A brief history of "economic patriotism"
One of the first mentions of the phrase in the American press comes from an unlikely source on an unlikely topic. In a 1985 defense of then-President Reagan's Star Wars missile defense system, William Safire wrote that a "common denominator" among the American people was "nationalism -- both a military and economic patriotism -- which inclines us to the side of pervasive national defense."
Safire's meaning, simplified: Economic patriotism is being proud of military investment.
Two years later, the Miami Herald interviewed John Bohn, head of the Export-Import Bank (speaking of things being in vogue). "To him," the paper wrote, "a push toward exporting isn't just a good idea. It's an example of his favorite phrase -- 'economic patriotism.'" Bohn explained: "It means being conscious of our role in the international economic system, and the impact of what we do in this international economic system," he said.
Bohn, simplified: Economic patriotism is recognizing the U.S. as a distinct part of the world economy.
When Democratic Massachusetts governor Michael Dukakis ran for president in 1988, he seized on the phrase, bringing it to national prominence. "Dukakis delivered a message of 'new economic patriotism' to American workers today," the New York Times reported in 1988, "and took the Reagan Administration and Vice President Bush personally to task for rising interest rates and falling family incomes."
Dukakis: Economic patriotism is keeping the middle class strong.
Dukakis's argument didn't work. But that didn't prevent former Massachusetts senator Paul Tsongas from picking it up in time for the 1992 Democratic primaries. "By promoting what he called 'economic patriotism,' Tsongas insisted that he was not advocating protectionism but seeking a 'mindset of economic nationalism'," the Boston Globe wrote in 1995. (Bush helped dismantle Dukakis's use of the term by calling it protectionist.) "To a number of questions on the subject, his theme was that American consumers should give American produced products the benefit of the doubt over foreign competition."
Tsongas: Economic patriotism is buying American. Tsongas's argument didn't work either.
In 1996, Pat Buchanan demonstrated that the vagueness of the term made it happily bipartisan. In his conservative challenge to eventual Republican nominee Bob Dole, Buchanan declared that Clinton "sold out our workers" in approving a free trade agreement with Canada and Mexico.
Buchanan: Economic patriotism means protecting jobs at home.
Though he lost the nomination, Buchanan declared victory within the party, as the Post reported in August 1996. "Whole sections" of the party platform, including economic patriotism, were "right out of the speeches of Pat Buchanan," he said. "Friends, there is so much of ours in that platform that we've decided to ask Haley Barbour [then chairman of the Republican National Committee] for royalties."
The phrase moved overseas for a decade or so, being picked up in Europe and Australia. (As we said, it's very utilitarian.) But in 2012, thanks in part to the fact that Barack Obama was running for reelection against the very wealthy Mitt Romney, it returned. Former Ohio governor Ted Strickland (D) said Romney has "so little economic patriotism that even his money needs a passport." And Obama used the phrase directly in a key ad produced for the race, and released a policy booklet that used in its title the exact phrase first used by Dukakis. "Are we going to double-down on the top-down economic policies that helped get us into this mess?" Obama asked on the campaign trail. "Or do we embrace a new economic patriotism that says America does best when the middle class does best?"
The new push for "economic patriotism"
So: Economic patriotism is when the middle class does best, according to Obama.
In 2012, that meant things like the Buffett Rule, which limits corporate incomes. In the more recent formulation of his Treasury secretary, though, it means preventing corporate tax inversion. As every member of the middle class surely knows.
Let's assume, though, that you're in the 99.9 percent minority of the country that doesn't know what corporate tax inversion is. Democrats on the House Ways and Means Committee summarize it as when an American company aims to "avoid U.S. taxation by combining with a smaller foreign business and moving their tax domicile overseas," which is as good a definition as any. We're all familiar with businesses that use foreign tax shelters to avoid paying taxes -- a study from Sen. Ron Wyden (D-Ore.) earlier this year put the amount of sheltered profits at $2.1 trillion -- but this is a step further.
Take Accenture. It was once Andersen Consulting, an offshoot of Arthur Andersen that originates from a 1953 feasibility study for GE in Kentucky. But today, Accenture is incorporated in Ireland, after having been briefly a Bermuda company thanks to a 2001 inversion.
Ways and Means Democrats, who have introduced legislation opposing the practice, documented the number of corporations that it says have used inversion to become foreign companies, including Accenture. It looks like this, not including seven companies the committee says reincorporated between 2009 and 2014.
In a letter to the full committee, Lew derided the practice. "The firms involved in these transactions still expect to benefit from their business location in the United States," he wrote
, "with our protection of intellectual property rights, our support for research and development, our investment climate and our infrastructure, all funded by various levels of government." Ergo: "a new sense of economic patriotism."
Lew: Economic patriotism is not merging your corporation with a foreign corporation in order to reduce taxes, and so on.
The upshot is this. "Economic patriotism" is a phrase that means simply, "an economics-related thing that is contentious and which possibly be framed as being un-American." Lew's formulation is a recent iteration. But don't get too comfortable with his definition. It will shift.