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View from the US: The Rise of American Progressives

Erin Caddell of GK Strategy’s American partner Anchor Advisors examines the ideological battle reshaping the Democratic Party and what it could mean for investors, corporates and the future direction of US policy

Sir Isaac Newton’s Third Law of Motion, published in 1687, states that for every action there is an equal and opposite reaction. This centuries-old theorem may go some way toward explaining the ideological split currently occurring in the U.S. Democratic party – one that could carry significant importance for the congressional midterm elections in November 2026 and for U.S. policy for many years to come.

Republican President Donald Trump faces a difficult political backdrop approaching the midterms, often thought of as a referendum on the incumbent U.S. president’s first two years in office. Trump faces sagging approval ratings in his second term, with notable weakness on his handling of the economy due to rising inflation, as well as a Middle East war with no easy way out. As this column has noted before, Republicans are already defending one of the narrowest House majorities in American history (218-212, with four vacancies and one independent).

Given these dynamics, many Democratic leaders and pundits have suggested the party employ a midterm campaign version of Napoleon’s military adage to never interrupt your enemy when he is making a mistake: focus voters’ attention on Trump policies that many voters view unfavorably rather than on promoting a robust alternative agenda. To these strategists, the poster child for the ideal Democratic candidate in 2026 is Roy Cooper, a two-time former governor of North Carolina running for U.S. Senate in that state with the simple slogan “Make Stuff Cost Less”. Cooper focuses fairly narrowly on criticizing Trump actions that he argues have resulted in “farmers… getting crushed by tariffs” and “families… seeing prices rise at grocery stores and restaurants.” In response, Cooper proposes a modest set of reforms such as tougher anti-trust enforcement and making data centers pay more for the power they draw from public utilities.

Cooper may well reach the Senate – he has run ahead of his Republican opponent in every poll published since the race began. But the middle-of-the-road approach of Cooper and other moderates is not capturing the hearts of Democratic voters writ large. The hard-edged governing style of Trump and his Republican congressional allies, in areas ranging from immigration enforcement to foreign policy to social spending, has, to use a scientific term, made Democrats mad as hell. And – returning to Newton’s Third Law – Democrats want their leaders to push back hard at Trump with policies equal and opposite to those promulgated by the GOP-led Administration and Congress.

Evidence of Democrat voters’ more confrontational impulse is ample in recent party primaries to select candidates to run in the November congressional elections. In June, two progressive U.S. House candidates running to represent district in New York City – Brad Lander and Darializa Avila Chevalier – ousted incumbents, while a third (Claire Valdez, a member of the state Assembly) defeated the Brooklyn borough president in a race for another U.S. House seat. All three candidates support increased government support for public housing, universal federal health insurance, abolishing the U.S. Immigration and Customs Enforcement (ICE) agency, cutting defense spending, shifting energy production from fossil fuels to renewables to address climate change, and reducing American military involvement abroad, among other progressive policies. All are vocal in their criticism of Trump. It is not just in deep-blue New York where the left is gaining momentum: earlier this month, Melat Kiros, a 29-year-old Democratic U.S. House candidate in Colorado, backing an agenda similar to her New York counterparts, unseated U.S. Rep. Diana DeGette, who had represented the district in D.C. for nearly 30 years. Progressive candidates have tallied recent election wins in states from Maryland to Oregon.

A number of the candidates cited above, and others squaring off against more-moderate Democrats, are members of the Democratic Socialists of America (DSA), a left-leaning political organization founded in 1982. DSA’s importance in the U.S. political ecosystem can be easily exaggerated by both critics and supporters – the organization reports about 120,000 members, compared to 45 million Democrats and 39 million Republicans. Yet the DSA has clearly touched a nerve within a Democratic party still trying to figure out how best to oppose Trump and his MAGA movement – and position itself for a post-Trump future. The party’s goal to create “a system where ordinary people have a real voice in our workplaces, neighborhoods, and society” (see below) echoes in the campaign speeches and placards of progressive candidates on the stump today. The most famous DSA member is New York City Mayor Zohran Mamdani, the 34-year-old political wunderkind who rode his own anti-Establishment, anti-incumbent wave to power in January, defeating Andrew Cuomo, former New York governor and scion of a well-known political family.

What is Democratic Socialism? “Capitalism is a system designed by the owning class to exploit the rest of us for their own profit. We must replace it with democratic socialism, a system where ordinary people have a real voice in our workplaces, neighborhoods, and society… We want a democracy that creates space for us all to flourish not just survive and answers the fundamental questions of our lives with the input of all. We want to collectively own the key economic drivers that dominate our lives, such as energy production and transportation. We want the multiracial working class united in solidarity instead of divided by fear. We want to win “radical” reforms like single-payer Medicare for All, defunding the police/refunding communities, the Green New Deal, and more as a transition to a freer, more just life.” (Source: Democratic Socialist of America)

The recent success of DSA members and similarly inclined progressives has led to an equal and opposite (Newton again!) reaction from moderates who argue that moving too far to the left will cost Democrats in the midterm elections in November as well as the presidential election in 2028. In a July 20th note, Third Way, a center-left think tank, warned: “If [Democrats] follow the siren song of the left, they will steer their ships into the rocks. If they remain in the mainstream, they will have a fighting chance of winning not only the primary, but also most crucially, the general election.” Third Way and other naysayers of the progressive wave cite the example of Kamala Harris, who ran on a progressive agenda as the Democratic party’s presidential nominee in 2024 after then-President Joe Biden opted not to run for re-election. In the 2024 campaign, Harris proposed ambitious spending to combat climate change, an increase in the corporate tax rate and anti-price gouging laws for groceries, among other policies popular with many progressives. Trump, of course, comfortably defeated Harris in the presidential election (though the hurried mid-campaign handoff from Biden to Harris certainly didn’t help).

What does this mean for US-focused investors and corporates?

The moderate, middle-of-the-road approach of some Democratic candidates doesn’t seem to meet the political moment. Thus, we do think the progressive movement will move the Democratic Party to the ideological left in the years to come, even if “socialist” candidates remain a small portion of the electorate and the Congress. This could benefit sectors that have been out of favor thus far in Trump’s second term. For instance, health insurance companies that provide insurance under Medicaid and other healthcare programs for disadvantaged Americans could benefit from reversal of recent cuts to such programs under a Democrat-controlled Congress and/or White House. Similarly, apartment-focused real estate investment trusts (REITs) would benefit from expanded public spending on housing in a more progressive political climate. Child-care providers could see the same from federal programs to provide more support for working families. In sum, Democrats’ intense anger at Trump’s policies and persona are likely to be quelled only by a similarly forceful agenda on the other side of the spectrum – the equal and opposite reaction crystallized by Newton so long ago.

 

 

Sajid Javid- Five priorities of the new Health Secretary

Capital isn’t glamorous, but it’s where health reform succeeds or fails

Drawing on his experience as a Health Minister and Chair of the Health and Social Care Select Committee, GK’s strategic advisor Steve Brine argues the real challenge is delivering, not announcing, NHS infrastructure investment.

There is an old saying in politics that ministers like cutting ribbons more than fixing roofs. Reading the Government’s new 10-Year Capital Plan for Health and Social Care, I was reminded just how true that is.

Having served as a Health Minister and later as chair of the cross-party Health and Social Care Select Committee, I’ve learned that while politicians understandably focus on services, patients and waiting lists, none of those can be credibly improved without investing in the infrastructure that underpins them.

Estates, equipment and digital capability are not simply operational issues; capital isn’t glamorous – but it’s where health reform succeeds or fails

That is why I think this document matters, even if it contains fewer headline announcements than some may have wanted. It’s more of a capital investment framework than a capital spending announcement and while it is important because it starts to join together a series of previously announced commitments into one strategy, if you’re looking for lots of new money or major projects, you’ll likely be disappointed.

For investors, suppliers and those looking to support the transformation of health and care, this is best understood therefore as a statement of strategic direction. The Government is attempting to provide something the NHS has too often lacked: a long-term framework that links capital investment directly to service reform.

The themes will be familiar and re-enforce the view many of us held that the capital plan would essentially be the infrastructure companion to the 10-Year Health Plan which is now just over one year old.

Investment in neighbourhood health centres, modern diagnostic equipment (see my last piece), digital infrastructure, community facilities and the maintenance of the existing estate have all featured in previous announcements.

What is new is the attempt to bring those priorities together and explicitly align them with the Government’s ambition to shift care from hospitals into communities, from analogue to digital, and from sickness towards prevention.

As a minister, I learned very quickly that capital policy is health policy. You can’t expect clinicians to embrace new models of care if they are working in buildings designed before England last won the World Cup, nor can you promise a digital NHS without investing in the infrastructure that powers it. Too often, capital has been treated as something separate from healthcare delivery whereas in reality, it is one of its principal enablers.

That lesson stayed with me when I chaired the Health and Social Care Select Committee. Alongside colleagues on the Public Accounts Committee, we scrutinised the New Hospital Programme, asking not simply whether Boris Johnson’s ambitions were right, but whether they were deliverable.

That experience reinforced a rather obvious point: announcing infrastructure programmes is relatively straightforward; delivering them consistently over a decade, through changing political and economic circumstances, is considerably more challenging!

That is why I think investors should read this document with cautious optimism. The opportunities are clear. If the Government is serious about expanding community-based care, modernising diagnostics, digitising the NHS and addressing the maintenance backlog, there will inevitably be demand for expertise, technology, construction, data, equipment and innovative delivery models.

The direction of travel is now clearer than it has been for some time. The question not answered is pace. The plan sets out the destination far more clearly than the route to get there. There is relatively little detail about sequencing, procurement, prioritisation or delivery milestones.

History also provides a note of caution. During my time in government, I saw how easily capital budgets could come under pressure when day-to-day NHS spending became squeezed. Every government says it will protect long-term investment; not every government manages to do so.

And I note how one of the strongest themes is ‘repair first’ as large sums are earmarked for tackling the maintenance backlog, replacing obsolete equipment and of course removing RAAC. £6.75bn for hospital repairs over nine years and £2bn to remove reinforced autoclaved aerated concrete.

Overall, I see this as a welcome piece of strategic thinking. It provides a clearer signal than we have had for many years that infrastructure is no longer being viewed as an afterthought but as a prerequisite for NHS reform. For those looking to invest, that matters.

The real test, however, will not be whether the strategy is well written, but whether successive governments (including the new one about to start work) have the discipline to stick to it.