Trump's New Neoliberalism


The passage of the Tax Cuts and Jobs Act has refuted any notion that Trump’s ascension to the White House would mark an end to neoliberalism. Poor whites who supported Trump expected him to offer America a new version of conservativism that would break with neoliberalism. Instead, furthering neoliberal policies has become a critical objective that works in tandem with Trump’s xenophobic rhetoric

With the passage of the Tax Cuts and Jobs Act, President Trump secured his first major policy victory. Despite their federal dominance, the Republican Party has proven to be legislatively constipated. Below the surface of party unity, sectarian differences between the competing strains of American conservatism have hindered it from taking advantage of its historical positioning. Nevertheless, tax cuts proved to be a workable common ground that Trump was able to take advantage of. While commentary of the passage has tended to focus on this Republican unity, the most significant aspect of the Act’s passage is the refutation that Donald Trump’s ascension to the White House would somehow mark an end to the era of neoliberal economics. Furthering neoliberal policies has not only been an aspect of Trump’s agenda but a critical goal that works in tandem with his xenophobic rhetoric. Far from being opposed by the Bannon faction of Trump’s coalition, neoliberalism has provided a comforting aerie for their fascist inclinations to develop. Through neoliberal rationales, they are able to reach many of their social objectives even if they fall short of their policy goals.
The belief that Trump would alter American conservativism away from neoliberal economics is not without its basis. In a bizarre case of enveloping ironies, Trump’s presidential campaign was successful in portraying him as both a billionaire business wizard and as an example of an American everyman. He advocated for “draining the swamp” of corrupt Wall Street executives, while at the same time paraded his practice of tax evasion has an example of his shrewd financial acumen. The incompatibility of these two personas is obvious, but it has a certain appeal within the context of America’s poor whites. Poor white Americans are both spiteful toward and enamored by capitalism. They are spiteful because it retards their own social mobility, but enamored with it because it provides a basis for their own privilege over racial minorities. Unlike their counterparts among racial minorities, poor whites do not consider themselves poor by class, but poor by temporary misfortune. They are not poor per se, but rather down-on-their-luck millionaires whose are unjustly treated by liberal elites and coddled minorities. For these people, Trump represented an enchanting example of uncouth success. The fact that he was crass and despised only reinforced the notion that it is not connections and education that made a person wealthy, but hard work and an intuition for affluence. Culturally speaking, these are traits are considered innate to white Americans. Of course, to believe this mythology, many of Trump’s low-class acolytes were only willing to support his campaign under the pretext of an unspoken bargain: they would ignore the reality that his wealth was inherited and not earned, and he would refrain from the usual Republican claptrap about the virtues of privatizing Social Security and Medicare. That way both partners could remain comfortable in their delusions that all their current and potential future wealth was a product of their own doing. The result of this unspoken bargain was that Trump was supposed to offer America a new version of conservativism. The marriage between neoliberalism and Christian nationalism that neo-conservatives pursued during the George W. Bush era was going to experience a soft separation under Trump. The pursuit of neoliberalism policies would be relegated in importance, if not abandoned completely, and there would be doubling down on Christian nationalism, with a tripling down on the nationalist element. Unsurprisingly, the passage of the Tax Cuts and Jobs Act reveals that Trump is ready to renege on his end of this bargain with the hope that poor whites will still be willing to keep up their end.

Astute observers saw this betrayal coming. The argument that Trump would somehow overturn America’s neoliberal economic order myopically focused on Trump’s trade policy. In doing so, it both misunderstood what Trump represented and the ideological framework of neoliberalism. Trump’s fever pitch agonizing over the United States’ trade deficit with China and Mexico are both the wallowing of an economic idiot and the maneuvering of a political savant. The issue was always economically inane. A trade deficit in-and-of-itself reveals very little about the overall health of an economy. Whether a nation should strive for or against a trade deficit is more dependent on that nation’s strategic position within the global economy, and not necessarily an indicator of the health of domestic markets. But, trade proved to be a salient issue for symbolic purposes. Stagnation and automation have compelled American middle and lower classes to accept an economic torpor. Making trade deficits a central campaign tenant provided these people with an outlet for their class anxieties without having to question the nature of class itself. Lethargic economic growth was blamed on Mexicans and the Chinese. The insinuation was for average Americans to take back what was rightfully theirs by engaging in a new round of economic bargaining with these two nations, if not an open trade war. 

While Trump’s criticism of Mexico and China seemed to imply an undoing of international market liberalization and a return to an age of greater protectionism, in reality, Trump very rarely recommended such policies. Instead, he made vague references to “good people” who will make “good deals” for American workers and openly preferred lowering America’s corporate tax rate in order to encourage businesses to reinvest in the United States. The first proposal was always understood as meaningless. Its value was in showmanship. A person can hoodwink the world into thinking that they are a genius just by referring to everyone around them as a moron. However, the second proposal not only does not overturn the reigning neoliberal order, it strengthens it. As the latest tax bill has shown, Trump is dedicated to weakening the ability of the government to extract wealth from the rich. This supreme goal takes priority over the Republican gospel of balance budgets. The deficit be damned if preventing it smacks of any hint of expropriation of the wealthy. But, the deficit is not entirely damned. It is an open secret that Republicans are salivating for a fiscal crisis that will provide them with a pretext for cutting Social Security and Medicare. It was only a matter of time before Trump’s administration wholeheartedly joins them.

The fact that the real potential for cutting favored government programs has not resulted in the same outcry among Trump’s supporters, even among low-class demographics, as his suggestion that he might soften his position on immigration is a grave concern. Social Security and Medicare are extremely popular in the United States among poor and working people regardless of ethnicity and political ideology. Nevertheless, tolerance for their obliteration has become palatable to the majority of white Americans. In 2004, journalists John Micklethwait and Adrian Wooldridge published their exhaustive history of the American Right, The Right Nation: Conservative Power in America. At the time, Michlethwait and Wooldridge could accurately claim that “in no other country is the Right defined so much by values rather than class… Yet despite the importance of values, America has failed to produce a xenophobic ‘far Right’ on anything like the same scale as Europe has." A little over a decade later, Michlethwait’s and Wooldridge’s observation has become obsolete. Trump is inept at policy and governance, but he is a skilled mobilizer and has managed to shift the American Right into a new direction. The United States now has an Americanized version of European style far Right politics, and its xenophobic ambitious has come about through a constant assertion of neoliberal values.

Trump has not only furthered the neoliberal doctrine of privatization, but also that of the economization of everyday life, and specifically, the economization of American racism. While fear of cultural differences between “the west” and “the rest” has always been front and center for the Bannon wing of Trump’s coalition, more tactical voices find economic justifications for their xenophobia: immigrants steal jobs, freeride on welfare benefits, and don’t pay taxes. The image that emerges when these talking points converge is a political system enamored with quantifying and dispensing material goods between those who deserve and those who do not. For most modern conservatives, opposition to immigration is not based on an open fear of differences; rather, it is a feeling that immigrants, especially undocumented immigrants, are unwilling to accept a free market economic system that treats all Americans on fair and equal terms. Unlike average Americans, who work hard and thus deserve their market remunerations, immigrants—and by implication other minorities—rely on a mixture of government handouts and liberal acquiescence to the rules. Immigrants cash their welfare checks because liberal elites look the other way on law enforcement. This worldview suggests that the government should not only be redirected to strenuous law enforcement but also that it should not be in the business of providing society with social welfare in the first place. Doing so only creates an impetus for illegal immigration and lazy minorities. In this manner, Bannon’s cheerleading of “economic nationalism” was always a rhetorical mirage. Understood in proper terms, “economic nationalism” is best described as “market statism”—where, in Milton Friedman’s words, the purpose of the state should be “to preserve law and order, to enforce private contracts, to foster competitive markets” but nothing else.

There is no fundamental difference in the terms of the realpolitik outcomes between Friedman’s neoliberalism and Bannon’s economic nationalism, even if they begin from separate economic philosophies. The only difference is in what should be considered preferable within market configurations. In Capitalism and Freedom, Friedman emphasizes his personal objections to racist ideologies but sees no need for a government to ensure racial equality. According to Friedman, racism is to be overcome through individual argumentation, not political struggle; it is the changing of tastes within the marketplace that will provide the liberation of ethnic minorities, not the paternal hand of the government preventing discrimination. Friedman’s de-politicizing of racial anxieties to mere matters of “taste,” provides an opening for those—like Bannon—who are eager to engage in a culture war, but are well aware of the potentially alienating effects of actually taking up arms. If racial discrimination is only a matter of “taste,” similar to other desires within the marketplace, then the maintenance of white supremacy is predicated on its profitability. As long as whiteness can maintain its social hegemony, then Friedman’s governmental obligations “to preserve law and order, to enforce private contracts, to foster competitive markets,” will serve to reinforce it. The neoliberal economizing of American racism allows for many of the effects of white supremacy without necessarily the adoption of any of its core premises. Trump’s coalition of white nationalists and free-market ideologues thus become comfortable bedfellows, even while maintaining a rhetorical mistrust of each other. 

The question is can Trump maintain his coalition of realigned conservatives in time for the next election cycle? While his low polling numbers and recent Democratic Party successes are encouraging, they are not foolproof. The destabilizing of the narrative on American racism can only occur through a refusal to accept the economization of the debate. The exclusion of racial minorities from social welfare and the utter bureaucratic madness of the United States’ immigration policies have a moral dimension that has to take precedence over concerns regarding job stealing and tax burdens, no matter how fallacious such arguments are to begin with. Expecting the Democratic Party’s leadership to play a leading role in this de-economization of the debate is not impossible, but unlikely. Along with Republicans, Democrats have been complicit in the framing social issues in relations to the economy, and the economy as merely working in the service of private interests. Only recently has the leftwing of the Democratic Party been organized and energized enough to counter this influence and return the party to its New Deal orientation. Whatever its limitations, Roosevelt’s “freedom from want” provides a moral framework for economic policy. It is a reasonable and familiar starting point to break with a neoliberal credo that economizes all morality within a capitalist framework.

While the left-wing of the Democratic Party has seen tremendous progress, it is still far from overturning the organization’s centrist leadership. In many ways, the passage of the Tax Cuts and Jobs Act is a painful reminder of how weak the American Left is once Republicans are able to stay united. Like with the repeal of the Affordable Care Act, the Tax Cuts and Jobs Act is extremely unpopular. The trickledown theory of economics that the act is based on is rightly seen a convenient canard for the rich. So much so, that it has been reduced to a cliché joke among late night talk show hosts. With the exception of Fox News, the mainstream press has frequently commented on the nearly universal consensus among economists that the Act will result in a massive transfer of wealth to the upper class. Intellectually, there is no place for defenders of the Act to hide. However, unlike opposition to repealing the Affordable Care Act, opposition to the Tax Cuts and Jobs Act has been somewhat muted. While Americans still are seething from the injustices of the 2007-2008 economic collapse, ten years on, they still have not found a tangible political venue to express their frustrations. This means that regardless of the outcome of the next election cycle the American Left is going to have to play a persistent role creating a meaningful outlet for people's dismay, and fostering a political discourse that recognizes that the Trump phenomenon is rooted in the neoliberal age that preceded it. The dangerous tantrum-prone child of Trumpism will only be forced off the playground when its neoliberal parents no longer own the park.