It’s true in some ways — but don’t count Reaganomics out. The wealthy who benefit from it, and the Republican Party that still believes in it with every fiber of its being, will never abandon it, no matter how much they might be on their heels right now. It’s an indefatigable zombie, and it’ll be back.
Forty years ago, the Republican Party fully committed itself to a theory its advocates called “supply-side economics” and critics called “trickle-down economics,” which says that the way to achieve prosperity is to focus our attention and largesse on the wealthy and corporations, who will then use what the rest of us have given them to create jobs.
Anything that impedes them from this noble task — unions that demand fair wages and working conditions, or environmental regulations, or (worst of all) progressive taxation — is an abomination. The wealthy fight those measures not for their own sake, but for the ultimate welfare of the serfs and peons whom they care so deeply about.
The other side of this coin — and the paradigm Ronald Reagan created — says that along with the benefits larded on the wealthy, government should wherever possible restrict services to the poor and shame them for needing help. The deficits created by upper-income tax cuts, furthermore, should be used as a justification for those benefit cuts. Whatever inequality results is the fault of lazy commoners who have failed to develop their bootstrap-pulling muscles.
That paradigm is indeed breaking down in part, particularly in that Democrats no longer accept that deficits are inherently bad and reducing them must take precedence over other goals. So unlike Bill Clinton and Barack Obama, Biden is simply unconstrained by deficit scolding.
He is now proposing not just an expansion of benefits directed at the great mass of Americans — health coverage, child care, a higher minimum wage — but an increase in taxes for corporations and the wealthy. Here’s how he explained it in his speech:
20 million Americans lost their jobs in the pandemic — working- and middle-class Americans. At the same time, the roughly 650 billionaires in America saw their net worth increase by more than $1 trillion. Let me say that again. Just 650 people increased their wealth by more than $1 trillion during this pandemic. They are now worth more than $4 trillion.My fellow Americans, trickle-down economics has never worked. It’s time to grow the economy from the bottom up and middle-out.
This is all true. And as long as Biden and Democrats keep their tenuous hold on power, they can make policy that reflects that perspective.
The problem is that Republicans don’t care whether trickle-down economics “works.” Which is why it will never die.
Imagine it’s 2028. Biden reaches the end of his second term, one with its ups and downs that included Democrats losing both houses of Congress. A Republican wins the White House with narrow GOP congressional majorities. What do you think will be the top agenda item?
We know the answer. It will be the same thing that was at the top of Donald Trump’s agenda, and George W. Bush’s agenda, and Reagan’s agenda: a tax cut for the wealthy.
What’s absolutely vital to understand is that Republicans don’t care whether it will produce prosperity for all, or even whether it’s good for them politically (which it isn’t). It’s the single most important ideological belief of contemporary conservatism. Whatever else they do with power when they have it, they absolutely, positively will cut those taxes.
Don’t be fooled by the new “populism” coming from certain Republicans. It’s mostly culture war fulmination with little substance to back it up. Sen. Ted Cruz (R-Tex.) may write an op-ed pledging not to take “Woke Money” from corporate PACs because they’ve taken public positions he doesn’t like. But the next time he has the chance, Cruz will work hard to make sure those same corporations are unencumbered by fair taxes, workers who can collectively bargain, or environmental regulations.
For others such as Sen. Josh Hawley (R-Mo.), any new regulation is mostly dependent on whether particular corporations have angered him. In his case, he doesn’t like tech companies because he thinks they’re mean to conservatives, so he wants to regulate them. But how much will he do that actually puts more power in workers’ hands?
The case for trickle-down economics might be weaker than ever, but Republicans won’t give it up. Ever. And they know that while they might be losing the argument, that doesn’t mean they’ll lose the next election.
They have enough other tools — the undemocratic features of our system, gerrymandering, the next culture-war flare-up, an economic downturn that could come along at the right time — that they can just go through the motions of arguing about economics, not to win the argument but just to remind their supporters of what they’re supposed to believe.
So they’ll just say “job creators” and “socialism” and “big government,” then attribute any good economic news to the last Republican president and his tax cuts, a routine they’ve been running for decades now. Believe it or not, there were some who even said that strong economic performance under Barack Obama was because of tax cuts Reagan signed a quarter-century before. They know it’s ridiculous, but they don’t care.
They just have to wait. And then whenever circumstances put them back in power, trickle-down will return.