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Joe Biden is already positioned to be the most liberal president in America's history, if he were elected, and yet is still moving further to the left after winning the primary. Yet, the more interesting changes are actually happening within the Republican Party, as conservative populists are attempting to reshape the party away from traditional corporate-friendly economic policies.
Traditional economic conservatism has long been grounded in the secular trinity of free markets, less regulation and lower taxes. Whereas Republicans have historically embraced free trade and legal immigration as a natural expression of these principles, Donald Trump famously upended both these positions on his way to winning the Republican nomination.
In contrast with Sen. Marco Rubio, R-Fla., who championed a comprehensive immigration compromise, Trump explicitly called for limiting legal and illegal immigration to drive up wages for lower-skilled American workers and job opportunities for high-tech and other skilled workers.
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Trump has long openly embraced a more mercantilist economic approach, especially regarding China and trade deficits, and COVID-19 has created more converts for his cause.
Populists are calling for diversification from China, and reshoring of key industries like semiconductor, active pharmaceutical ingredient, and personal protective equipment manufacturing. They blame elites in both parties, government, the private sector and media for hollowing out America’s economy while personally benefiting. Populists pride themselves on looking beyond maximizing production or profits as the highest or only good. The Department of Health and Human Services has already awarded a $354 million contract to Phlow to manufacture key drugs and ingredients domestically.
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Populists are particularly alarmed about the rise of China, and see its admission into the World Trade Organization as the beginning of the end of the world order that facilitated America’s economic rise through the Cold War. There is deep suspicion that China has manipulated multilateral organizations and treaties to aid its rise at America’s expense.
Trump has threatened to cut all funding for the World Health Organization over its refusal to stand up to China, withdrawn from the Paris Climate Agreement due its stricter requirements on the American economy compared with China, and threatened not to extend the New START nuclear arms control deal with Russia unless China is included. Sens. Tom Cotton, R-Ark., Josh Hawley, R-Mo., and Rick Scott, R-Fla., and Secretary of State Mike Pompeo have echoed Trump’s tough rhetoric on China and his policies of explicitly prioritizing American interests in multilateral negotiations.
Trump’s America First approach to foreign policy extends beyond China, and recognizes the reality that other nations have been acting on behalf of their own interests all along. Trump has withdrawn from the Open Skies Treaty and Intermediate-Range Nuclear Forces Treaty, used the threat of withdrawing from NAFTA to renegotiate the trade deal with Mexico and Canada to include better terms for American companies and workers, and withdrew from the Iran nuclear deal.
Traditional conservatives should respond to populism’s growing appeal with new messaging and new policies.
Trump denies responsibility for starting trade wars, and asserts America is simply finally fighting back in economic and policy conflicts that have long been waged at America’s expense.
Beyond departing from corporate-friendly Republican orthodoxy on trade and immigration, conservative populists express skepticism toward larger companies. They are more sympathetic to blue-collar manufacturing jobs in traditional industries like extraction, steel, autos and construction than new technology companies. While Trump has approved the Keystone Pipeline, his Department of Justice is expected to pursue antitrust litigation against Google this summer. Attorney General William Barr has repeatedly criticized Apple for refusing to unlock iPhones after terrorist attacks, and Hawley has called for breaking up Facebook.
In contrast to calls for a universal basic income from wealthy tech titans, populists elevate the nobility of work over consumption and thus share traditional conservatism’s skepticism toward welfare transfer payments.
Despite their misgivings about welfare, populists are less worried about deficits or cutting government spending. They are more open to making common cause with progressive Democrats than centrist Democrats, viewed as corporate shills, on particular issues benefiting deserving working-class Americans.
For example, Hawley and Rep. Pramila Jayapal, D-Wash., have authored similar proposals for the government to directly subsidize furloughed workers, and Rubio and Ivanka Trump have championed tax subsidies for paid family leave.
Populists are also less averse to government picking winners and losers among companies, e.g., Huawei, to compensate for cheating by other countries and promote national security. Trump moved these themes to the center of the debate, but sometimes does not go as far as his followers. For example, Hawley wanting to withdraw from WTO or allow folks to sue China.
Because the rise of populism within the Republican Party both predates Trump and will outlive his administration, traditional conservatives should respond to populism’s growing appeal with new messaging and new policies.
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Too often, traditional economic conservatives have been playing more defense than offense, hoping populists won’t make common cause with Warren on financial market regulation. They need to better explain why American capital markets are an incredible advantage in global competition, and how efficient capital allocation drives innovation, growth and job creation.
First, they must contrast the free market system with the alternative command and control, top-down systems that result in less freedom, less growth, and ironically more power for larger established companies, elites and unelected bureaucrats.
Second, they must recognize blind adherence to free trade and laissez-faire capitalism platitudes are not sufficient and these systems must be protected when others attempt to undermine their foundations. This does not mean they must embrace the liberal position of larger government, but rather insist on fair markets both domestically and internationally.
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Third, rules designed to facilitate trade between free-market democracies following the rule of law must be modified in the face of Communist China’s theft of intellectual property and artificial barriers preventing foreign access to its markets. Conservatives’ natural tendency toward deregulation must not be manipulated to allow large tech companies to abuse their market dominance to selectively enforce the same rules of conduct on conservatives that they do not want to accept for themselves.
Traditional conservatives must incorporate the populists’ genuine concern for working-class Americans before it is too late, but do so without abandoning their core conservative principles.