America doesn’t like socialism, but candidates keep winning

Democratic socialists just had their biggest election night ever.

There’s just one problem. It’s that most American voters don’t actually like socialism.

On Tuesday, six Democratic Socialists of America-backed candidates won House seats, giving the movement its biggest foothold yet in Congress and further increasing its influence within a Democratic Party already divided over how far to the left.

These victories come on the heels of New York City Mayor Zoran Mamdani’s coming to power, and are another milestone for a movement that has spent years trying to establish a party. With Democrats now in overwhelming control of Congress, the question is whether these electoral victories will translate into actual political power.

The results of a new CNBC voter poll show the potential dangers of ceding too much power to the left wing of the party. A survey of about 80,000 midterm voters found that 53% viewed socialism negatively, compared to 33% who viewed it favorably. Capitalism is doing pretty well, with 56% giving a positive view. Only 18% of voters identified themselves as democratic socialists.

This disconnect highlights both the opportunities and challenges facing the Democratic Party and its growing left. How the party reconciles the gap between reforming capitalism and fundamentally overhauling capitalism could determine its legislative agenda in Congress, its economic message to voters, and ultimately its direction heading into the 2028 presidential election.

When Tuesday’s winners, all of whom won in safe Democratic districts, are sworn in, DSA’s presence in Congress will quadruple.

But Democrats are expected to gain more than 250 House seats, potentially weakening their influence. Party leaders can afford to lose all eight DSA votes on most policies, giving the group far less bargaining power than it would wield in a narrowly controlled chamber.

Still, the movement is gaining financial strength. DSA relies on membership fees, but wealthy donors now support candidates through outside groups. The 12 largest donors to American Priorities, a super PAC that supports some DSA-backed candidates, contributed nearly $5.9 million this cycle, according to a CNBC analysis of Federal Election Commission filings through Oct. 31.

“While we have had success with more donors, we are also preparing an even stronger ground campaign to spread our message,” said Megan Romer, co-chair of DSA. “Mailers and ads alone won’t cut it anymore. We have to knock on more doors, make more phone calls, talk to more people in the workplace and in the union.”

The more revealing tests Tuesday took place outside liberal enclaves.

In Florida, where Democrats haven’t won a Senate race since 2012 and where President Donald Trump won by 13 points in 2024, DSA Rep. Angie Nixon came within three points of an upset, but lost by a larger margin than Democratic gubernatorial candidate David Jolly, who took a more moderate approach.

Michigan State had a similar story. Abdul El-Sayed, a progressive backed by Sen. Bernie Sanders (R-Vt.), a self-described democratic socialist, won the Senate seat by 7 percentage points. Still, he fell nearly four points short of Democratic Gov.-elect Jocelyn Benson’s margin of victory.

Although El-Sayed shares many of DSA’s priorities, he is not part of this group and does not receive its endorsement. He says he favors reforming capitalism rather than replacing it.

State ballot initiatives yielded similarly mixed verdicts ideologically. In ruby-colored Montana, nearly two-thirds of voters supported limits on corporate political spending, while in deep-blue California, voters approved an income tax hike on the wealthy but rejected a billionaire wealth tax by about 10 percentage points.

With DSA’s most likely standard-bearer, Rep. Alexandria Ocasio-Cortez (D.N.Y.), apparently considering a bid for the White House, the outcome sharpens the dilemma over the Democratic Party’s identity heading into 2028: Can left-wing populism expand the party’s coalition without alienating moderates in the battleground states needed to win the presidential election — especially in an unfavorable political environment?

“I think a lot of people who normally wouldn’t vote, probably would have, gritted their teeth and voted for the Democratic Party,” Romer told CNBC.

But it is clear that even voters who reject socialism are not satisfied with capitalism as it stands.

In a CNBC voter poll, three in four participants said the U.S. economy was in bad or not-so-good condition, compared to just 2% who said it was in good shape. And 70% said the economic system favors the wealthy rather than treating most Americans fairly.

That dissatisfaction helped fuel a populist message far beyond the socialist left, with victorious Democrats from Adam Hamilton in Kansas to James Talarico in Texas capitalizing on anger over rising costs, economic inequality and the political influence of wealthy elites. Eighteen candidates Sanders supported also won, including traditionally right-leaning states like Ohio and Montana.

“The real battle in this country is not left versus right, it’s the Senate versus the House,” Talarico, who flipped the Lone Star State’s Senate seats to Democrats, said in his victory speech. “Those at the top are working hard to anger and divide us because our unity is a threat to their wealth and power.”

Politicians not on the ballot also took note. “Democrats won by being populist economic warriors,” Sen. Elizabeth Warren, D-Mass., said in a video posted on X Friday.

Economists say indicators of increasing wealth concentration and the shrinking share of U.S. gross domestic product paid to workers in the form of wages are signs of a widening gap between the country’s rich and poor. As we emerge from the pandemic, the “K”-shaped economy has become a popular expression for the unequal recovery across income classes.

Americans were expressing their economic dissatisfaction long before they headed to the polls this week. The University of Michigan’s consumer confidence index, which is closely watched, has hit an all-time low this year.

“It’s trending up, but it’s not lifting all boats equally,” said Joe Brusuelas, chief economist at tax firm RSM. “That’s not what we told ourselves when we were young.”

Bruelas said this week’s results don’t show a dislike for capitalism as a whole, but rather that voters want a system that includes populist policies like Medicare for All. Or, as he calls it, “capitalism with a human face.”

“These things are not mutually exclusive,” said Brusuelas, who regularly briefs members of Congress on policy issues. “We can walk and chew gum at the same time.”

Tuesday’s landslide victory for Democrats has some on Wall Street racing to prepare their clients’ portfolios for potential policy changes. Analysts at Bank of America detailed how increased scrutiny of social media platforms and artificial intelligence data centers could affect the stock prices of companies in those industries. CIBC has built a basket of stocks that should benefit from a Democratic-controlled Congress.

Still, the reaction to this week’s election among Wall Street veterans and New York City business magnates was relatively muted compared to Mamdani’s victory in last year’s mayoral race.

After Mamdani secured the party’s nomination, Pershing Square CEO Bill Ackman said he was “a little depressed.” Ahead of Mamdani’s victory, Kathryn Wilde, who heads the nonprofit business owners group Partnership for New York City, told CNBC that polls show her approval rating “fear is the emotion.”

Wall Street moguls wondered how the city known as the capital of financial markets and world capitalism could survive under the self-proclaimed socialist. Some wondered whether billionaires would flee the city or whether companies would relocate their headquarters, but these fears have largely materialized since Mamdani took office.

With about 10 months left in Mr. Mamdani’s term, Anthony Chan, former chief economist at JPMorgan, said financial titans have realized that politics doesn’t always lead to significant policy changes. Chan said this is a message they have been holding onto as they leave office this week, with many understanding that Washington’s next elected officials aligned with democratic socialist policies are in the minority.

“Many of the people I meet were adamantly opposed to his candidacy, and those who were against him are now sending their children to his free day care,” Chan said, referring to Mamdani’s partnership with the state to expand a free program for 2-year-olds in New York City.

“I thought this mayor felt that the world would end if he took office,” said Chan, who is also an alumnus of Barclays and the New York Fed. “Now you’re sending your kids to his free daycare.”

But DSA has even bigger ambitions for 2028. With growing political clout, infrastructure and financial support, the movement is seeking to expand its influence across the United States, while one of its most prominent allies, Ocasio-Cortez, is considering a run for the White House.

“That infrastructure exists, and that would make a huge difference for a potential left-wing presidential candidate,” Romer said. “This is really a do-or-die period. We really have to deliver.”