Analysis: The New Populists – Can the Working Poor Find a Home in a New GOP? (Pt.1 )

A group of conservative thinkers have begun pushing GOP politicians to make a radical turn toward the concerns of poor and working class Americans. Republicans can win on the Democrats own turf, they say, by arguing that conservative policies will benefit those in the bottom half of the income scale, while Democratic policies and actions favor the wealthy.

Will Republican politicians take up the cause?

The pro-working class conservative message goes something like this: Big government benefits big business at the expense of the little guy. While claiming an agenda for the little guy, the Democratic Party is actually engaged in crony capitalism, corporatism, and special interest favors for political supporters.

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Cronyism creates an interdependent circle. Politicians provide favors for particular businesses, those favors provide those businesses an advantage over their competitors (or eliminates their competitors altogether), and the businesses help the politicians stay in office. These conservatives argue that eliminating cronyism will help the lower class enabling smaller businesses who do more hiring to thrive and, thus, creating more jobs.

Proponents of this working-class conservatism (in other variations called economic populism, libertarian populism, and conservative populism) include Arthur Brooks, Timothy Carney, Ben Domenech, and Ross Douthat. While they have their differences, for simplicity they will be lumped together under the label "new populists."

The new populist agenda includes eliminating preferences in the tax code, getting rid of subsidies for businesses (or "corporate welfare"), reducing regulations that hinder job creation, and breaking up the big banks.

"The game is rigged against the regular guy in America today. And it's rigged in favor of big business, the politically connected, and the wealthy," Carney wrote in a June 5 editorial for The Washington Examiner.

They argue regulations help big business and hurt small business. For example, the mountain of regulations associated with the Affordable Care Act, or "Obamacare," for instance, are difficult to manage for a small business, but a large business has the resources, due to economies of scale, to implement the project, they say. This is one reason, some believe, it was no coincidence that Walmart supported the ACA.

It is not just big banks and big box stores that engage in this type of behavior. Examples of businesses who favor regulations to avoid a competition are legion, and operate at all levels of government: restaurants support laws banning food trucks; beer companies support regulation of bottle sizes to make it more difficult for their foreign competitors to sell their product; big banks get government bailouts and special treatment by the Federal Reserve.

Whereas traditional Republicans often argue that income inequality is not a problem, the new populists disagree. The privileged and well-connected are getting richer, not because of hard work and wise business practices, they say, but because of government favors and protection.

With inequality growing, and chronically high unemployment in Obama's tenure, some of these new populists make poverty a cornerstone of their message.

In many of his writings, interviews and speeches, Brooks implores Republicans and conservatives to lead their message with concerns for the poor and the morality of the free enterprise system.

In a July interview on Fox Business, he argued that Obama administration and Democratic policies have hurt the poor. He noted, for instance, that those on the lower half of the income scale have seen their average wages fall in each of the first four years of the Obama administration.

"If we actually ... make labor markets more rigid, if we make it harder for people to start businesses, if we put regulatory barriers in front of entrepreneurs, guess who is going to get hurt? Rich people? No. Poor people are going to be thrown out of work. And the idea of big government programs to put food stamps and unemployment insurance in front of people instead of giving them high-paying jobs is a real affront to dignity," he said.

While these arguments are compelling to the average voter, one of the problems that the new populists are struggling with is that Republicans have been part of the problem. GOP politicians have been part of a system that hands out government favors to big business in return for electoral support.

This year's farm subsidy debate was a perfect example of continued GOP buy-in on corporate welfare and crony capitalism, Douthat argued. Rather than lead with a moral case for helping the poor, as Brooks advises, Republicans took the exact opposite course – they increased the farm subsidies and decreased food stamps. In essence, this meant they decided to give more money to rich people while cutting funds for poor people.

Don't be pro-business, the new populists say, be pro-capitalism, or pro-free enterprise. Douthat points to the problem in a July 12 article about the farm bill. Republicans in the House of Representatives at first decided to decouple the traditional alliance between farm subsidies and "food stamps," or the Supplemental Nutrition Assistance Program. This seemed like a good first step, Douthat thought, to reforming both the farm and food stamp programs. But then the Republicans passed the farm subsidies with only minor changes while cutting food stamps.

The problem, Douthat points out, is that these Republicans are only thinking about protecting certain interests, and not thinking about what is best for the common good.

"Practically any conception of the common good, libertarian or communitarian or anywhere in between, would produce better policy than a factionally-driven approach of further subsidizing the rich while cutting programs for the poor," he wrote.

Behaving as crony capitalists, Republican politicians are too obsessed with preventing tax rate increases for the wealthy and not concerned enough with getting rid of the market distorting effects tax preferences for the wealthy, new populists argue. But the problems with Republicans are not just with their policies, but also with their messaging. They only talk about economic growth in terms of wealth generation, Brooks complains, rather than helping those on the bottom rungs of the economic ladder.

"The trouble is," Brooks said, "those who talk about growth tend to talk about growth as if it were about the money ... growth is not about the money ... economic activity, free enterprise, a free society is about the morality of letting people in the bottom rise. ... Until we get pro-growth politicians who are pro-morality politicians for the most vulnerable members of society, those politicians are going to continue to lose and they're not going to be able to help people. ... Until we start talking about how we fight for people with growth, people are not going to listen to the basic economic message."

If the Republican Party were to take up the new populism cause, who would lead the movement? Part two will address the question, where do social conservatives fit with the new populism?

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