The Economic Agenda
Wealthy interests seeking shelter against political change bolster the party of Trump
Maybe you’ve noticed that third party candidates have had little trouble attracting deep-pocketed donors this cycle.
No Lables, the group that wants to run a “unity” candidate against Biden and Trump, refuses to reveal its donors, but enterprising journalists have been able to uncover some of them. They include a healthy share of billionaires and corporations with past links to Republican candidates, including Harlan Crow, whose selfless generosity allows Clarence Thomas to live in luxury.
The right-wing Crow also made a large strange-bedfellows contribution to Cornel West, who is running a far-left independent campaign. West defended the gift, then returned it.
Crow and his wealthy comrades surely know that West and a No Labels candidate will never see the inside of the Oval Office, but they pose a spoiler threat to Joe Biden in a close election. With Republicans likely to re-nominate Donald Trump and with Trump’s support maxing out well below a majority, shaving points off Biden’s margin is the only way for Republicans to be competitive.
It should come as no surprise that some wealthy interests support this outcome. They fear the personal price of political realignment.
We have talked a lot about how the social forces realigning our politics have driven portions of the Republican electorate to embrace Trumpism in an attempt to derail the demographic changes that are bearing down on historically privileged groups. As the diverse Millennials and Generation Z supplant the receding older generations, they threaten the traditionally privileged place of white male straight Christians.
What’s happening with the uber-rich represents the reaction to changing political tides by the small elite group that once wrote the checks for Reaganism and helped finance the bipartisan embrace of neoliberalism. They may not be animated by the social threats that scare the Republican base, and for that reason they may not embrace Trumpism, but many are just as determined to protect their privileged place in the economic order.
Theirs is the other agenda propping up Republicans.
Some wealthy interests . . . fear the personal price of political realignment.
And their concerns are not unfounded. The Biden administration’s bottom-up approach to economic policy upends the decades-old bipartisan consensus about taxing and spending which has dramatically benefitted those at the top. If the generational realignment we are experiencing isn’t interrupted by an authoritarian detour, this is a harbinger of things to come.
Future Democratic administrations are likely to heed the demands of their supporters and advance policies that chip away at the advantages enjoyed by the super wealthy. Republicans are not.
We have been heading toward this moment for a long time. To understand it, let’s (briefly) go back ninety years.
The Great Depression was the catalyst for a political realignment that ended seventy years of Republican dominance in national politics, leading to the establishment of what we now call the welfare state.
During the New Deal era, Democrats from FDR to Lyndon Johnson built and preserved their majority status by providing voters with programs and public works that made their lives easier and more secure.
These government initiatives were supported by tax dollars, but that wasn’t an issue because people largely trusted the government and enjoyed the benefits they received.
This arrangement broke down in the 1960s and 70s amidst the divisiveness of Vietnam, the political corruption of Watergate, the Democratic party’s embrace of a racial justice agenda, and ultimately high inflation and stagnant wages. The pendulum swung to the right.
Our politics realigned again.
The New Deal was replaced by Reaganism, which positioned “big” government as the enemy and placed tax increases out of bounds. The political consensus of the previous fifty years—that people want government programs and are willing to pay for them—was marginalized, then rejected outright.
Democrats were slow to recognize what was happening. Thinking the New Deal arrangement was still in force, Walter Mondale accepted the 1984 Democratic presidential nomination by promising to raise taxes. He lost 49 states.
Reaganomics imposed a political logic that foreclosed the possibility of undertaking liberal initiatives. Making tax increases politically toxic denied liberals the fuel for government programs, and tearing down faith in government—an easy exercise after the turmoil of the 1960s and 70s—removed the appetite to try.
The high deficits generated by Reagan’s policies were subsequently used to block further spending, and raising additional revenue to address budget imbalances was politically unacceptable. If the economy was slow, Republicans would argue that tax increases would make it worse. If the economy was humming, they contended that tax increases would make it stall.
And when the economy crashed in 2008, the consensus was those who caused the crisis had to be bailed out.
Forty-plus years after Reagan’s election, we are once again at an inflection point.
During the Biden administration, Republican arguments that were persuasive during the Reagan era have started to break down. Much like Democrats in the 80s, Republicans are finding themselves on the defensive.
Case in point: IRS funding. For decades, the IRS had been so badly underfunded that it had essentially abandoned auditing wealthy people—which while just fine for wealthy people was quite costly to the government.
Future Democratic administrations are likely to heed the demands of their supporters and advance policies that chip away at the advantages enjoyed by the super wealthy. Republicans are not.
Unlike his immediate predecessors, Biden made IRS enforcement a priority and he secured an $80 billion increase in IRS funding when Democrats controlled congress.
When Republicans took back the House, they made repealing this increase their top priority—even though their argument for doing it makes no sense because it costs the government money. Every dollar spent on audits of the top 0.1% generates six dollars in revenue.
And they really want to repeal this policy. Republicans made it a top demand in the debt ceiling negotiations. And they’re still pressing for further rollbacks.
But look at how the politics has changed. Not only is Biden willing to prioritize IRS enforcement, old Reaganesque arguments against it ring hollow as Republicans are exposed as defenders of the richest of the rich.
I don’t mean to suggest that we are on the verge of a socialist paradise where wealth disparities will be flattened. The very wealthy will do fine within the economic parameters of a new political alignment.
But because they are unlikely to be able to call the shots the way they did in the Reagan era, they can be expected to use their outsized clout to combat change with as much vehemence as MAGA Republicans resisting a diverse America.
If what we used to call normal Republicans were viable nationally, it’s not hard to see how they would be the beneficiaries of wealthy interests looking to hold back the changing tide. But if MAGA provides the only viable defense of Reagan-era privilege, that’s where financial support will flow.
The super rich will view whatever danger MAGA Republicans pose to the republic simply as collateral damage. And that is a great danger to us all.