THE DEMOCRATIC PARTY AND THE “THIRD WAY”

 Harry Targ

Reclaiming our Progressive Political Heritage

Our task in 2026 is to continue to build a more progressive and humane society while pursuing a peace and solidarity agenda in the international system. A central element of this task is to continue mobilizing, educating and agitating for progressive reforms and opposing the threat to democracy and well-being by corrupt, repressive, and anti-democratic governments at the local, state, and federal levels.

Discussions about the pursuit of these tasks have been part of the political landscape at least since 2016. Many of these discussions revolve around assessments of the recent elections: contexts, organizing experiences, and outcomes. There has been discussion of tactics such as organizing grassroots groups, the internet, canvassing, and calling blitzes. And substantively debates abound about working within the Democratic Party and whether to address “socialism” or representing the “center.” . And there has been discussion of the critical nature of issues that need to be addressed: health care, climate change, racism and police violence, jobs, and, of course, militarism and wars. All of these conversations are useful and important as we strategize around elections in 2026 and 2028.

Historic Changes in the Democratic Party

What seems missing from these discussions on the election outcomes is an analysis that links history and political economy to the changes that have occurred in the Democratic Party from Keynesianism and the capital/labor compromise of the late 1940s to neoliberalism, reflected in the sector of the Democratic Party that gained dominance in the 1980s, sometimes referred to as “The Third Way.”

Looking at the twentieth century, Franklin Roosevelt’s presidential victory in 1932 and three subsequent victories presaged both a transformation of the Democratic Party and public policy from laissez faire to state-directed policies designed to address social safety needs (creating jobs, supporting farmers, investing in public works, and funding the arts (theater, murals, music, historical writing for example). It was assumed that fiscal stimuli, putting money in workers’ hands would jump start the economy. Fiscal stimuli were paralleled by increased government regulations of banking, labor/management relations, and wages and hours.

To be clear, the New Deal programs would not have occurred if millions of working-class men and women had not hit the streets to demand them. And, to be clear also, as much as the New Deal programs helped large sectors of the working class, workers of color were disgracefully excluded from many of them. But nevertheless, the thrust of public policy, mostly advocated by Democrats was for positive government.

The Democratic Party institutionalized the New Deal, the Fair Deal in the Truman years, and, in the 1960s, Great Society.

Most white workers, and increasingly Black workers, saw the Democratic Party as their home. From the 1930s until the 1980s, voter studies showed majorities of voters identified with the Democratic Party. And even mainstream Republicans, such as Dwight Eisenhower, embraced workers’ rights to form unions and Social Security.

However, the Democratic Party began its long decline in 1968, with candidate Richard Nixon’s appeal to “the silent majority” and his embrace of a “southern strategy.” Nixon played on growing frustration with Vietnam era protestors and the centrality of the civil rights campaigns in American life. George Wallace became a popular racist third-party candidate for president.

The last gasp of the New Deal/Fair Deal/Great Society tradition was reflected in the overwhelming defeat of populist presidential candidate George McGovern in 1972. Two years later, because of his criminality, President Nixon was forced out of office and his successor Gerald Ford lost the 1976 presidential election to Jimmy Carter.

These political eruptions occurred in a decade, the 1970s, when the United States was experiencing declining relative power in the world, both politically and economically. In addition, the contours of American politics were dramatically affected by the oil crises of the 1970s, the inability or refusal of government at all levels to continue to afford the supports that workers had come to expect, and the radical transformation of production, highlighted by millions of jobs lost through outsourcing and deindustrialization. The dramatic changes in the political economy of capitalism and the increased appeal of racism were reflected in a substantial change in the campaigns and policies of the Democratic Party

The Democratic Party and “The Third Way”

Jimmy Carter planted the seeds for the shift in the Democratic Party from New Deal liberalism to neoliberalism and the Party’s “Third Way.”  Michael Jordan Smith succinctly summarizes in a review of the theme of the recent book “Reaganland,” by author, Rick Perlstein. Smith’s review refers to the book’s main point that Perlstein refers to “the Democrats’ fatal abandonment of economic fairness in favor of balanced budgets, deregulation, and fiscal conservatism. Carter led and presided over this transition, over the objections of traditional liberals including Ted Kennedy and Tip O’Neill. But Carter joined with a revitalized business lobby, which gradually succeeded in persuading Democratic politicians that neoliberalism was the only way forward. To this day, the Democratic Party hasn’t fully recovered.” (Michael Jordan Smith, “When Conservatism Triumphed,” The Progressive, August 17, 2020)

President Reagan’s 1980 message, which resonated with a work force that was experiencing seven percent unemployment and double digit inflation, was “Government is not the solution. Government is the problem.” Armed with theories from conservative economists, Reagan expanded dramatically the policies initiated by President Carter. These included deregulation of the economy, lobbying for the privatization of public institutions, downsizing programs of welfare and safety nets.

To secure support for programs of austerity, Reagan began the process of destroying the influence of the labor movement, criminalizing the behavior of people of color, and shifting the discourse from poverty’s connection to economic failure to blaming the victims of poverty for their own misfortunes. And, in the main, the Democratic Party either only weakly opposed the Reagan austerity agenda or cautiously supported it. What would later be called the “neoliberal agenda” became the dominant ideological framework of discourse of conventional politics.

In 1985, Washington D. C. Democrats formed the Democratic Leadership Council (DLC). The Council articulated the view that the Democratic Party was losing its grip on public support because it was “too liberal.” It developed a “Third Way” agenda that was less committed to working people, was more hostile to people of color, shifted policy advocacy from providing social safety nets to expanding law enforcement, and was less vigorously supportive of government regulation. When Bill Clinton was elected president, he enshrined the neoliberal agenda in the program of the Democratic Party. Third Way Democrats no longer even pretended to represent the interests of working people in policy even though they continued to express empathy for the vast majority of people. 

One stark optic of this was reflected in a Frontline documentary on globalization which showed candidate Bill Clinton meeting steelworkers at a plant gate during a 1992 campaign stop. He promised them that he would serve their interests, particularly by opposing the controversial North America Free Trade Agreement (NAFTA). The next scene in the documentary shows Clinton meeting with financier Robert Rubin, getting schooled on the “realities” of the modern economy (PBS, Commanding Heights). Despite labor opposition to NAFTA, including progressives in the labor movements of Mexican and Canadian workers, Clinton leaned on Democrats in the House of Representatives to support it. Clinton’s aggressive support of NAFTA was metaphorically analogous to President Reagan’s firing of the PATCO workers in 1981 after they endorsed his candidacy for president.

Thus, the “Third Way” became a central feature of Democratic Party politics, with most Democratic Party candidates running on platforms of a kinder, gentler “Third Way” neoliberalism than their adversaries. But the reality is that the New Deal tradition of government serving the needs of the people, mostly the working class (as limited as it was) was seen by majorities of Americans as vital to their lives.

And today, Third Way Democrats continue to oppose the progressive New Deal tradition of their predecessors. As one of their spokespersons, James Carville has put it: “in this century, if it wouldn’t be for the Democratic left wing, we might not have even had a Republican president. We sure wouldn’t have had one in 2000. And we sure wouldn’t have had one in 2016.”(“Carville: Far-left Democrats ‘part of the problem’ within party”, Ashleigh Fields , The Hill- 07/13/26).

In sum, given the history of US politics and the Democratic Party, Carville and his Third Way allies are a significant part of the problem, not the solution.