Senator's tough stance against Wall Street is attracting voters on the left who are disenchanted with the party establishment

Not many political "rock stars" inspire audience members to knit, but, even by Washington's sedate standards, the darling of America's new left is a quiet revolutionary.

Senator Elizabeth Warren, a former Harvard professor turned Wall Street scourge, is one of a clutch of unlikely radicals giving hope to those disenchanted with mainstream Democrats.

Hours before a rare public appearance last week, one of the largest rooms in Congress begins slowly filling up with an odd mix of groupies: policy wonks, finance geeks, Occupy activists, and, yes, the type of political conference attendee who brings their knitting in.

Warren proceeds to calmly recite numbers that could inspire even librarians to storm a few barricades. The Wall Street crash has cost the US economy $14tn, she says, but its top institutions are 30% larger than before, own half the country's bank assets and are in receipt of an implicit taxpayer subsidy of $83bn a year because they are deemed too big to fail.

"We have got to get back to running this country for American families, not for its largest financial institutions," concludes Warren, before noting how little President Barack Obama has done to achieve that.

When the same message was delivered to union leaders in September, she had them standing on their chairs. But for the first time since the banking crash, the argument is connecting at the ballot box too. Mayoral elections in Boston and New York two weeks ago saw leftwing candidates with similar messages about economic inequality win by surprising landslides.

Meanwhile, Terry McAuliffe, the former Clinton fundraiser who epitomises the business-friendly Democrat mainstream, saw his substantial poll lead in Virginia all but evaporate under attack from populists on the right.

Whereas the Tea Party has worked relentlessly since the financial crash to recast the Republican party as a perceived challenger to Wall Street, Democrats such as Obama and his potential successor Hillary Clinton rely heavily on financial donors and have veered away from confrontation. But the popularity of senators such as Warren in Massachusetts and Sherrod Brown in Ohio has combined with recent mayoral election wins by Bill de Blasio in New York and Marty Walsh in Boston to raise hopes that the left could yet exert the same pull on Democrats.

"The challenges the Democratic party has faced since 2009 have largely been a result of the public's perception that the party isn't clearly enough on their side," argues Damon Silvers, policy director for union umbrella group AFL-CIO. "Republicans have exploited that very skilfully, even though Republicans are totally owned by the financial class."

"What's happening now is the emergence of politicians – De Blasio and Walsh being recent examples – that are just not interested in that type of politics," adds Silvers. "And those people are being successful. They are stepping into a political vacuum that is all about authenticity in relationship to issues of inequality and the power of financial interests."

Though the similarity only goes so far, the shared interest of America's new left and Tea Party conservatives in challenging the economic status quo also shows how figures such as Warren might attract broader support beyond traditional Democrat voters.

One self-confessed Warren groupie is David Collum, a Cornell University chemistry professor and amateur investor, whose enthusiasm for free market economics previously led him to endorse libertarian Republican candidate Ron Paul. Collum has been exchanging regular emails with Warren since before the crash and says she captured his imagination because her brand of intelligent populism transcends traditional political boundaries.

"If you look at her and Ron Paul, it's the same thing: they appear to speak from the heart," he explains. "Here you have Warren saying the banks are thugs, she supports the consumer which has a natural leftwing sound to it, but I don't think it's putty-headed liberalism, I think she is just an advocate for the small person."

The buzz around Warren reached fever pitch last week with an article in New Republic magazine predicting she could challenge Hillary Clinton for the Democrat nomination in the 2016 presidential election. Widely-read, if not endorsed, across Washington, the piece entitled "Hillary's nightmare" was followed by a similar analysis in Politico describing the prospect as "Wall Street's nightmare".

Like many eventual nominees, Warren is emphatic she does not want to run for the White House (a fact her supporters claim makes her ideal) and the notion resulted in scepticism from some Washington insiders.

But the question of whether it is Warren or one of the other emerging leftwingers who challenges the Clinton orthodoxy in 2016 may prove besides the point if even the talk of her running causes Team Hillary to reassess its rumoured dependence on Wall Street fundraising and helps pull the party away from big business.

Political pundits in the media have often been slow to capture public mood changes, ignoring the Occupy Wall Street movement for months, for example, and were also caught by surprise by de Blasio's win in New York.

The man who took America's biggest city back under Democratic party control for the first time in two decades was not even endorsed by the liberal New York Times, which opted for a more mainstream candidate, Christine Quinn.

Rupert Murdoch's New York Post was predictably blunter, calling de Blasio a pro-Cuban communist, while the Washington Post got into hot water with a column suggesting "people with conventional views" in other states would have to "repress a gag reflex" when considering him because he was married to an African-American who used to be lesbian.

In the end, de Blasio won the support of 73% of New York's voters with an unapologetically leftwing campaign: arguing for tax increases on the rich to pay for better schools and using his afro-haired son to promote a campaign against police harassment of young black men.

The scepticism among political elites that such policies will translate outside liberal bastions like New York may be warranted. Howard Dean, the last such candidate seen as a serious presidential candidate, crashed and burned when he was seen as too "shouty". Ralph Nader, who ran to the left of John Kerry as an independent candidate in 2004 arguably cost him the election that made way for George W Bush.

But what has changed is that mainstream Democrats and Republicans in Washington seem even less popular today than the perceived outsiders on the left and right.

Both Obama and the Republican party hit record lows in the polls recently after the government shutdown and botched launch of healthcare reforms exacerbated a national feeling that Washington is broken.

"I think the lesson that we have to draw from [these polls] is that the American people are not satisfied," said White House spokesman Jay Carney. "[Not satisfied] that we're, all of us, focused on the things that matter to them, and we're not getting the results that they want."

In this atmosphere, anyone who doesn't appear part of the Washington mainstream is by definition a populist.

But whereas rightwing challengers in the Tea Party can lump public dissatisfaction with Washington, Wall Street and the government into one big anti-establishment message, radicals on the left have a finer line to tread, especially after Obama's botched healthcare launch led to such mistrust of their preferred public sector solutions.

Warren does it by pointing out the need for more regulation, both to save capitalism from itself and re-engage the social mobility of the American dream.

Other rising stars such as Maryland governor Martin O'Malley – also tipped as a leftwing challenger to Hillary in 2016 – have done it by marrying liberal policies with managerial success at the state level.

The former mayor of Baltimore, said to be one of the inspirations for the Tommy Carcetti character in The Wire, has introduced gun control legislation, abolished the death penalty and legalised same-sex marriages, all while successfully increasing government spending on areas such as transport.

Nonetheless, compared with Hillary Clinton, both O'Malley and Warren remain virtual unknowns on the national stage and would face a huge challenge to win the Democratic primary let alone the White House.

Warren describes her battle with the banks as a "David and Goliath struggle". Whether David can take on the Goliaths of the Democratic party is a whole other matter.

© Guardian News and Media 2013