(LR) JD Vance, a Republican candidate for U.S. Senate in Ohio, and Senator Josh Hawley (R-MO) speak to reporters at a campaign rally on May 1, 2022 in Cuyahoga Falls, Ohio.
Drew Angerer | Getty Images
This column is part two of Eamon Javers’ two-part series on the new, conservative economic populism gaining ground among Republicans close to former President Donald Trump.
In the first part, Javers introduces readers to the new, conservative economic populism that is gaining ground among Republicans close to former President Donald Trump. Click here to read Part One.
WASHINGTON — The ongoing effort to define a new, conservative economic policy for the age of Trump is being driven in part by a changing understanding of who conservatives are — and what kind of policies they actually care about.
At the forefront of this shift is a cadre of economic populists who reject the political deal that gave birth to the modern Republican Party in America: combining conservative social policies that appeal to rural and evangelical voters with low-tax, laissez-faire economic policies, which is popular in corporate boardrooms.
If this effort gains traction, it has the potential to reshape both Republican and American electoral politics for a generation—but only if it is successful.
A new Republican coalition
For Sohrab Ahmari, a former Wall Street Journal writer, the goal of neopopulist economics is to reverse the hollowing out of the American middle class, which he says has led to many of the burdens on American families that fuel the anger of today’s cultural wars.
And in a Republican Party that he says increasingly represents a “reduced America,” Ahmari argues that there is a political imperative to attract a large electorate that he describes as culturally conservative but who seek greater social stability in their lives .
These voters, he argues, believe in traditional male and female gender labels but also embrace the economic benefits of the New Deal. They love social security and support unions, especially those they belong to. They want a stable financial foundation for their lives, which is not available in an economy focused on the service sector.
Former President Donald Trump’s appeal to shrink America, Ahmari argues, is precisely the reason for his electoral gains among Hispanic and African-American voters – a trend that has baffled experts inside the Beltway for months.
This also suggests that the Trump coalition in 2024 may be broader than many in Washington or on Wall Street expect.
To consolidate this new coalition, Ahmari says the conservatives must first embrace the unions, if not the political leadership of the current union movement. He envisions a rewrite of the National Labor Relations Act of 1935 to create a broad, industry-wide collective bargaining system more like a European model.
He also wants a higher minimum wage in non-union sectors – which he would achieve by strengthening regional “wage boards,” a revival of a New Deal framework that was used to negotiate wages between workers and companies.
He would push for stronger immigration restrictions, including eliminating H-1B visas, which he says are used by companies to hire “workforce” in the form of workers whose immigration status is tied to their employer, drastically limiting their skills push for higher wages.
Ahmari argues that tariffs and immigration restrictions are actually the other side of the same coin and are necessary to roll back the corporate power that has been used for decades to control the flow of goods and labor.
In this view, tariffs could help conservatives regain control of the flow of goods, while immigration restrictions could help them regain control of the flow of labor—to the ultimate benefit of American workers.
Ahmari would like to see the economy regulated under a national industrial policy – a government attempt to control the direction of the economy that has long been anathema to free-market conservatives.
“It’s important to build things,” says Ahmari. “We have learned since the Ukraine war and the pandemic that there cannot be just a service economy. If we can’t make artillery shells, masks and ventilators, we are vulnerable.”
A changing tide
Oren Cass, founder of the populist economic think tank American Compass, says this new agenda is much more than just a policy framework — it’s part of a seismic demographic shift underway in the Republican Party.
He argues that a generational shift is taking place within the Republican Party — led by a small group of young, ambitious Republican senators: JD Vance (Ohio), Marco Rubio (Fla.), Josh Hawley (Mo.) and Tom Cotton (Ark.).
The generational shift among elected officials, he tells me, is also reflected in the congressional staff, political pundits and media people who make up the base of the conservative movement in Washington.
Republican U.S. Senator Marco Rubio delivers a speech at the Conservative Political Action Conference (CPAC) in Orlando, Florida on February 25, 2022.
Octavio Jones | Reuters
“If you look at people ages 25 to 40, all the most motivated, competent, promising people to the right of center are heading that direction,” Cass said.
“As invisible as this may be to the CNBC audience, if you’re in DC for happy hour, this has already happened.”
Cass counts several respected conservative economic thinkers among his allies.
Former President Donald Trump’s entourage also includes former US Trade Representative Robert Lighthizer, who joined the board of American Compass in 2021.
Lighthizer is widely expected to take a leading role in crafting economic policy for Trump’s second term when the presumptive Republican nominee is elected in November.
The reviews
James Pethokoukis is a senior fellow at the conservative American Enterprise Institute and a proponent of old-school Reagan Party consensus economic policies.
But like Cass, he sees a Republican Party that is undergoing rapid change.
“I am deeply skeptical of this entire movement because it is essentially based on responding to voters rather than trying to develop good policy,” Pethokoukis told me in a recent interview.
“It’s economic policy that comes not from a good economy, but from politics and the culture war and the desires of your base,” he said.
One of the harshest criticisms that traditional conservatives level at this Trumpian neo-populism is that his policies are often inflationary.
At a time when high inflation has taken a heavy political toll on Democratic President Joe Biden, effectively blinding voters to an otherwise strong economy, any effort that could raise costs for consumers is likely to be seen as politically dangerous viewed.
Unlikely allies
And what else has happened is a strange bending of the political spectrum, so that the new Trump-backed populists on the right are finding common cause with the economic populists on the left.
The new conservative economists find common ground with the Biden administration on a range of issues, from industrial policy efforts like his infrastructure bill (which they say is too green but groundbreaking) to the CHIPS Act’s spending on the semiconductor industry and others.
“We must recognize that our corporate tax cut (2017) does not appear to have resulted in a significant increase in investment. But if you do a CHIPS bill, boom, you have $60 billion in investments,” Cass said.
And they like Biden’s focus on antitrust enforcement, particularly against Big Tech companies, which they see as unfair to conservatives. They also like the Biden administration’s move to eliminate non-compete agreements in the private sector that hinder workers’ ability to find better-paying jobs.
Ahmari even goes so far as to call herself a “Kahn conservative,” in reference to Lina Kahn, Biden’s chair of the Federal Trade Commission and a leading thinker on the left on antitrust issues.
FTC Chairwoman Lina Khan makes statements during the House Appropriations Subcommittee on Financial Services and Government hearing entitled “Fiscal Year 2025 Request for the Federal Trade Commission” at the Rayburn Building on Wednesday, May 15, 2024 out of.
Tom Williams | Cq-roll Call, Inc. | Getty Images
This leads to Venn diagram politics in which populists from the left and right could unite around certain issues.
This could be a welcome change for voters, many of whom say they are exhausted by constant political gridlock in a country where civil society is torn by ideological divisions.
It could also offer something more concrete: a roadmap for giving bold policy ideas legislative traction in a Trump 2 administration.
In March, for example, Vance joined forces with liberal Democratic Rhode Island Senator Sheldon Whitehouse to introduce the Stop Subsidizing Giant Mergers Act, which would end tax-free mergers and tax subsidies that senators see as increasing corporate power.
The two politicians listed the types of tax-free mergers they would like to block in the future, including Facebook’s $19 billion acquisition of What’sApp in 2014 and Time Warner’s $85 billion acquisition AT&T in 2018.
And in February, Vance raised eyebrows in Washington when he said the FTC’s Kahn was “doing a pretty good job” – rare praise from a conservative for the Biden administration.
But this praise comes in a context that is new and different in Washington and that many on Wall Street and in corporate boardrooms don’t yet fully understand.
Source link
2024-05-22 12:55:56
www.cnbc.com
