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The rich strike back
By BEN WHITE and MAGGIE HABERMAN | Politico
3/18/14 4:59 AM EDT

NEW YORK — Just a few months ago, it looked like 2014 would be the year of the populist, with Democrats running on economic inequality, tea party Republicans bashing banks and newly minted New York City Mayor Bill de Blasio pledging to soak the rich with higher taxes.

That was so January. The terrain is now shifting fast as the 1 percent fights back hard and the effectiveness of the populist approach comes into question.

And...

The Democratic power elite now believe that appeals to raise the minimum wage and extend unemployment insurance are not enough to overcome Obama’s deep unpopularity and frustration with the president’s signature health care law. They fear that unless Democrats shift footing to a more hopeful, growth-based message, the party could lose the Senate and drop double-digit seats in the House.

“Reducing inequality is good, but it’s 50 times better to do it by lifting those up who are low than by tearing those down who are high,” said Larry Summers, the former treasury secretary whose bid to become Fed chair got derailed by the more liberal wing of the Democratic Party. “The politics of envy are the wrong politics in America. The better politics are the politics of inclusion where everyone shares in economic growth.”

Democratic Rep. Jim Himes, whose Connecticut district includes many wealthy Wall Street executives, said the populism associated with de Blasio and Massachusetts Democratic Sen. Elizabeth Warren was never as dominant as the media suggested. “All too often people forget that this is just one politician from Massachusetts and one from New York City and what they say is not going to dominate politics in Arkansas, or Florida or Texas or anywhere else,” Himes said. “Income distribution may be far from ideal, but people don’t necessarily only want to hear about increased taxes on the wealthy.”

Wall Street Democrats believe Obama is fundamentally sympathetic to that argument. “The energy in the party may be with progressives, but Obama is still the same cool, pragmatic guy he’s always been,” said a Wall Streeter who attended the recent fundraiser with the president at Blackstone Group President Tony James’s Manhattan home. “He’s got liberal values, but he’d always like to cut a deal.”

More: http://www.politico.com/story/2014/03/the-rich-strike-back-104753.html