No doubt Democrats are enjoying the GOP's agonizing moment of truth, but their party also faces a big strategic choice. Will Democrats wage the fall campaign as pro-growth progressives or as angry populists?
Trump's reckless caricature of the U.S. economy as a "disaster" gives Democrats a huge opening. They can offer anxious voters a hopeful counterpoint to Trump's fearful narrative -- a positive plan for parlaying our country's strengths in technological innovation and entrepreneurship into stronger economic growth that works for all Americans.
Contrast that with the economic "vision" Trump unveiled this week in Detroit
. His "America First" plan was an incoherent amalgam of bad ideas from across the political spectrum. Trump served up the red meat of protectionism for industrial workers, a new round of supply side tax cuts for mainstream conservatives, and the fantasy of a regulatory freeze for libertarians.
Like all of Trump's forays into policy, the speech was widely panned, including by conservative economists. It showed how little Trump appreciates the key role innovation plays in driving growth in today's knowledge economy, and how nostalgic he is for the factory economy of the 1970s.
Consider this: the digital sector -- broadband, mobile devices, social networks, online content providers -- is responsible for 45 percent of private sector growth since 2007 and virtually all the productivity gains, according to PPI research, and virtually all the productivity gains. Yet it didn't rate a mention in Trump's speech. As if stuck in an Archie Bunker time warp, he promised to bring home jobs from China and Mexico and restore America's old dominance in steel and autos. Soon we'll all be driving U.S.-made muscle cars again -- believe me!
Trump's retro vision of what makes America great -- namely, low-tech, middling skilled, labor-intensive manufacturing jobs that are highly vulnerable to automation -- is a major political liability. Yes, it taps into the gnawing sense of economic and cultural dispossession felt by many blue-collar workers.
But it doesn't speak to the aspirations of middle-class voters who now mostly work in offices, use digital technology to boost their productivity, and understand that their jobs depend both on keeping their skills up to date and on their companies' ability to succeed in global competition.
What Trump offers is mainly a fantasy of retribution against the "elites" who have supposedly wrecked the U.S. economy. In picking him as their standard bearer, Republicans have abandoned any pretense of being the party of economic competence and growth in this election.
This presents Democrats with a striking opportunity -- if they can resolve their own identity crisis. Are they a party of economic innovation and progress, or a party of economic reaction -- a left-wing version of Trump?
What not to do
Although Clinton staved off a surprisingly strong challenge from Sen. Bernie Sanders, she felt constrained enough to make significant concessions to her party's increasingly assertive populist wing. The big question now is whether this distinct social democratic tilt will prevent Democrats from taking full advantage of the GOP's blunder in making Trump their standard bearer.
The conventional view among party elites, echoed by political reporters, is that Clinton must keep railing against the "rigged game," free trade, Wall Street and other populist bogeymen, for two reasons. One is to prevent Trump from making deeper inroads among white, working-class voters in Midwestern swing states like Ohio and Wisconsin. The other is to keep Sanders' voters -- especially his young white supporters -- in the fold.
Such calculations, however, look back at primary and caucus voters rather than the national electorate candidates will face this fall. Trump's nativism and bigotry make him anathema to millennials, whose mantra is diversity and equality. True, there are still a hard core of "Bernie Bros" who despise Clinton as a corporate sell-out and warmonger. Some of them may opt for third-party candidates or stay home, but young voters' antipathy to Trump will be a strong motivator to turn out in the fall, however tepid their enthusiasm for Clinton.
Nor does it make much sense for Democrats to compete with Trump in pushing blue-collar America's hot buttons. In the first place, non-college-educated whites have been voting predominantly Republican for a generation, more on cultural than economic grounds. And nobody is going to "out-populist" Trump on trade, immigration, "law and order," hostility to Muslims, or the alleged incompetence and corruption of the nation's political class.
Targeting aspirational voters
Instead, Democrats should recalibrate their primary message to appeal to aspirational voters across the middle of the political spectrum -- independents, college-educated suburban moderates and a substantial slice of Republicans who can't abide Trump.
College-educated whites are a key target of opportunity for Democrats
. A strategy that exploits their doubts about Trump on economic, cultural and security grounds, combined with solid support from minorities and young voters, could open a broad road to a Democratic victory this fall. A business-bashing populism, on the other hand, would put Democrats on a narrower path to the White House, with a slimmer margin of error.
Given Trump's tumble in recent polls, Clinton could conceivably win either way (though no one is counting him out just yet). But she's not the only Democrat on the ballot this fall. After suffering calamitous routs in the last two mid-term elections, Democrats have a realistic shot at winning back the Senate and whittling down the GOP's 61-seat House majority
. To win in red states and competitive House districts, however, the party's candidates can't sound like Sanders.
According to a Progressive Policy Institute survey
, the swing voters who hold the balance of power in key battleground states aren't particularly angry and don't see the economy as rigged against them. They give priority to growth over fairness and are more inclined to help U.S. businesses succeed than punish them. While worried about jobs going overseas, they see trade on balance as good for America. And they don't have much confidence in the federal government, which they believe fails to reward people who work hard and play by the rules.
A savvy economic platform
To build a broad majority that can deliver victory up and down the ballot, Democrats should offer voters a progressive alternative to populism that puts economic innovation and growth front and center. They need a plan to attack today's popular discontents at their root -- by breaking our economy out of a slow-growth trap that's been holding down wages.
Although it's easier to blame trade or Wall Street or the 1 percent, slumping productivity growth is the real culprit behind the meager gains in wages and living standards Americans have experienced since 2000. Democrats need bigger ideas
for jolting the economy out of the doldrums.
These include major public and private investments in modern infrastructure; a strong push for advanced materials and 3D printing to keep America in the vanguard of advanced manufacturing; a strategy for digitizing the physical economy and accelerating the "Internet of Things"; pro-growth tax reform (including bringing business taxes down to globally competitive levels); a systematic lowering of regulatory barriers to innovation and startups; and, a robust system of career and technical education to equip workers without college degrees with skills and credentials valued by employers.
Trump's economic illiteracy gives Democrats a chance to own economic growth and opportunity. They'd be fools not to seize it.