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In very liberal Marin County (Clinton 77.3 percent, Trump 15.5 percent, median household income $100,310), elected officials of at least seven local municipalities have voted to oppose the legislation.

Jonathan Chait, writing in New York Magazine on Wednesday, pointed out that the housing issue in California and elsewhere,

is ultimately a question of whether the most prosperous parts of blue America can be opened up to new entrants, or whether they will remain closed off and increasingly unaffordable. It is also a political test for whether progressives will be manipulated by knee-jerk suspicions, or be able to think clearly about using the market to serve human needs.

After overwhelmingly Democratic City Councils along the California coast voted to oppose the legislation, the Democratic State Senate answered Chaits question and killed the bill.

The maneuvers in California are a reflection of a larger problem for Democrats: their inability to reconcile the conflicts inherent in the partys economic and racial bifurcation.

Dani Rodrik, an economist at Harvard, addressed the Democrats dilemma in a recent essay for Project Syndicate:

In principle, greater inequality produces a demand for more redistribution. Democratic politicians should respond by imposing higher taxes on the wealthy and spending the proceeds on the less well off.

In practice, Rodrik writes

democracies have moved in the opposite direction. The progressivity of income taxes has decreased, reliance on regressive consumption taxes has increased, and the taxation of capital has followed a global race to the bottom. Instead of boosting infrastructure investment, governments have pursued austerity policies that are particularly harmful to low-skill workers. Big banks and corporations have been bailed out, but households have not. In the United States, the minimum wage has not been adjusted sufficiently, allowing it to erode in real terms.

Why?

Rodrik cites the work of the French economist Thomas Piketty, who argues that political parties on the left have been taken over, here and in Europe, by the well-educated elite what Piketty calls the Brahmin Left. The Brahmin Left, writes Rodrik,

is not friendly to redistribution, because it believes in meritocracy a world in which effort gets rewarded and low incomes are more likely to be the result of insufficient effort than poor luck.

Michael Lind, a professor of public policy at the University of Texas in Austin, wrote in a prescient 2014 essay, The Coming Realignment: Cities, Class, and Ideology After Social Conservatism, that high-density downtowns and suburban villages are coming to have an hourglass-shaped social structure.

Wealthy individuals are at the top, according to Lind, with a large luxury-service proletariat at the bottom. Democrats, in this scheme, have become the party of

the downtown and edge city elites and their supporting staff of disproportionately foreign-born, low-wage service workers.

Linds point raises a fundamental question for the Democratic Party: Can it find a way to hold its hourglass-shaped political coalition together?

Lee Drutman, a senior fellow at the New America Foundation, predicted the potential political developments of this situation in an article in March 2016:

Over the next decade or so, the Republicans will split between their growing nationalist-populist wing and their business establishment wing, a split that the nationalist-populist wing will eventually win. The Democrats will face a similar split between the increasingly pro-corporate but socially liberal Clinton wing and a more economically progressive Sanders wing, a split that the Clinton wing will eventually win.

The outcome?

The Democrats will become the party of urban cosmopolitan business liberalism, and the Republicans will become the party of suburban and rural nationalist populism.

Clearly, the 2016 election demonstrated the fragility of the Democratic coalition and its vulnerability to challenge from the populist right.

Dani Rodrik picks up this point in his Project Syndicate essay:

Why were democratic political systems not responsive early enough to the grievances that autocratic populists have successfully exploited inequality and economic anxiety, decline of perceived social status, the chasm between elites and ordinary citizens? Had political parties, particularly of the center left, pursued a bolder agenda, perhaps the rise of right-wing, nativist political movements might have been averted.

The forces behind the conversion of the Democratic Party into the party of urban cosmopolitan business liberalism, as described by Drutman, may be inexorable. If so, Rodriks call on the center-left to adopt a bolder agenda may be beyond reach.

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