I did not write the following. It was written by historian Heather Cox Richardson who is a Professor of History at Boston College. One week ago she posted this on her blog “Letters From An American” and I am reposting it on mine. I have a fair amount of my own subscribers and I want as many people to read this historical analysis of our economic policy trends as possible.
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On Monday, Trump will release his 2021 budget. It contains $800 billion worth of cuts in Medicaid over the next decade. On January 22, in an interview on CNBC when he was at the World Economic Forum in Davos, Switzerland, when pressed on the enormous budget deficits his policies have created—he has added almost $3 trillion to the national debt– he suggested that he is considering cutting Social Security and Medicare in his second term. “That’s actually the easiest of all things, if you look,” he said. And despite his pledge at the State of the Union to protect health insurance coverage for people with preexisting conditions, his administration is currently asking the courts to repeal the Affordable Care Act (Obamacare) entirely, a decision the Supreme Court has put off until after the 2020 election.
One of the reasons the nation’s deficit and debt is soaring is that Trump’s 2017 tax cut slashed tax revenues. And rather than helping regular Americans, “the plumbers, the carpenters, the cops, the teachers, the truck drivers, the pipe-fitters, the people that like me best,” as Trump put it, 60% of the tax savings went to people whose incomes were in the top 20%.
These cuts to both social programs and taxes are the end game of a movement that started in the 1930s. It is designed to take American government back to the 1920s, when Republicans led by Herbert Hoover and Calvin Coolidge turned the government over to businessmen in the belief that they alone truly knew what was best for the country. For eight years, it seemed like this system was the best ever designed as the economy appeared to boom and some men became very rich indeed.
But the Roaring Twenties came to a crashing end in 1929, and in the introspection that followed, Americans discovered that some businessmen and financiers had been cheating, while even those who were trying to live within the law were gambling with customers’ money or taking advantage of risky schemes. Meanwhile, the economic growth of the era had not translated to higher wages for workers or better pay for farmers; all the profits from the booming businesses had gone to those at the top of economy.
Republican President Hoover assured Americans that the economy simply needed a self-correction. He refused any large-scale government programs to steady the nation, insisting that such government activism would destroy the “rugged individualism” that lay at the heart of the national character.
His Democratic opponent in the 1932 election disagreed. Franklin Delano Roosevelt offered a “New Deal” to the American people, who had had their world yanked out from under them through no fault of their own. FDR maintained that the government must step in to regulate the economy to keep businessmen from cheating and to protect workers. It must provide a basic social safety net so that Americans did not starve, and it should promote infrastructure both to develop resources and to enable all Americans to share access to the modern world. In the long Depression that followed the Great Crash, Americans embraced the New Deal programs that helped them find work, offered new Social Security for the elderly and disabled, and built new roads, schools, airports, libraries, roads, and bridges all over the country. When this newly active government went on to fight and win against the Axis Powers in WWII, popular support for the new government system was cemented.
So secure was it, in fact, that Republicans themselves adopted it. When Dwight Eisenhower entered the White House in 1953, he offered his own version of the New Deal, calling it the “Middle Way” and launching the largest public works project in American history: the interstate highways. Most Americans, both Democrats and Republicans, loved the active government. It had pulled the nation out of the Depression, won a world war, and presided over a booming postwar economy.
But some Hoover Republicans resented government regulation of their businesses, and insisted that the new system was simply a redistribution of wealth. The bureaucrats necessary for enforcing regulations and providing a social safety net would cost tax dollars, forcing wealthy men to pay for government programs that benefited poorer Americans. This system infringed on their liberty, they insisted. It was socialism.
It was not socialism, of course; socialism is a system in which the government owns the means of production. The new US system was regulated capitalism, designed to stabilize the traditional economy so it did not self-destruct again. But, calling themselves “Movement Conservatives,” these men organized to attack the New Deal government.
They had little luck convincing voters to join them in destroying the popular system. But in 1954, the Brown v. Board of Education Supreme Court decision requiring the desegregation of public schools enabled them to harness racism to their argument. Movement Conservatives harped on the idea that an activist government was using its muscle to protect African Americans. Desegregation and the programs it required to enforce, they said, cost tax dollars. Those tax dollars would come from hardworking white taxpayers to benefit African Americans. It was a redistribution of wealth that hurt white people to help African Americans.
With this appeal to racism, Movement Conservatives broke what had become known as the “liberal consensus.” Voters began to swing behind the Republican Party, with its promises to lower taxes and cut programs that sucked money from the nation’s “makers” to give it to the “takers.” Now, two generations later, the heirs of those Movement Conservatives have taken over the Republican Party, and they are in control of the government.
Because our government has regulated business, provided a social safety net, and promoted infrastructure since the 1930s, most Americans make the mistake of thinking that this system is here to stay. The New Deal government remains enormously popular. Americans like decent wages, and clean air and water, and bridges that don’t fall down, and roads without potholes. We like Social Security, and Medicare and Medicaid. Most Americans cannot fathom that anyone really wants to get rid of these things, and think Republicans and Democrats are both simply arguing over how the system is implemented.
But the opposition to this activist government is not a question of degree; it is ideological. Those currently in control of the Republican Party believe that government regulation destroys the liberty of men to run their businesses as they wish, and that a social safety net and infrastructure investment redistributes wealth, so, they believe, it is socialism. This system, they think, has turned Americans into “takers,” rather than “makers,” and it is destroying us.
Since he has been in office, Trump has advanced the goals of this ideological contingent, a practice that has surely helped to keep Republican leaders behind him. He has slashed business regulations and the government, leaving key positions unfilled and decimating departments. Now, his new budget takes on Medicaid, and his comments about Social Security, Medicare, and the administration’s lawsuit about the Affordable Care Act suggest they, too, might soon be on the chopping block.
At long last, it seems, the dreams of the Movement Conservatives are on the verge of coming true. Trump is already saying he will make “socialism” the centerpiece of his reelection campaign. But our American system is not socialism; it is the regulated capitalism that has stabilized our economy for almost a century.
