It’s Time for Free Market Populism

This is the eighth and final contribution to ISI’s symposium Conservatism: What’s Wrong with It and How Can We Make It Right?

Fairfax County, Virginia, was the second-richest county in America in 2012. The median household income was $105,000. Langley High School, a public school in the shadow of CIA headquarters, is so tony that some local parents shell out for private schools so their kids will experience more diversity in school. Half of all Fairfax houses are worth $500,000 or more. Two-thirds of households have two or more cars.

On election night 2012, I hunkered down in the Fairfax County Government Center to catch precinct results as they came in. I picked this bellwether because Romney had hung his electoral chances on Fairfax and analogous areas in the swing states. Romney held rallies at Land O Lakes, Florida, (a burgeoning bedroom community of Tampa); Kettering, Ohio, on the outskirts of Dayton; and in Columbus, Ohio. In Virginia, Fairfax and even wealthier Loudoun County were among his favorite stops.

In other words: at the heart of the Romney strategy was an effort to win back the White Bread vote. He was playing for the upper-middle-class, college-educated, white suburban voter who had been steadily drifting towards the Democrats. It didn’t work.

By 8:30 on election night, 90 minutes after polls closed, I noticed a pattern: Mitt Romney was performing about one percentage point better than John McCain had, in almost every Fairfax precinct. Romney was toast. In 2008, Obama beat McCain 60% to 39% in the county. Obama’s 232,000-vote victory in the DC suburbs of northern Virginia (Fairfax, Loudoun, Falls Church, Arlington, Alexandria, and Prince William) was equal to his statewide margin of victory. Shrinking that by 1 percentage point wasn’t going to swing Virginia. It was the same story in Philadelphia’s tony collar counties, and in the Columbus area: Romney did only barely better among the white-collar vote than McCain had done.

My question was this: if Romney was going after a swing population, why did he choose the population that was drifting towards Democrats rather than the demographic that was drifting towards Republicans? Why did Republicans go White Bread instead of Blue Collar?

Some of it is just persona. Mitt Romney doesn’t exactly give off the Joe Six Pack vibe. But part of the problem is that Romney probably believed, deep in his heart, that the upper-middle-class just ought to vote Republican—and that the working class rightfully belongs to the Democrats.

Romney said as much, of course. “There are 47 percent of the people who will vote for the President no matter what,” Romney told a group of high-dollar donors at a fundraiser in a now infamous video. “There are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them….”

Where did Romney get that number? That was the percentage of adults who paid zero federal income tax in 2011. Romney went on, “my job is not to worry about those people—I’ll never convince them that they should take personal responsibility and care for their lives.”

Consider how perverse this is. Romney says people are “dependent upon government,” simply if they pay no federal income tax. The people he’s talking about would include a family of four, earning $40,000, which pays thousands to the government between payroll taxes, state and local income taxes, and sales taxes, but collects no government benefits. Romney was ultimately writing these people off for the sin of not being successful enough. Their incomes were too low to qualify for admission into Club GOP.

This view is pervasive in the GOP establishment, and it accepts the liberal claim that the only reason to vote Republican is if you’re rich. The liberal rhetoric is wrong, and Romney is wrong. Conservatives need to get this right if they want to survive.

Romney, for instance, still lost all northern Virginia counties. Exit polls show Virginians earning in the six figures split their vote nearly evenly between Romney and Obama. Romney actually did slightly better among voters in the $50,000 to $100,000 than among those richer than $100k. In other swing states, such as Ohio and Florida, Romney won the wealthy vote, but not nearly by enough to overcome his loss among the non-poor.

So how is a Republican supposed to win, if he can’t win on the strength of the Country Club vote? By pursuing the Corner Pub vote instead. By reaching out to that wretched 47 percent, and proclaiming loudly what they already know: that the game in America is rigged against the ordinary guy. And then making clear what the Democrats can’t admit: that government is doing the rigging.

The Game Is Rigged

Those northern Virginia counties are clue to what’s going on. Seven of the ten wealthiest counties in America are bedroom communities of the nation’s capital. The wealthiest zip code in Maryland, 20854 in the town of Potomac with a $140,000 median household income, is 72 percent Democrat by registration, according to real estate website “Sperling’s BestPlaces.”

The high pay and exorbitant benefits of federal employees is a small part of that. It’s the government contractors, the congressmen-turned lobbyists, regulators-turned-consultants, and other remoras riding on the back of the federal leviathan that have turned the Beltway region into Lifestyles of the Rich and Connected.

Liberals blame GOP policies for growing inequality, but the pattern has persisted through the Obama years, too. Median incomes have stagnated and unemployment stays stubbornly high. Corporations, meanwhile, are sitting on record stockpiles of cash after making record profits. Small business, is not living so high on the hog: New business formation has reached an all-time low.

If you’re connected to power or big enough to afford a lobbyist who is, you can do well. If not, you’re out of luck.

Republicans are uncomfortable telling this story, because they are wedded to the idea that we have a real meritocracy or that a rising tide lifts all boats. Democrats should be bothered by this story, because they’ve spent decades promising that bigger government would level the playing field—and it hasn’t.

So, if Mitt Romney’s elitism is dead wrong, and if Barack Obama’s big government makes things worse, then it seems something new is in order. Free-market populism in order.

The Republican establishment seems to think it can expand by re-branding current policies, giving up on social issues, and giving amnesty to illegal immigrants. These, as luck would have it, are the policy preferences of the Republican donor class. But surrendering on social issues and couching Romneyism is nicer terms is not going to sell. New policies and new emphases are needed, and the donor class can’t call the shots.

A free-market populist agenda would begin with an all-out assault on corporate welfare. Repeal the indefensible sugar program, which drives up food costs to enrich a few politically connected growers. Scrap some programs beloved by GOP donors, like the Export-Import Bank. Target anti-competitive regulations like government-granted monopolies in the name of “intellectual property.” On all levels of government, go on a crusade against government-granted privilege in every sector from health-care and finance to food trucks and taxi cabs.

Give up the GOP-elite obsession with top-rate tax cuts. Instead roll back the payroll tax, permanently—a cut that would help every working person, and help the working class most of all.

Rail against bailouts, and don’t be afraid to impose safety and soundness regulations on the banks as long as the U.S. taxpayer is their insurer.

How does this help?

First, there’s a basic rule about politics: voters want elected officials who are on their side. Liberal politicians tell working-class voters they are on their side by bashing rich Republicans and big business. The thing is, big business often deserves to be bashed—and conservatives who believe in the free market can do this convincingly if they also dismantle all the government-granted privileges for the big and well-connected.

Second, rolling back corporate welfare would reverse the vicious circle of government growth in which bigger government creates a bigger class of corporatists, who then lobby for bigger government, and so on.

Finally, some intellectual consistency could rally the conservative base. Think of the GOP’s biggest offenses against the free-market in the past decade—the expansion of Medicare, the bailout of Wall Street, general overspending. They were all driven by the big business lobby. Only be declaring war on subsidy-sucklers and regulatory robber barons can the GOP actually live up to its free-market principles. It would also help the GOP win.

There are clear downsides to this approach: conservatives would lose some donors, and they’d probably lose northern Virginia by even more. But the corporate-welfare-loving donors can be replaced—note how various Tea Party institutions like the Club for Growth and FreedomWorks have raised huge piles of cash by running against the Beltway ruling class. And many of the most successful corporations would prefer not to run the tawdry K Street gauntlet, and thus would celebrate a movement dedicated to actually leaving business alone.

Fighting for the regular guy can be a winner in both policy and politics—even if it’s a loser at the country clubs in Fairfax.

Responses:

Purge the Party, Power to the People? by Chase Padusniak
Let’s Take Back What’s Ours by Elisabeth Cervantes Moore
Putting the Person Back in Populism by Ian Tuttle
More Historical Populism, Fewer Bluebloods by Danielle Charette