Trump: The Social Democrat no one wants to talk about

 Western societies have never been richer than they are today. Gross domestic product has grown, incomes have risen, and fortunes have exploded. Yet an entire generation feels that prosperity is slipping away—not because they work less or are less productive, but because housing, the gateway to economic security, has become unattainable.

In the heyday of postwar social democracy, affordable housing was a paramount political objective. Not a by-product of the market, but an explicit societal project. Sweden built the Million Programme to ensure ordinary people had access to affordable housing. In Norway, the state relied on the State Housing Bank (Husbanken), municipal land policy, and regulated credit to make home ownership attainable for ordinary wage earners. Housing was treated as a welfare good, not a speculative asset.

Somewhere along the way, that objective disappeared—not because the problem was solved, but because it became politically more convenient to sweep it under the carpet.

When housing became wealth—and politics disappeared

Politicians grew more preoccupied with international ambitions. Meanwhile, house prices kept rising, year after year. For those already inside the market, this became a windfall: higher net worth, greater borrowing capacity, easier access to credit. For those outside—especially younger generations—housing turned into a moving target, always pulling further ahead of wages. What had once been a cost of living became a wealth-generation machine for some, and an ever-higher barrier to entry for others.

That housing has grown more expensive even as society has grown richer is an indictment of the prevailing economic order. Even we capitalists must acknowledge that.

As investor Peter Thiel once wrote to Facebook founder Mark Zuckerberg: when young people confront sky-high housing prices and student debt at the same time, they begin adult life with negative net worth and little prospect of accumulating property. Without ownership in capitalism, capitalism loses its legitimacy. For many young people, it becomes natural to seek answers elsewhere—in socialism.

That insight gained renewed relevance during last autumn’s mayoral election in New York, where democratic-socialist Zohran Mamdani won on a promise to make housing more affordable.

Mamdani is unlikely to be right about what is to be done. But he is right that something must be done.

Trump sees the problem—and breaks the taboo

One person who clearly took note of Mamdani’s upset victory was Donald Trump. Despite the usual Internet sabre-rattling, the two demagogues held a surprisingly cordial meeting at the White House in November.

In recent days, Trump has proposed or endorsed a series of interventions in banking and finance: caps on credit-card interest rates, restrictions on institutional purchases of single-family homes, government purchases of mortgage-backed securities to push down borrowing costs, open pressure on the central bank, and an explicit political goal of lower energy and living costs. Taken together, this agenda resembles the legacy of Einar Gerhardsen and Olof Palme far more than that of Reagan or Thatcher.

Had a European social democrat proposed the same measures, the reaction would have been entirely predictable: finally, someone taking living costs and financial power seriously. Imagine if Norway’s prime minister had returned briefly from summits with Zelensky and Macron to unveil a sweeping package to address the housing crisis—“ordinary homes for ordinary people.” The liberal commentariat in Oslo would have hailed it as bold, necessary, and morally correct.

When Trump does it, the response is silence—or moral panic.

The forgotten everyday economy

The common thread in Trump’s proposals is the cost of living: housing, credit, energy. These are precisely the issues that should lie at the heart of left-wing politics. Yet much of Europe’s centre-left has relinquished responsibility for them, handing them over to the market.

At the same time, these parties have pursued immigration policies that intensify pressure on already scarce housing markets, while embarking on an ambitious green transition without any credible contingency in place of cheap Russian gas. The result has been higher prices, tighter supply, and declining political credibility.

Norway's Foreign Minister Barth Eide can fly to Ukraine and distribute billions. Back home, the European worker is left standing on the platform, cap in hand.

Crude tools—real problems

This does not mean Trump’s proposals are necessarily wise. Caps on interest rates, political pressure on the central bank, or bans on institutional property investors are blunt instruments that risk producing serious unintended consequences.

The credit-card proposal illustrates the danger. A 10 percent interest-rate cap is crude, unnuanced, and economically problematic. It would make risk-based pricing difficult, push subprime borrowers out of regulated credit markets, and weaken—or eliminate—reward programmes. Credit would not become cheaper; it would become scarcer.

Yet it also exposes an uncomfortable truth: today’s credit-card economy is built on cross-subsidisation. The weakest borrowers pay punitive interest rates. The strongest collect points, lounge access, and cashback. When this system is defended as “efficient,” it is in fact a defence of a regressive model in which disciplined, affluent consumers benefit from the financial distress of the poor.

What would Gerhardsen say?

Whatever one thinks of the merits of Trump’s proposals, it is striking that it is Trump—of all people—who today channels Gerhardsen and Palme, while leaders such as Støre, Starmer, Merz, and Macron remain silent.

Trump is not a social democrat by conviction, nor is he a consistent economic thinker. But he is willing to confront the cost-of-living crisis that Europe’s social-democratic leaders prefer to ignore. Faced with a financial system increasingly detached from the realities of ordinary households, he is prepared to use state power in ways Europe’s centrist parties long ago abandoned.

What would Gerhardsen say? If he—or Palme—were alive today, there is good reason to believe they would recognise the problems Trump is addressing, and propose similar solutions.

This is not necessarily a compliment to Trump—certainly not from us. It is, however, a damning verdict on a political landscape that has forgotten its contract with voters, in favour of more "interesting"—and more irresponsible—international projects.

The real paradox is not that Trump is pursuing policies with social-democratic characteristics. It is that so self-described social democrats dare to do the same.