Trump And The Failure Of The Reagan Revolution

Who would have thought that the one underlying issue that Donald Trump and Hilary Clinton agree on is the catastrophe of the Reagan Revolution and, with it, the failure of America's democracy to respond to the negative effects of globalization.

Both Clinton and Trump are now busy out-bidding each other to overturn Reaganism, if not in name than in practice, to determine how the government can best jump-start the parts of the economy that have been left behind and damaged by globalization. On August 2, Trump even stated that he would "at least double" what Clinton was planning to spend on infrastructure. This so-called doubling is equal to about half a trillion in new government spending. And Trump went on that he would fund this by the most un-Reagan of actions, with new debt, rather than by cutting the budget in other areas. But why did it take the eruption of Donald Trump and hamlinesque appeal of Bernie Sanders for both parties to recognize that there is a major problem that requires government action?

During previous periods of severe economic change and disruption, the American government expanded its powers to adjust to situations that could have never been foreseen in 1789. In the late 19th and early 20th centuries when it became apparent that America's industrial revolution was mutating from an engine of spectacular economic growth into a monopolistic vehicle threatening America's basic democratic principles, Theodore Roosevelt, William Howard Taft and Woodrow Wilson expanded the role of government to corral the forces created by the industrial revolution. Broad changes such as the Interstate Commerce Commission, The Federal Trade, Commission, The Food and Drug Administration, the IRS and the Federal Reserve were introduced both to limit the power of monopolies and to try to correct the abuses of the gilded age. And during the New Deal, a safety net was created for the industrial worker.

So why was there no government response when globalization threatened the livelihoods of so many Americans? Political economists use the term "path dependency," to essentially mean that history matters and influences future decisions. And the Reagan revolution did just that: it established a new path, a new view of the role of government in American life. With its inversion of parts of traditional Republican philosophy away from its Hamiltonian and Whig roots to the Jeffersonian concept of limited government, it created a political environment that not only rejected government intervention but saw it as harmful to our democracy. This view was celebrated with slogans such as, "the government that governs best governs least," or Reagan's quip that "the most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"

The post World War II / Cold War Republican Party had been the party of economic conservatism but not necessarily the party of limited government. As an example, under the Eisenhower administration the Interstate highway system was created while under the Nixon Administration the Environmental Protection Agency was created and the Clean Air Act was passed. In addition, Nixon championed the idea of revenue sharing where the federal government would be the aggregator of funds and then would pass those funds to the States, believing that local jurisdictions could solve the problems more efficiently and with less red tape. Revenue sharing did not mean that government did not have a function in solving problems it was a vehicle in the Nixon's administration view to rebalance federalism. The State and Local Assistance Act of 1972, the official name for Nixon's revenue sharing, had distributed to the States over 83 billion dollars before Ronald Reagan eliminated it in 1986.

Reagan saw the role of government and its relationship to the individual very differently than Eisenhower and Nixon. As the Heritage Foundation reported on January 20, 1981 in commenting on Ronald Reagan's First Inaugural Address: "Reagan presents himself as a follower of the Constitution. "Our Government," he emphasizes, "has no power except that granted it by the people. It is time to check and reverse the growth of government which shows signs of having grown beyond the consent of the governed." The old Constitution, with its restraints and emphasis on limited government, allows individual freedom to work for the common good. "In this present crisis, government is not the solution to our problem; government is the problem."

But the problem with this view which even today still resonates within the current Congressional wing of the Republican party, is that it fails to appreciate that there are collective world-wide forces such as globalization that are more powerful than most individual's power to respond. Forces that, if left unchecked, can damage the very balance that makes up our democracy.

In addition to establishing the philosophical construct that limited government is a more important value than protecting Americans from the harshness of a rapidly changing economy, the Reagan revolution substantially expanded the traditional Republican base by attracting the so called Reagan democrats. These new Republicans were and are white working class voters primarily from the Midwest and northeast who deserted what they saw as a Democratic party that had grown too liberal. The Reagan Democrats, following on the inroads that Nixon had made with the "Silent Majority," would spearhead a blue-collar movement of middle and working class White people -- especially men -- into the GOP.

These people however would also be the ones most negatively affected by globalization. And Donald Trump's appeal to these people, the people left behind by the changes in the American economy defines both the major contradiction and failure of Reaganism. For as long as the Reagan Democrats' prime issues were social, it was easy for the Republican Party to if not directly respond to their needs, to placate their needs. But once the needs of these voters were economically based, and required government action, the path that would have enabled such action had been foreclosed by the very revolution these people had joined.

Edward Goldberg is an expert on globalization and how geo-economic/political events shape our lives. He teaches international political economy at New York University's Center for Global Affairs. He is also a Scholarly Practitioner at Zicklin Graduate School of Business, Baruch College where he specializes in globalization. His new book, "The Joint Ventured Nation: Why America Needs A New Foreign Policy" will be published this fall by Skyhorse.