in deregulation during the Clinton era arouse suspicion among more hard-left Congress members; already three left-leaning Democratic senators – Jeff Merkley of Oregon, Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts – appear to oppose a Summers nomination.

Expect more of this in the future. Some labor unions, including the powerful Teamsters and UNITE, now fear their health care coverage could be sacrificed under Obamacare. The most powerful force in urban Democratic politics, public employees, fear they may be caught between efforts, most notably in Detroit and, possibly, the president's adopted hometown, Chicago, to revive cities by ransacking their pensions. This may occur even as powerful real estate and corporate interests – primary funders of gentry urbanism – win subsidies from taxpayers for their ambitious plans.

These contradictions within the Democrats' unwieldy “upstairs-downstairs” coalition have been papered over for years by focusing on social and racial issues. They were often aided by Republicans, seemingly always looking for ways to alienate persuadable voters. Democrats, like de Blasio, may find that waging class warfare returns more than running on troublesome issues like climate change, guns, hygienic fascism (a Bloomberg specialty) or abortion; in some surveys, a majority of Americans favor some form of redistribution of wealth.

Unless there is a change in the country's economic direction, growing inequality could undermine the unnatural marriage of the gentry and the Left. In retrospect, the real political genius of Barack Obama has been to keep this contradictory coalition intact through his image, mastery of media and rhetoric. But, as the post-Bloomberg reality in New York suggests, at some point even the most agile politician can not keep fundamental social conflict swept under the rug forever.

Joel Kotkin is executive editor of and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

This piece originally appeared at The Orange County Register.

Photo courtesy of Bill de Blasio.