America's real problem is immense... and hiding in plain sight.
The Road to Respectability 1950-1980
The Trojan Horse
Most of us are familiar with the story of the Trojan Horse. After a decade spent trying to capture the city of Troy the Greeks appeared to abandon their siege, leaving behind an enormous wooden horse— the symbol of the city— to commemorate their loss. Once the Greeks were out of sight, the Trojans rushed out to seize the horse and drag it back into the city. That night a handful of soldiers, led by the warrior Odysseus, emerged from the wooden horse and unlocked the gates of the city. The Greek forces, who were hiding nearby, stole in under the cover of darkness to capture the city.
Today the term ‘trojan horse’ is used to describe any attack by which outside actors or forces are able to infiltrate and subvert an organization using deceptive means. This is precisely what has happened to the Republican Party.
A Balanced Budget
A bedrock principle of American conservatism is to balance the federal budget and eliminate debt. Yet since the 1980’s Republican politicians have embraced deficit spending in order to fund tax cuts that exclusively benefit the wealthy elites. The result is a steadily-widening wealth gap between the richest Americans and the rest of us.
According to this report, in 2017 the 25 wealthiest American billionaires had as much combined wealth as the bottom 56% of the population—a group that consists of more than 70 million households.
This wealth disparity has only increased in the wake of the Trump tax cuts—and promises to widen further during the Covid-19 crisis. With almost no accountability the federal government is pumping trillions of dollars into large corporations and giving millionaires yet another massive tax cut. This will cost U.S. taxpayers an estimated $90 billion in 2020 alone, yet 99.999% of Americans will see no benefit from it. Instead, we are sent only enough of our own tax dollars to cover basic expenses for a couple of weeks.
Conservatives believe that individual liberty is our most sacred right. Our nation’s founding was a rejection of aristocratic and monarchical government, based on a guarantee of liberty and justice for all. Yet today this country is controlled by a billionaire aristocracy—one largely established through inherited wealth.
Personal freedom and a balanced budget are still touted by Republican leaders, of course, because these ideals are still valued by conservative voters. But the party’s economic policies fly directly in the face of these ideals-- and have for some time. So how has today's Republican Party moved so far from its original moral foundations?
It was a trojan horse called "neoliberalism" that enabled this stealth takeover of the once-Grand Old Party.
The first meeting of the neoliberal elites. (photo: Mont Pelerin Society)
It began with a tiny group of intellectual elites, who met on a corporate-funded junket to Switzerland in 1947. They took an entirely hypothetical economic theory-- with no real-world data to support it-- and insisted that it would lead to more individual freedom and improved economic outcomes for any society that embraced it. This doctrine came to be known as free market fundamentalism.
For thirty years this group, well-funded by wealthy elites, toiled at the fringes of conservatism. They called their ideology “neoliberalism”, and it was roundly rejected by leading conservative intellectuals like William F. Buckley, Jr. and the Republican establishment, including Presidents Eisenhower, Nixon and Ford.
But during the 1950’s and 60’s the neoliberals found unlikely allies in Southern Democratic voters, who were adamant in their opposition to public school desegregation and civil rights for black Americans. Free market fundamentalism rejected governmental control over nearly every aspect of society, and so neoliberal economists like Milton Friedman were able to make eloquent arguments against racial justice for black Americans, wrapped up in economic terms that made subjugation sound like freedom, and equality sound like governmental oppression.
The Southern Strategy
Barry Goldwater was the first Presidential candidate to embrace neoliberalism—and its accompanying opposition to the Civil Rights Act of 1964—and although he suffered a crushing defeat to Lyndon Johnson he managed to flip the Deep South from blue to red, thereby creating a path to victory for every Republican President that followed.
Volumes have been written about the “Southern Strategy”, and the way that Richard Nixon used it to win the White House in 1968. But Nixon was a traditional Republican—one who believed in established Keynesian economic theory and saw an important role for government in the lives of average Americans. Nixon championed health care reform and started the Environmental Protection Agency, concepts that were abhorrent to the neoliberals.
The Reagan Revolution
It wasn’t until the election of Ronald Reagan that the free market fundamentalists were able to take control of the American economy. The neoliberals proffered unscientific 'common sense' theories like the Laffer Curve, and dubbed their approach “supply side economics.” Traditional conservatives like George H.W. Bush, who famously referred to this untested, unproven and radical economic approach as “voodoo economics” during the 1980 campaign, pointed out that there was no evidence to support this theory. Yet during the Reagan era deficit spending and slashing taxes on the wealthy become the fundamental, overriding economic ideology of Republican politics. Wealth disparity soared, and began the unprecedented split between rich and poor that continues to this day. And most other conservative beliefs, from protecting the environment to defending personal liberty and the health of citizens, realigned themselves to fit within the rigid boundaries of free market fundamentalism.
Neoliberalism had crept into the GOP and gutted its foundational principles from within.
The Great Communicator discusses neoliberal economics. (WSJ)
PART 2 of The Trojan Elephant continues here.