History, Tax Cuts And Trump

Harvey Feigenbaum

A new wave of rising populism has affected and troubled many industrialized countries in Europe as well as the US. It is not a new phenomenon on either continent. In Europe the most recent trend was triggered by mass arrivals of migrants, most attempting to escape economic misery and political abuse. New right-wing parties have gained popularity and in some countries, established conservative parties have moved to the right to avoid losing votes to populists. Social democrats championing newcomers have paid the price at the polls. The roots of this trend have been linked to the corrosive effects of globalization and neoliberal policies on working class voters. Thus, the rise of this new right in Europe has been linked primarily to exogenous shocks, interacting with an inhospitable economic environment. Parallels with the interwar period are clear and frightening.

In the US many analysts express similar ideas. However, in America new right-wing parties have not emerged. It is the established Republican Party which has been the most transformed by these forces, but which has a very different history from that of conservatives in Europe. Republican support for populists has roots that go back to the 19^th century, as well as the Civil Rights movement of the 1960s. Exploring this history can help us understand the evolution of the “Grand Old Party” (GOP) which has weakened its pro-business leadership, and culminated in the election of Donald Trump.

Tensions in the American Right

Before Christmas the Republican leadership gave themselves a present, a 1.5 trillion dollar tax cut. It was steeply regressive, with the modest benefits for middle class Americans timed to expire after five years, while benefits for the upper classes were made permanent. It will certainly make impossible the infrastructure investments President Trump promised in his State of the Union Address on January 30.

This huge gift to the well-to-do would be paid for, eventually, by cuts to social programs. Republicans justified the initiative as necessary for making corporations more competitive and argued the cuts would pay for themselves by stimulating economic growth. The latter was disputed by most professional economists. This tax “reform” was the main reason that establishment Republicans had been willing to tolerate the erratic antics of their nominal leader in the White House.

Establishment Republicans have been uneasy with Trump since well before he obtained the party’s nomination as its presidential candidate. Paul Ryan, its leader in the House of Representatives, refused to campaign for him. So did former Presidents Bush (father and son), and indeed the whole Bush family. Things got worse after November 8. Stalwart Republican writers like George Will and Michael Gerson made clear that they didn’t think Trump was a “real Republican.”

Indeed, Trump had been registered as a Democrat before 1987, when he switched to the Republicans. His positions on social issues such as gay rights and abortion aligned with the Democrats until relatively recently. Most Republicans and Democrats, as well as academic political analysts, tend to assume that Trump has no deep, ideological commitments.

However, there has been a consistency to Trump’s views. Many have seen him as an unabashed racist, a characterization he denies, but he is clearly a nationalist and a populist. While some have called him a fascist, there are differences between his views and those of Mussolini or Hitler. For one thing, the fascists of interwar Europe advocated an expansionist foreign policy. Trump has been more of an isolationist, though his “America First” slogan was originally associated with Americans sympathetic to the fascists in the 1930s. While Trump has been critical of the press, he stops short of claiming hostility to democracy, a tenet of historic fascist movements abroad. However, fascists were right-wing populists, and so is Trump.

Trump’s populism highlights a fissure among Republicans

In the 19^th century, the Republicans arose as successors to the Whig Party. The Whigs had been the party of business, the Democrats the party of agriculture. As America industrialized the Republican coalition included not only business, but also industrial labor, many of whom were immigrants. After the Civil War blacks were drawn to the Republicans as the Party of Lincoln, the President who abolished slavery. But by 1930, labor peeled off and joined the Democrats, with that party becoming an odd coalition of labor, minority ethnics (mostly Irish, Italian and Eastern European) added to the previous stalwarts of the Party, the rural South. This strange coalition of Democrats lasted for the next three decades.

The Civil Rights Acts of 1964 and 1965 made both parties more ideologically homogeneous. Southern Democrats moved en masse to the Republican Party, shifting the GOP’s center of gravity to America’s most conservative and historically racist region.

Gerrymandering

However, the coup de grace was the application of computer technology to the drafting of electoral districts. Most electoral boundaries in the US are drawn by state legislatures and rural areas are overrepresented in these assemblies. Republicans dominate more than half of state legislatures and have used their majorities to redraw districts in their favor, aka gerrymandering. The practice has been frequently used by both parties in the US for many years, but the computer applications made gerrymandering extremely precise and allow a minority of voters to dominate many US legislatures, including Congress.

The effect of gerrymandering was that in most districts Republicans no longer had to worry about the general election. The only threat to an incumbent took the form of a challenger during the party’s primary election. Voters in primaries are notoriously more extreme than those who vote only in the general elections. Turnouts are usually low, meaning that a very small constituency of extremists can dominate the party.

When the Southern Democrats became Republicans, they changed the nature of the party. Before, it was mostly middle and upper class. When its center of gravity moved south, the average income did, too. The South is the poorest region of the US. White southerners are more impecunious than those in the North or West. The Republicans’ problem was that rural white voters had few interests in common with Wall Street. Appeals to religion (especially abortion and other social issues) and jingoism served to cement the loyalties of people who had little to gain from tax cuts or deregulation. Except, of course, for regulation of guns: affection for guns was the signal for adherence to other elements of rural culture.

Jingoistic, gun loving, lower class whites became the base of the Republican Party. Primaries assured their political dominance. Trump, with his racist dog-whistles and nationalist appeals, was a natural favorite. He represents the cumulated effect of structures put in place during the last half century of party politics. Donald Trump was an unintended consequence of these trends, but he is not an accident. He may have won the election with the help of the Russians, and more likely because his Democratic opponent was unpopular with her own party, but his candidacy was a Republican affair. Trump is the natural endpoint of Republican evolution.

Europeans observe events in the United States and tremble with the familiarity they recognize from their own history. Indeed, the origins of the Trump phenomenon seem eerily similar to what lay behind the rise of authoritarianism in 1930s Europe, and to more recent politics. Yet American populism has its own roots, deeply embedded in its racist past and its peculiar institutions. This, of course, is not reassuring, but understanding the past is always instructive.