From the WSJ by Greg Ip

In his State of the Union address Tuesday night, President Trump put the economy front and center in his bid for reelection. The speech had its share of hyperbole, but the economic case Mr. Trump laid out was sound and the political appeal obvious.

Economic growth, while not spectacular, is solid. Unemployment is the lowest in 50 years, and wages are picking up for a wide range of workers, not just the highest paid. Many of the trends for which Mr. Trump took credit began before he took office. Nonetheless, voters typically link the state of the economy to the incumbent and seem ready to do so this year.

Indeed, given that approval on his handling of the economy consistently exceeds his overall approval, Mr. Trump should hope that the election is a referendum on the economy. And if Vermont Sen. Bernie Sanders goes on from his strong showing in the Iowa caucus Monday to become the Democratic nominee, Mr. Trump will get that referendum. Mr. Sanders’s rise makes possible the once unthinkable: Mr. Trump may run as the moderate, at least on economic issues.

Tuesday night, as he has so often before, Mr. Trump labeled Democratic proposals, such as single-payer health care, as “socialist” and “radical,” invoking Venezuela where widespread nationalization was followed by economic collapse and hyperinflation. That distorts what Mr. Sanders, a self-declared “democratic socialist,” means by socialism. “I don’t believe government should take over the grocery store down the street or own the means of production,” Mr. Sanders said in 2015. “I do believe in private companies that thrive and invest and grow in America.”

But if the “socialist” part of Mr. Trump’s label is misleading, the “radical” part isn’t. Democrats have for decades argued that inequality means many Americans don’t share the benefits of economic growth. Mr. Sanders goes further, calling for “revolution,” the sort voters typically embrace at times of crisis like the Great Depression.

Mr. Sanders goes further than any Democratic rival, even fellow progressive Sen. Elizabeth Warren of Massachusetts, in how far he would remake the economy. Cornerstone Macro, an investment research firm, estimates Mr. Sanders’s planned new taxes are comparable to Ms. Warren’s, at about $28 trillion over a decade, but his planned spending is estimated to be twice as large at $66 trillion or more. That would dramatically expand the size of government as a share of gross domestic product, approaching that of Scandinavia. While this wouldn’t make the U.S. “socialist,” it would be a radical departure from its small government past.

Like Ms. Warren, Mr. Sanders promises Medicare for All, free public college, the cancellation of student debt, a rapid shift to renewable energy and a ban on fracking.


But in many respects, he would go much further, with a federal jobs guarantee that could potentially add millions to government payrolls. He would ban federal permitting for any oil-and-gas drilling, or related transportation or refining infrastructure, and steeply raise taxes on fossil-fuel companies while prosecuting them for climate change. His ultimate goal appears to be the end of an industry that now employs 168,000 and contributes 1% of U.S. economic output. Unions would negotiate contracts across an entire industry instead of just one company—a system France has sought to shed for its rigidity—and companies would have to provide 20% of their stock to their employees.

Mr. Sanders is also comfortable with price controls: he would cap credit card and consumer loan rates at 15%, limit rent increases nationwide to 3% or one-and-a-half times the inflation rate, regulate broadband fees, even cap ATM fees.

When Ms. Warren released a detailed plan on how she would implement and pay for Medicare for All, it attracted intense scrutiny and criticism and her support nose dived. Mr. Sanders’s support has risen despite, or perhaps because, he hasn’t been as detailed. His appeal lies more in the simplicity and authenticity of his message than the practicality of his platform.

Yet if Mr. Sanders becomes the nominee, he will become the singular focus of Wall Street, the media, Republicans and President Trump’s Twitter feed. Anyone who doesn’t know where Mr. Sanders stands now will by September. And many of those stances, while popular among Democrats, are unpopular with the general electorate. Some, like the fracking ban, seem guaranteed to alienate voters in swing states such as Pennsylvania.

This fall, regardless of their nominee, Democrats will portray Mr. Trump as far to the right of the country. And on issues such as immigration, the environment, and guns they have a point. But on key economic policies such as cutting elderly entitlements and free trade Mr. Trump edged his party toward the center. He may face an opponent who has moved Democrats away from it.

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