Up From Greenwich
The New Republican Populism
JULY 26, 2014
WHEN Barack Obama won the White House in 2008, he did so in an unusual way for a Democrat: As the candidate of the rich. He raised more in large-dollar donations than any of his rivals and raked in more cash from Wall Street than John McCain. In November, he won the upper class’s votes: By 52 percent to 46 percent, according to exit polls, Americans making more than $200,000 cast their ballots for Obama.
There were several reasons for this shift, some specific to 2008 (elite exhaustion with the Bush presidency, the power of Obamamania) and some reflecting deeper trends: The Republican Party’s post-1970s gains among white working-class voters; the Democratic Party’s post-1980s attempts to shed its anti-business reputation; the increasing cultural liberalism of the affluent; and the rise of the so-called “liberal rich.”
In the wake of Obama’s ’08 victory, these trends confronted Republicans with an interesting dilemma: Should they seek to actively win back the Aspen-Greenwich vote, or embrace their increasingly populist coalition and try to rebuild from the middle out?
Across the first Obama term, they mostly tried the first approach. There was an incredibly strong populist mood on the right — hence the Tea Party’s anti-Washington fervor, the rumblings against Wall Street from figures like Glenn Beck. But the populists marched into blind alleys on policy and rallied round never-gonna-happen standard bearers, while the mainstream of the party mostly stuck to a more generic script — job creators good, class warfare bad, you built that and now the 47 percent are living off your hard work ...
Sure enough, in 2012, Mitt Romney won back the over-$200,000 vote, mostly by regaining ground in the suburbs around New York City. But what he didn’t win was the actual election, mostly because voters outside Greenwich and New Canaan decided that a G.O.P. obsessed with heroic entrepreneurs didn’t have their interests close to heart.
So haltingly at first, and then with increasing seriousness, Republicans began to look for a different path back to power — one tailored to the party’s growing dependence on working-class votes, and one designed to deliver populist substance as well as style.
Thus far they have circled around two broad approaches. One, dubbed “reform conservatism,” seeks to make the welfare state and tax code more friendly to work and child-rearing and upward mobility — through larger wage subsidies, bigger child tax credits, and a substantial clearing-out of the insider-friendly subsidies and tax breaks and regulations that drive up costs in health care, real estate, energy and higher education.
The other, “libertarian populism,” is even more zealous about attacking rent-seeking and crony capitalism, while also looking for other places — criminal justice reform, notably — where a libertarian approach to public policy might benefit people lower on the economic ladder.
These two approaches substantially overlap (with the main difference being a skepticism among the libertarians about targeting tax cuts and subsidies specifically to parents and the poor). And together, they provide the foundation on which a number of prominent Republicans — Mike Lee, Marco Rubio, Rand Paul — have built policy proposals over the last year.
Now that list includes Paul Ryan, who last week released a blueprint that folds together many of the strongest reformist and libertarian ideas: There’s a larger earned-income tax credit, proposed cuts to corporate welfare, a call for sentencing reform for nonviolent offenses, a critique of “regressive regulations” like licensing requirements, and much more.
This kind of agenda has a long way to go before we can call it the official Republican program. It could face opposition in 2016 from donors who were pretty happy with the Romney approach, and from activists who regard anything save deep austerity as a sellout to the left.
But if the G.O.P. fully embraces the ideas its younger-generation leaders are pursuing, the Democrats could suddenly find themselves in a difficult spot. Liberals can theoretically outbid a limited-government populism, yes — but given the fiscal picture, they would need to raise taxes significantly to do so, alienating their own donors, the middle class or both. And the immediate liberal critique of Ryan’s new plan — that it’s too paternalistic, too focused on pushing welfare recipients to work — harkened back to debates that the Democratic Party used to lose.
Meanwhile, Obama-era liberalism has grown dangerously comfortable with big business-big government partnerships. It’s a bad sign when even the tribune of left-wing populism, Elizabeth Warren, feels obliged to defend, against libertarian populist attacks, an icon of crony capitalism like the Export-Import Bank.
So there’s a scenario — still unlikely, but much more plausible than a year ago — in which the pattern of 2012 could be reversed: A deepening association with big money and big business could suddenly become an albatross for Democrats, and the Republicans could finally — and deservedly — shake their identity as a party that cares only about the rich.