MAGA Leftism
I won‘t bore you with the political horseshoe theory, which is already well-known, and get straight to the point.
The commitment to economic freedom in the GOP is dying, and it is dying rapidly. Now this will be denied by people on the left who oppose the notion that anything Trump does or says is tantamount to a leftward shift, they‘ll stick to their preferred narrative in which the GOP is shifting inexorably to the right.
That’s false. The Republican Party under Trump has kneecapped the libertarians, ostracized the neoconservatives, mostly abandoned social conservatism (in favor of a more materialistic and secular culture war) and relegated fiscal conservatives and advocates of supply-side economics to second place in their new coalition.
The dominant feature is now undeniably nationalist populism which is, as I previously outlined, an ideological and temperamental departure from traditional American conservatism or Reaganism and a pivot towards a light version of revolutionary-populist fascism akin to Obrador in Mexico, Juan Peròn in Argentina or General Velasco in Peru.
Nationalist populists are inherently statist and collectivist and thus believe in corporatism, in syndicalism, state interventionism or state capitalism. They’re not opposed to corporate welfare here and there, but they distrust the market and free enterprise and they are especially skeptical of economic openness and global interdependencies.
Let me illustrate the economic leap to the left among MAGA Republicans who‘ve dragged most of the party with them.
- Reagan and Bush supported immigration liberalization because they recognized the value of free labor, dynamic labor markets and increased labor market participation
-> Meanwhile, Trump closed the border and is trying to bend existing laws, violate court orders and bend or break the constitution to deport working immigrants without a criminal background - in part because they‘re falsely being accused of stealing American jobs. They’re also supposedly alleviating wage pressure, thus hurting “real Americans“. Will he create new legal pathways to enter the US? Well, only if you‘re White, like the South African Afrikaner.
- Reagan passed an entitlement reform, Bush 43 tried to reform Social Security, Romney in 2012 and Jeb Bush in 2016 advocated for structural adjustments to fundamentally reform SS, Medicare and Medicaid. After 2010, Republicans also almost uniformly vowed to repeal Obamacare (ACA).
-> Trump, however, failed to repeal Obamacare and didn’t even promise to correct his failure with the new, more comprehensive mandate he got in 2024. Instead, he’s ignoring Obamacare, vowed not to reform Medicare and Social Security and refused to encourage House Republicans to agree to a substantial Medicaid overhaul. The result is likely going to be a pitiful micro-reform that wouldn’t even put so much as a dent in the cost curve of the program.
- On trade it‘s relatively obvious. Once the party of free trade and globalization, Trump‘s movement has embraced and implemented policies to promote protectionism, mercantilism, import substitution, autarky, isolation and deglobalization.
- Reducing marginal tax rates used to be a Republican orthodoxy as old as income taxes themselves. Bush 41 raised them to address the deficit and lost. Trump, on the other hand, floated an increase in the highest income tax bracket - not to address the deficit, mind you, but to alleviate pressure on Congress to slash Medicaid spending. In the same spirit he re-articulated his preference for a reform of the carried-interest tax structure. Now, residual resistance in Congress shot these proposals down as soon as they were floated, nevertheless, Congressional Republicans are now playing defense.
In 2005 Republican Congressmen blocked a neoliberal Social Security reform, proposed by their own President, whereas Republican Congressmen now have to protect Trump‘s own tax cuts from being partially reversed by their own President.
As a coup de grâce to the old Republican Party, President Trump issued an EO to intervene extensively in the pharmaceutical price mechanism, paving the way for more intrusive and distortive price controls than even the Biden administration dared introduce as part of the IRA legislation.
The WH initially tried to include a provision in the omnibus bill currently being crafted in Congress, as new price controls would require legislative action. A court will probably strike the EO down in large part and Republicans on the Hill rejected any such provision to formalize that authority.
Now you might say but he‘s slashing spending so he must be a true libertarian, fiscal conservative or neoliberal. Not so.
First of all, discretionary spending increases will likely outstrip discretionary spending cuts. Instead of fully dismantling the remainder of Biden‘s spending avalanche i.e ARPA, BIIP, IRA or the Chips Act, most of the spending won’t be repealed.
His spending cuts are more of a way to punish his enemies, to consolidate power by stripping any independent and professional government institutions of vital resources or to kill projects that are ideologically opposed by the New Right such as science, DEI programs, medical research or foreign aid. Might get some cheers but won’t address the fiscal trajectory of the US in any meaningful way.
Now, thankfully these policies are inefficient, damaging and thus unsustainable. They’ll elicit countervailing pressure and hopefully a renaissance of economic freedom, once this chapter of economic mismanagement comes to an end.
The commitment to economic freedom in the GOP is dying, and it is dying rapidly. Now this will be denied by people on the left who oppose the notion that anything Trump does or says is tantamount to a leftward shift, they‘ll stick to their preferred narrative in which the GOP is shifting inexorably to the right.
That’s false. The Republican Party under Trump has kneecapped the libertarians, ostracized the neoconservatives, mostly abandoned social conservatism (in favor of a more materialistic and secular culture war) and relegated fiscal conservatives and advocates of supply-side economics to second place in their new coalition.
The dominant feature is now undeniably nationalist populism which is, as I previously outlined, an ideological and temperamental departure from traditional American conservatism or Reaganism and a pivot towards a light version of revolutionary-populist fascism akin to Obrador in Mexico, Juan Peròn in Argentina or General Velasco in Peru.
Nationalist populists are inherently statist and collectivist and thus believe in corporatism, in syndicalism, state interventionism or state capitalism. They’re not opposed to corporate welfare here and there, but they distrust the market and free enterprise and they are especially skeptical of economic openness and global interdependencies.
Let me illustrate the economic leap to the left among MAGA Republicans who‘ve dragged most of the party with them.
- Reagan and Bush supported immigration liberalization because they recognized the value of free labor, dynamic labor markets and increased labor market participation
-> Meanwhile, Trump closed the border and is trying to bend existing laws, violate court orders and bend or break the constitution to deport working immigrants without a criminal background - in part because they‘re falsely being accused of stealing American jobs. They’re also supposedly alleviating wage pressure, thus hurting “real Americans“. Will he create new legal pathways to enter the US? Well, only if you‘re White, like the South African Afrikaner.
- Reagan passed an entitlement reform, Bush 43 tried to reform Social Security, Romney in 2012 and Jeb Bush in 2016 advocated for structural adjustments to fundamentally reform SS, Medicare and Medicaid. After 2010, Republicans also almost uniformly vowed to repeal Obamacare (ACA).
-> Trump, however, failed to repeal Obamacare and didn’t even promise to correct his failure with the new, more comprehensive mandate he got in 2024. Instead, he’s ignoring Obamacare, vowed not to reform Medicare and Social Security and refused to encourage House Republicans to agree to a substantial Medicaid overhaul. The result is likely going to be a pitiful micro-reform that wouldn’t even put so much as a dent in the cost curve of the program.
- On trade it‘s relatively obvious. Once the party of free trade and globalization, Trump‘s movement has embraced and implemented policies to promote protectionism, mercantilism, import substitution, autarky, isolation and deglobalization.
- Reducing marginal tax rates used to be a Republican orthodoxy as old as income taxes themselves. Bush 41 raised them to address the deficit and lost. Trump, on the other hand, floated an increase in the highest income tax bracket - not to address the deficit, mind you, but to alleviate pressure on Congress to slash Medicaid spending. In the same spirit he re-articulated his preference for a reform of the carried-interest tax structure. Now, residual resistance in Congress shot these proposals down as soon as they were floated, nevertheless, Congressional Republicans are now playing defense.
In 2005 Republican Congressmen blocked a neoliberal Social Security reform, proposed by their own President, whereas Republican Congressmen now have to protect Trump‘s own tax cuts from being partially reversed by their own President.
As a coup de grâce to the old Republican Party, President Trump issued an EO to intervene extensively in the pharmaceutical price mechanism, paving the way for more intrusive and distortive price controls than even the Biden administration dared introduce as part of the IRA legislation.
The WH initially tried to include a provision in the omnibus bill currently being crafted in Congress, as new price controls would require legislative action. A court will probably strike the EO down in large part and Republicans on the Hill rejected any such provision to formalize that authority.
Now you might say but he‘s slashing spending so he must be a true libertarian, fiscal conservative or neoliberal. Not so.
First of all, discretionary spending increases will likely outstrip discretionary spending cuts. Instead of fully dismantling the remainder of Biden‘s spending avalanche i.e ARPA, BIIP, IRA or the Chips Act, most of the spending won’t be repealed.
His spending cuts are more of a way to punish his enemies, to consolidate power by stripping any independent and professional government institutions of vital resources or to kill projects that are ideologically opposed by the New Right such as science, DEI programs, medical research or foreign aid. Might get some cheers but won’t address the fiscal trajectory of the US in any meaningful way.
Now, thankfully these policies are inefficient, damaging and thus unsustainable. They’ll elicit countervailing pressure and hopefully a renaissance of economic freedom, once this chapter of economic mismanagement comes to an end.
