This year inequality became the issue driving democratic politics. 2012 will be the year when voters in America have to decide what to do about it.

The economic battle will be about whether to increase taxation on top earners and what this will do to incentives and innovation. The cultural battle will be about what government should do to protect the American Dream for a disillusioned middle class. The ideological battle will be about the role of government as guarantor of equal opportunity in a market society. Socially, the election of 2012 will be about class as no election has been since Franklin D. Roosevelt.

The politics of class are devilishly complex for both parties. Republicans have to oppose higher taxation on the rich without appearing captives of an arrogant business elite, while Democrats have to support higher taxation without appearing to threaten the middle class. Both have to hold onto their ideological base while gaining votes from the moderate middle. The rhetoric will alternate between rousing appeals to the base and moderate appeals to the middle, but there is no doubt that this will be the most ideologically polarised election in a generation.