The Populist and the Party Man

Image: Gage Skidmore

It has been an eventful two months at the Donald Trump White House. Questions about Russian involvement in the election have dogged the administration. The long-promised travel ban was announced and then swiftly struck down in court. Then a revised travel ban was unveiled, only to be defeated with even more alacrity. And, of course, the Tweeter-in-Chief continues to fire 140-character salvos online. 

With all the headline-grabbing theatrics, it is not difficult to ignore some of the more fundamental and long-term issues that the Trump administration faces. Among these is the tension inherent in the administration’s economy policy proposals. 

Trump was elected as a populist insurgent, riding on a wave of primarily white, working class discontent with a global economic order that has largely left them worse off. He found assistance in Democratic base as many doubted the depth of Hillary Clinton’s commitment to left-wing economic policy, seeing her as beholden to Wall Street interests; the transcripts of her highly-paid speeches to Goldman Sachs were as coveted (and elusive) as Donald Trump’s tax returns.

The issue for Trump is that he comes into power as a Republican with a Republican majority—the Grand Old Party has always espoused economic conservatism and is infamous for its cosiness with Wall Street and big business. 

Indeed, stock markets have been on a tear following the election, with the Dow Jones Index surpassing all time highs. Much of this rally is built on expectations of business friendly measures. Corporations are expecting lower taxes and banking stocks, in particular, have benefitted from Trump’s vow to dismantle aspects of the Dodd-Frank regulations enacted after the financial crisis. These are not things your average Trump supporter is cheering for.  

The most glaring contradiction is between Trump’s and his supporter’s views on free trade and those of the Republican party. The American right wing staunchly supports free trade and the opening of borders to the flow of goods. Anti-globalisation rhetoric is something one would more expect from Bernie Sanders and his ilk on the left wing of the Democratic Party. The Democrats have traditionally been seen as the party of the working class, a role the Republican Party is now somewhat uneasily being forced to adopt. 

It remains unclear whether the Republican Party will ultimately support Trump in his crusade against the current global trade regime. Many of the party’s legislators have spent their entire political careers trying to push freer trade, and are personally invested in creating a more globalised world. Needless to say, however, the implementation of more closed trade policy is a nonnegotiable demand of Trump supporters. 

The Dodd-Frank reforms put in place to regulate Wall Street following the Great Recession are another potential sticking point. Much to the jubilation of investment bankers, Trump has clearly stated his intention to make the rules less rigorous. Loosening government regulation is a long-term goal of the Republican Party, but kowtowing to Wall Street interests would be anathema to the vast majority of Trump supporters. 

Gutting the Affordable Care Act (ACA) was a key plank of Trump’s campaign. Happily for him, this is a goal that was shared by the Republican Party and his core supporters alike—unlike sweeteners to Wall Street, for example. The Republican’s proposed replacement bill for the ACA will, however, likely result in 20 million Americans losing health insurance coverage. 

Ideologically, the Republican party has few qualms regarding the ramifications of its bill: their stance is that the government should have no role at all in health insurance. But how will those working class Americans who turned up at the polls for Donald Trump react once they realise the very personal consequences of losing low-cost coverage? 

These are but a few of the conflicts that could emerge within the economic policy of this administration. Which path economic legislation will follow is still very unpredictable. What would be best for America? That is a complex question to be addressed another time. But what is predictable is a deeper, more serious rift between Donald Trump’s supporters and the Republican establishment—or a wholesale transformation of the Party’s ideological standing. Either way, what happens these next four years will leave a mark for a long time to come.