Republican candidates running for president often start by declaring that the economy under a Democratic president is in horrible shape — a veritable “carnage” as Donald Trump put it — even though it wasn’t, and with supreme confidence declare that only they have the vision to right the ship.
Their vision — or delusion — is that cutting regulations and taxes is the key to stimulating growth. Unfortunately, the only ones who get “stimulated” are the rich who see the biggest gains from tax cuts.
I have previously shown how tax cuts have not helped the working class. Take a look at this graph. The bottom 50 percent of workers did not see any income gains during the 1980s from Ronald Reagan’s huge tax cuts enacted in 1981.
Recall that Kansas Gov. Sam Brownback implemented huge state tax cuts in 2012. The plan aimed to boost the state’s economy was quite the disaster. The tax cuts were eventually reversed by a Republican-controlled Legislature.
A significant number of regulatory cuts during Trump’s presidency were in the coal, oil and gas sectors and on environmental issues. But how is finding and burning more fossil fuels working out for us, our planet and our economy?
The second delusion is the claim that the tax cuts will pay for themselves. History says that has never happened. Why? Simple. Income growth does not increase nearly enough to pay for the tax cuts.
And finally, Republicans would cut government waste, fraud and bloat. Grand as that may sound, we have not seen it happen as of yet during any administration, liberal or conservative.
So now Republicans seem to be changing their tune. According to a poll conducted by Henry Olsen, a conservative commentator for the Washington Post, some GOP members of Congress have tacitly admitted that their policies do not work and are proposing what could be seen as “socialist” policies.
Jim Banks, R-Ind., who heads the Republican Study Committee has urged U.S. House Minority Leader Kevin McCarthy, R-Calif., to rebrand the GOP as the party of the working class. The study committee is working on a comprehensive policy agenda that would move the Republican Party away from its traditional support for corporations and toward support for the worker. Unfortunately for the GOP, the Democratic Party is already supporting this agenda.
In 2019, our own Republican Sen. Marco Rubio gave a speech on restoring “common good capitalism.” He helped craft the Paycheck Protection Program and supported the failed effort to unionize Amazon workers in Alabama. Sounds a little lefty and liberal.
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Sen. Tom Cotton, R-Ark., has drafted bills calling for increasing the minimum wage, government subsidies for domestic semiconductor manufacturing, and returning money collected from tariffs on Chinese goods to working and middle-class taxpayers. Sounds like “socialism” and government regulations wrapped into one.
Sen. Josh Hawley, R-Mo., has spoken widely about how the economy has failed too many Americans in recent decades. He is pushing the GOP to reposition itself quickly and comprehensively. Less government intervention is so old school now.
And now you have Ohio’s Republican senatorial candidate, J.D. Vance — author of Hillbilly Elegy — who is calling for tax hikes on companies that move jobs overseas. He believes that the worship of market forces has led to far too many impoverished Americans.
A question for these politicos: Why are you even Republicans? The Democratic Party has long ago adopted many of these policy prescriptions. And a question for working class Americans: Who has your best interests in mind?
Murad Antia teaches finance at the Muma College of Business of the University of South Florida in Tampa.