The establishment has been routed, but its economic orthodoxy rules.
President Biden’s American Rescue Plan is incredibly popular, even among Republican voters. We don’t have details yet on the next big Democratic initiative, but we can expect it to poll well, because we know that it will combine major infrastructure spending with tax hikes on corporations and the rich — which are all popular things.
But like the rescue plan, the next plan probably won’t get a single Republican vote in Congress. Why are elected Republicans still so committed to right-wing economic policies that help the rich while shortchanging the working class?
Fair warning: I’m not going to offer a good answer to this question. The point of today’s article is, instead, to argue for the question’s importance.
I ask why Republicans are “still” committed to right-wing economics because in the past there wasn’t any puzzle about their position.
Like many observers, I used to have a “What’s the matter with Kansas?” model of the G.O.P. That is, like Thomas Frank, the author of the 2004 book with that title, I saw the Republican Party essentially as an enterprise run by and for plutocrats that managed to win elections by playing to the cultural grievances and racial hostility of working-class whites. Bigotry, however, was mainly a show put on for the rubes; the party would go back to its pro-rich priorities as soon as each election was over.
The classic example came when George W. Bush won re-election by posing as America’s defender against gay married terrorists, then followed his victory by announcing that he had a mandate to privatize Social Security. (He didn’t.)
But that feels like a long time ago.
Billionaires may have started the Republican Party on its march toward extremism, but they’ve clearly lost control of the forces they conjured up. The G.O.P. can no longer put intolerance back in the closet after each election so as to focus on the real business of tax cuts and deregulation. Instead, the extremists are in charge. Despite a lost election and a violent insurrection, what’s left of the old Republican establishment has abased itself on the altar of Trumpism.
But while power in the Republican Party has shifted almost completely away from the conservative establishment, the party is still committed to an economic ideology of tax and spending cuts. And it’s not obvious why.
When Donald Trump rolled over establishment candidates in 2016, it seemed possible that he would lead his party toward what some political scientists call “Herrenvolk democracy,” policies that are genuinely populist and even egalitarian — but only for members of the right racial and ethnic groups.
South Africa under apartheid worked that way. There were limited gestures toward whites-only populism in the Jim Crow U.S. South. In Europe, France’s National Front combines hostility to immigrants with calls for an expansion of the nation’s already generous welfare state.
As a candidate, Trump often sounded as if he wanted to move in that direction, promising not to cut social benefits and to begin a large infrastructure program. If he had honored those promises, if he had shown any hint of genuine populism, he might still be president. In practice, however, his tax cut and his failed attempt to repeal Obamacare were right out of the standard conservative playbook.
The exception that proves the rule was Trump’s farm policy, which involved huge subsidies to farmers hurt by his trade war, but managed to give almost all of those subsidies to whites. The point is that there was nothing like this on a broader level.
Was Trump’s continuation of unpopular economic policies simply a reflection of his personal ignorance and lack of interest in substance? Events since the election suggest not.
I’ve already mentioned lock-step Republican opposition to Biden’s relief package. Rejection of economic populism is also apparent at the state level. Consider Missouri. One of its senators, Josh Hawley, has declared that Republicans must be “a working-class party, not a Wall Street party.” Yet Republicans in the state’s legislature just blocked funding for an expansion in Medicaid that would cost the state very little and has already been approved by a majority of voters.
Or consider West Virginia, where another unfulfilled Trump promise, to revive the coal industry, resonated with voters. Coal isn’t coming back; so the state’s Republican governor is proposing to boost the economy by … eliminating income taxes. This echoes the failed Kansas tax cut experiment a few years ago. Why imagine it would work any better in Appalachia?
So what’s going on? I suspect that the absence of true populism on the right has a lot to do with the closing of the right-wing mind: the conservative establishment may have lost power, but its apparatchiks are still the only people in the G.O.P. who know anything about policy. And big money may still buy influence even in a party whose energy comes mainly from intolerance and hate.
In any case, for now Republican politicians are doing Democrats a big favor, clinging to discredited economic ideas that even their own supporters dislike.
It’s bad faith in the name of bipartisanship.
So 10 Republican senators are proposing an economic package that is supposed to be an alternative to President Biden’s American Rescue Plan. The proposal is only a third of the size of Biden’s plan and would in important ways cut the heart out of economic relief.
Republicans, however, want Biden to give in to their wishes in the name of bipartisanship. Should he?
No, no, 1.9 trillion times, no.
It’s not just that the G.O.P. proposal is grotesquely inadequate for a nation still ravaged by the coronavirus pandemic. Beyond that, by their behavior — not just over the past few months but going back a dozen years — Republicans have forfeited any right to play the bipartisanship card, or even to be afforded any presumption of good faith.
Let’s start with the substance.
True, the end of the nightmare is finally in sight. If all goes well, at some point this year enough people will have been vaccinated that we’ll reach herd immunity, the pandemic will fade away and normal life can resume. But that’s unlikely to happen before late summer or early fall.
And in the meantime we’re going to have to remain on partial lockdown. It would, for example, be folly to reopen full-scale indoor dining. And the continuing lockdown will impose a lot of financial hardship. Unemployment will remain very high; millions of businesses will struggle to stay afloat; state and local governments, which aren’t allowed to run deficits, will be in dire fiscal straits.
What we need, then, is disaster relief to get afflicted Americans through the harsh months ahead. And that’s what the Biden plan would do.
Republicans, however, want to rip the guts out of this plan. They are seeking to reduce extra aid to the unemployed and, more important, cut that aid off in June — long before we can possibly get back to full employment. They want to eliminate hundreds of billions in aid to state and local governments. They want to eliminate aid for children. And so on.
This isn’t an offer of compromise; it’s a demand for near-total surrender. And the consequences would be devastating if Democrats were to give in.
But what about bipartisanship? As Biden might say, “C’mon, man.”
First of all, a party doesn’t get to demand bipartisanship when many of its representatives still won’t acknowledge that Biden won legitimately, and even those who eventually acknowledged the Biden victory spent weeks humoring baseless claims of a stolen election.
Complaints that it would be “divisive” for Democrats to pass a relief bill on a party-line vote, using reconciliation to bypass the filibuster, are also pretty rich coming from a party that did exactly that in 2017, when it enacted a large tax cut — legislation that, unlike pandemic relief, wasn’t a response to any obvious crisis, but was simply part of a conservative wish list.
Oh, and that tax cut was rammed through in the face of broad public opposition: Only 29 percent of Americans approved of the bill, while 56 percent disapproved. By contrast, the main provisions of the Biden plan are very popular: 79 percent of the public approve of new stimulus checks, and 69 percent approve of both expanded unemployment benefits and aid to state and local governments.
So when one party is trying to pursue policies with overwhelming public support while the other offers lock-step opposition, who, exactly, is being divisive?
Wait, there’s more.
Everyone knew that Republicans, who abruptly stopped caring about deficits when Donald Trump took office, would suddenly rediscover the horror of debt under Joe Biden. What even I didn’t expect was to see them complain that Biden’s plan gives too much help to relatively affluent families.
Again, consider the 2017 tax cut. According to the nonpartisan Tax Policy Center, that law gave 79 percent of its benefits to people making more than $100,000 a year. It gave more to Americans with million-dollar-plus incomes, just 0.4 percent of taxpayers, than the total tax break for those living on less than $75,000 a year, that is, a majority of the population. And now Republicans claim to care about equity?
In short, everything about this Republican counteroffer reeks of bad faith — the same kind of bad faith the G.O.P. displayed in 2009 when it tried to block President Barack Obama’s efforts to rescue the economy after the 2008 financial crisis.
Obama, unfortunately, failed to grasp the nature of his opposition, and he watered down his policies in a vain attempt to win support across the aisle. This time, it seems as if Democrats understand what Lucy will do with that football and won’t be fooled again.
So it’s OK for Biden to talk with Republicans and hear them out. But should he make any substantive concessions in an attempt to win them over? Should he let negotiations with Republicans delay the passage of his rescue plan? Absolutely not. Just get it done.
President Trump radiates so much moral toxicity, and his administration displays so much malice and ineptitude in policymaking, that his opponents often fall into the habit of making everything about him. Trump’s racism. Trump’s corruption. Trump’s demagoguery. Trump’s authoritarianism.
There’s truth to all of that. But it might not be the wisest way to wage a political war against the right. Trump’s vileness is all there, right on the surface, broadcast without shame or apology to the largest possible audience every single day. People either love it or hate it — and there are already significantly more people in the latter camp. Why not let the president’s polarizing personality speak for itself and instead take a different, broader tack against the right-wing party and movement he leads?
Every political coalition is a conglomeration of factions that put aside or suppress their differences for the sake of mutual gain. In the case of the many right-populist parties and movements around the world, those differences are especially sharp and ripe for exploitation by political opponents.
Consider Germany’s far-right Alternative für Deutschland (AfD). The German establishment treats the upstart party as ideologically beyond the pale because of its nativist and xenophobic position on immigration. But the AfD is actually a conglomeration of two very different factions. One of them is a genuine neo-fascist movement that traffics in outright racism, but the other focuses on economic policy, advocating for lower taxes and cuts to regulations on business. The two factions fight often and bitterly, but they stick together out of electoral self-interest, realizing that they have a greater chance of gaining and holding power if they collaborate in taking aim at the political establishment (even though they disagree in many ways about what that establishment has done wrong).
This broad fissure — between hard-core nationalist anti-liberalism and an amped-up form of neoliberal or libertarian ideology — can be found embedded in nearly every right-wing populist party or movement. It certainly plays a role in the interminable Brexit debate in Great Britain. Many of those clamoring to leave the European Union do so in xenophobic opposition to the free movement of people allowed and encouraged by Brussels. But many others have no objection to high rates of migration and instead bristle at EU regulations that stand in the way of the UK becoming a free-market mecca parked just outside the over-regulated monetary union like an Anglophone Singapore ready to cash in on a craving for unbridled commerce.
The same tensions are present on multiple dimensions in the Trumpified Republican Party. A number of them have been there in the GOP since the time of Ronald Reagan. But they’ve been pushed to the edge of utter incoherence since Trump’s hostile takeover of the party in 2016.
In recent months, members of the religious right have taken a sharply anti-liberal turn, denouncing the aspiration toward liberal fairness and impartiality in government, which they now consider a sucker’s game that keeps conservatives perpetually on the defensive. In its place, the religious right increasingly advocates a politics oriented toward the “highest good,” which it defines in terms of traditional Christian morals.
As a model, this faction of the right looks longingly toward the explicitly anti-liberal government of Viktor Orban’s Fidesz Party in Hungary. A Republican Party that followed Orban’s lead would include policies designed to restrain and restrict capitalism, ultimately subordinating the economy to moral concerns. (This would likely include obscenity laws, censorship of pornography, regulations aimed at taming the “creative destruction” of markets, and the enactment of pro-natalist policies.)
Even aside from the singular absurdity of Donald Trump serving as the leader of a theologically inspired moral crusade, the Trump administration has done something close to the opposite — cutting taxes and regulations on the corporate sector and reining in government-imposed oversight and restraint, even when businesses would prefer otherwise. Far from subordinating the economy to a moral vision, this is a libertarian’s wet dream of unconstrained profit-seeking.
Another dimension to the religious right’s more aggressive agenda is an emphasis on local communities (often low-density rural areas where farming remains an important aspect of daily life) as the proper locus of the yearning for moral regeneration. Yet these hopes for the future revitalization of moral standards and limits are projected onto an administration in which the Secretary of Agriculture recently warned that family farms don’t have much of a future, because “in America the big get bigger and the small go out.” Once again, a radicalized conservative critique of liberalism sits side-by-side with a radicalized form of economic libertarianism.
Nowhere are such tensions more apparent than in foreign policy, where a sizable number of Republicans pine for a revival of realism and restraint (fewer wars and fewer obligations for American soldiers to police the world), whereas many others appear to favor bombing more people than ever as a way of throwing our weight around, showing the world who’s boss, and bullying other nations (allies and enemies alike) into doing our bidding in purely transactional terms. These two visions of America’s role in the world stand in stark contrast with one another, and the haphazard, incontinent character of the Trump administration’s foreign policy is the result.
Put it all together and we’re left with a picture of a political movement in complete ideological disarray, unsure of what it wants to do, and in constant danger of internal conflict. That’s something that Democrats can and should be attempting at every opportunity to encourage and exploit.
A house divided against itself cannot stand. And neither can a political party.
President Trump came into office promising some fabulous yet unspecified health-care plan to replace the Affordable Care Act. No plan existed; every plan Republicans came up with managed to reduce the number of insured. Trump promised never to cut entitlements; his fiscal 2020 budget proposal would have done just that.
Trump said he’d bring back manufacturing. In fact, it slowed and now has slumped. (“Manufacturing has slowed amid global uncertainty,” NPR reported earlier this month. “That’s one of the reasons the Federal Reserve gave for cutting interest rates this week.”)
Trump said he’d
- get tough on drug companies. He hasn’t. He said his
- tax cut would be aimed at the middle class,
- deliver $4,000 a year to the average American family and
- permanently boost business investment, pushing growth above 3 percent. Nope, nope and nope.
An old line about war says that amateurs talk about tactics, but professionals study logistics. A similar line about the economy would be that amateurs talk about stocks, but professionals study the bond market. And lately the bond market is telling a tale of profound pessimism.
Why does the bond market reflect economic expectations? If investors expect a boom, they also expect the Fed to try to rein in the boom by raising short-term interest rates (which it more or less directly controls), to head off potential inflation. The prospect of higher short-term rates then leads to higher long-term rates, because nobody wants to lock money in at a low yield if returns are going up. Conversely, if investors expect a slump, they expect the Fed to cut rates, and pile into long-term bonds to lock in returns while they can.
So the slump in long-term yields since last fall, from a peak of 3.2 percent to just 1.63 percent this morning, says that investors have grown drastically less sanguine about the economy. Long-term rates are now notably lower than short-term rates — and this kind of “yield curve inversion” has in the past consistently been the precursor to recession:
Ominous yieldsFederal Reserve of St. Louis
Bond investors could, of course, be wrong — there are some people out there claiming that we’re in a bond bubble. And so far the real economy, as measured by G.D.P., job growth, and all that, is still chugging along. But as I said, there’s clearly a wave of pessimism sweeping the market. What’s it about?
One answer is that last fall many investors were looking at a couple of quarters of high growth, and thinking that this might be the start of an extended boom. Serious economists warned that this growth was a temporary lift — a “sugar high” — driven by the shift from fiscal austerity to what-me-worry deficit finance. But at least some people bought into the Trumpist line that tax cuts were going to produce an enduring rise in the growth rate.
At the same time, Trump’s trade war may be starting to take a toll. In particular, the uncertainty may be deterring business spending. Whether new tariffs would hurt or help your business, it now makes sense to hold off on plans to expand, until you see what he actually does.
Finally, economic troubles in the rest of the world — several major European economies are quite possibly in recession — are filtering back to the U.S.
Now, most economists aren’t predicting a recession here, for good reason. The truth is that nobody is very good at calling turning points in the economy, and calling a recession before it’s really obvious in the data is much more likely to get you declared a Chicken Little than hailed as a prophet. (Believe me, I know all about it.) But the bond market, which doesn’t worry about such things, is looking remarkably grim. I leave the possible political implications as an exercise for all of you.
Why do Republicans enable right-wing extremism?
Why has the Republican Party become a systematic enabler of terrorism?
Don’t pretend to be shocked. Just look at G.O.P. responses to the massacre in El Paso. They have ranged from the ludicrous (blame video games!) to the almost honest (who would have expected Ted Cruz, of all people, to speak out against white supremacy?). But as far as I can tell, not one prominent Republican has even hinted at the obvious link between Donald Trump’s repeated incitements to violence and the upsurge in hate crimes.
So the party remains in lock step behind a man who has arguably done more to promote racial violence than any American since Nathan Bedford Forrest, who helped found the Ku Klux Klan, a terrorist organization if there ever was one — and who was recently honored by the Republican governor of Tennessee.
Anyway, the party’s complicity started long before Trump came on the scene. More than a decade ago, the Department of Homeland Security issued a report warning about a surge of right-wing extremism. The report was prescient, to say the least. But when congressional Republicans learned about it, they went on a rampage, demanding the resignation of Janet Napolitano, who headed the agency, and insisted that even using the term “right-wing extremism” was unacceptable.
This backlash was effective: Homeland Security drastically scaled back its efforts to monitor and head off what was already becoming a major threat. In effect, Republicans bullied law enforcement into creating a safe space for potential terrorists, as long as their violent impulses were motivated by the right kind of hatred.
No, not exactly. No doubt some members of Congress, and a significant number of Trump administration officials, very much including the tweeter in chief, really are white supremacists. And a much larger fraction — almost surely bigger than anyone wants to admit — are racists. (Recently released tapes of conversations between Ronald Reagan and Richard Nixon reveal that the modern G.O.P.’s patron saint was, in fact, a crude racist who called Africans “monkeys.”)
But racism isn’t what drives the Republican establishment, and my guess is that a majority of the party’s elected officials find it a little bit repugnant — just not repugnant enough to induce them to repudiate its political exploitation. And their exploitation of racism has led them inexorably to where they are today: de facto enablers of a wave of white supremacist terrorism.
The central story of U.S. politics since the 1970s is the takeover of the Republican Party by economic radicals, determined to slash taxes for the wealthy while undermining the social safety net.
With the arguable exception of George H.W. Bush, every Republican president since 1980 has pushed through tax cuts that disproportionately benefited the 1 percent while trying to defund and/or privatize key social programs like
- Social Security,
- Medicaid and the
- Affordable Care Act.
So how do Republicans win elections? By appealing to racial animus. This is such an obvious fact of American political life that you have to be willfully blind not to see it.
For a long time, the G.O.P. establishment was able to keep this game under control. It would campaign using implicit appeals to racial hostility (welfare queens! Willie Horton!) but turn postelection to privatization and tax cuts.
But for some reason this bait-and-switch started getting less effective in the 2000s. Maybe it was the reality of America’s growing racial diversity; maybe it was the fact that American society as a whole was becoming less racist, leaving the hard-core racists feeling isolated and frustrated. And the election of our first black president really kicked hatred into overdrive.
The result is that there are more and more angry white people out there willing to commit mayhem — and able to do so because those same Republicans have blocked any effective control over sales of assault weapons.
A different, better G.O.P. might have been willing to acknowledge the growing threat and supported a crackdown on violent right-wing extremism, comparable to the F.B.I.’s successful campaign against the modern K.K.K. in the 1960s. A lot of innocent victims would be alive today if Republicans had done so.
But they didn’t, because admitting that right-wing extremism was a threat, or even a phrase law enforcement should be allowed to use, might have threatened the party’s exploitation of racial hostility to achieve its economic goals.
In effect, then, the Republican Party decided that a few massacres were an acceptable price to pay in return for tax cuts. I wish that were hyperbole, but the continuing refusal of G.O.P. figures to criticize Trump even after El Paso shows that it’s the literal truth.
So as I said at the beginning, the G.O.P. has become a systematic enabler of terrorism. Why? Follow the money.
The scariest part of Trump’s first year as president isn’t how abnormal he is, it’s how normal he makes everything else look by comparison.