From Nixonomics to Trumponomics
The 50-Year Evolution of the GOP
President Richard Nixon signs the National Environmental Policy Act (NEPA) on January 1, 1970. Credit: U.S. Department of Agriculture (public domain). President Donald Trump signs Executive Order 13780 on March 6, 2017, barring travel indefinitely from seven countries. Credit: White House (public domain).
Fifty years ago, Republican President Richard M. Nixon resigned from the nation’s highest office, becoming the only U.S. president so far to do so. There is much to be said about Nixon’s presidency and its legacy—not least his “Southern Strategy” to appeal to racist white voters, the administration’s carpet bombing of Cambodia that killed, at a minimum, tens of thousands of people (if not many more), and the Watergate scandal that led to his near-impeachment and eventual departure from office. Another remarkable fact about the Nixon administration, however, is that it enacted an economic program that would be anathema to future Republican administrations. Nixon, who famously declared in office that he was “now a Keynesian in economics,” oversaw the implementation of emergency price controls and a significant expansion of environmental and safety regulations.
Ronald Reagan’s ascent to the presidency in 1980 meant an end to the Nixonian economic regime and the ascent of the right-wing “free market” ideology that soon became fundamental to the party’s identity. The advocates of Reaganomics, who launched an all-out assault on labor unions and sought to dismantle regulations and the welfare state, came to dominate U.S. politics for decades. Donald Trump’s takeover of the Republican Party, his first term as president, and now his successful reelection to a second term, amount to yet another watershed in the party’s approach to economics. In some ways, of course, Trump is using the same playbook as the Reaganites: massive tax cuts for the rich and hostility toward unions and workers’ rights, for instance. In other respects, however, Trump’s economic platform represents something different—namely in his nativist pitch for cracking down on the border, and in his overtly protectionist rejection of the free-trade dogma that has united both Republicans and Democrats since at least the 1990s.
Trump’s rebranded GOP is not likely to do any more for working people’s prospects than the various incarnations of the Republican Party that preceded it. But by promising to further empower capital while breaking out of the straitjacket of free-market rhetoric, “Trumponomics” may be helping the Republicans expand their appeal to less affluent voters.
From Nixon to Bush
In a 2014 interview for Fox News, Bill O’Reilly asked President Barack Obama if he was the most liberal U.S. president to date. “Probably not,” Obama responded. He went on to say that “in a lot of ways Richard Nixon was more liberal than I was.”
Obama was onto something. In addition to implementing wage and price controls as a response to the inflation crisis of the early 1970s, Nixon signed into law the creation of the Environmental Protection Agency and the Clean Air Act of 1970. He also oversaw the creation of the Occupational Safety and Health Administration. And he proposed, but did not succeed in enacting, comprehensive health care reform. His plan would have mandated that employers provide health insurance coverage to full-time employees, created a public health insurance program that anyone could buy into, and incrementally expanded and improved Medicare.
Perhaps most importantly, Nixon did not seek to undo his predecessor President Lyndon B. Johnson’s Great Society welfare programs, nor to attack the tenuous labor-management accord established under President Franklin D. Roosevelt. Neither did his Republican successor, President Gerald Ford—though Ford’s refusal to bail out a struggling New York City in the midst of a recession perhaps offered a glimpse of things to come.
Dismantling the New Deal order was precisely what Reagan and the conservative movement that brought him to power set about doing in the 1980s. The Reagan administration drastically slashed income and capital gains taxes, setting the stage for the ballooning wealth inequality that we see today. It crushed the federal air traffic controllers’ strike, letting the business class know it was now “open season” on organized labor. It oversaw brutal cuts to social spending, hurting the poorest especially badly. And it wasted little time cutting regulations on various industries. Its deregulatory moves in finance in particular set the stage for the savings-and-loan crisis of the late 1980s and early 1990s and opened the door to further deregulation by subsequent administrations—ultimately laying the groundwork for the Great Financial Crisis of 2008–2009.
Presidents George H. W. Bush and George W. Bush, the next Republicans to occupy the White House, more or less continued Reagan’s approach. (So too, in many ways, did President Bill Clinton, who infamously pursued welfare “reform” that exacerbated extreme poverty and signed the North American Free Trade Agreement (NAFTA) into law.) Bush Jr. branded his approach to governance “compassionate conservatism.” Setting aside the grotesquely inhumane “war on terror” launched by his administration, on the economic front, the signature policy of compassionate conservatism was a pair of massive tax cuts that mostly benefited the richest Americans.
The Trumpian Turn
To the surprise of many political observers and, it seems, the Republican establishment, in 2016 Donald Trump clinched the party’s presidential nomination, and the presidency itself, probably in part because of his willingness to break with neoliberal nostrums. Unlike some other GOP candidates, he rejected the idea of cutting Social Security. He denounced NAFTA for destroying American jobs and called for the imposition of tariffs on imported goods. And he adopted viciously xenophobic rhetoric around immigration, breaking with the prior Republican presidents who generally supported “paths to citizenship” for undocumented immigrants in the country even as they built up a militarized border operation. (Reagan, for instance, enacted a law that granted amnesty to 2.7 million migrants living in the United States at the time.)
As president, Trump largely followed through on these pledges. He replaced NAFTA with the U.S.-Mexico-Canada Agreement (though the latter was not too different in substance from the former). He established tariffs on goods from countries around the world, helping to start a trade war and most likely dampening U.S. economic growth. He continued to scapegoat immigrants for crime and unemployment and ramped up cruelty at the border.
In other ways, the Trump administration was less of a departure from previous Republican presidencies. Trump delivered for big business and neoliberal ideologues alike in a big way with his 2017 tax cuts, which like the George W. Bush tax cuts amounted to a massive boon to the wealthy at the expense of the federal budget. (See John Miller, “Trump Tax Cut Redux,” D&S, July/August 2024.)
On labor, too, Trump’s record was as virulently anti-worker as that of any president in recent memory. Economists at the Economic Policy Institute write, for instance, that Trump’s National Labor Relations Board “engaged in an unprecedented number of rulemakings aimed at overturning existing worker protections, including narrowing the joint-employer standard under the NLRA and obstructing workers’ right to fair union elections” and “issued a series of significant decisions weakening worker protections such as hindering workers’ ability to organize during nonwork hours and allowing the misclassification of workers.”
Trumponomics 2.0
Trump’s successful campaign for a second term promised more in the same vein: an administration that will be stridently pro-corporate and anti-union as well as violently xenophobic and doggedly protectionist.
These latter elements are, if anything, more prominent in his pitch to voters now. Among other measures, the GOP’s 2024 platform pledges to carry out “the largest deportation program in American history”; in an interview with Time magazine earlier this year, Trump said he would deport 15 to 20 million undocumented immigrants. (According to the Pew Research Center’s most recent estimates, there were only 11 million unauthorized immigrants in the United States as of 2022.) More recently, in September, he claimed he would also deport migrants with legal authorization to be in the country who arrived under the Humanitarian Parole program or enjoy Temporary Protected Status (TPS), categories that together include over a million people. On trade, too, Trump is turbo-charging his “America First” approach. In a move that hearkens back to a much earlier era for the Republican Party—the late 1800s—he has proposed replacing income taxes entirely with tariffs.
Finally, the Trump campaign has trotted out a number of unconventional proposals that are bound to have considerable popular appeal. Trump has, for instance, called for ending taxes on tips and overtime pay; appropriating a policy once advocated by Senators Bernie Sanders and Alexandria Ocasio-Cortez, he has also endorsed capping credit card interest rates at 10%. (Perhaps sensing Trump’s savvy, the Kamala Harris campaign quickly followed Trump in calling for eliminating taxes on tips.)
The Real Impact of Trump’s Program
For insights into Trump’s economic proposals and their continuities and discontinuities with previous GOP platforms, I spoke with Arthur MacEwan, professor emeritus in the Department of Economics at the University of Massachusetts–Boston (known to readers of this publication as “Dr. Dollar”). Referring to the incoherence and economic indefensibility of the former president’s policy ideas on the economy, MacEwan told me that Trump “doesn’t really have a program.”
He singled out the proposal on tariffs as particularly problematic, a wildly misguided policy that is, along with his anti-migrant stances, part of his “playing the xenophobia card.”
“Tariffs can have their uses, but what you have to remember about them is they are taxes on your own people,” MacEwan said. “They may be worth it to, say, protect infant industries. But that argument doesn’t make sense for the United States today.”
Trump’s extreme tariff proposal would amount to an incredibly regressive tax at that, MacEwan emphasized to me. Simon Johnson, 2024 Nobel laureate in economics and professor at the MIT Sloan School of Management, argued recently in Project Syndicate that “a tariff is just a fancy name for a tax imposed on people who buy imported goods (and anything produced domestically using imported inputs), so the Trump proposal would squeeze all American households, with a particularly harsh impact on working people with lower incomes.” (For more on the potential distributional consequences of Trump’s tariff regime, see John Miller’s Short Run item, “Trump’s True Colors,” D&S, September/October 2024.) On immigration, if Trump were to actually carry out mass deportations at something like the scale he’s discussed, many economists say, it would deal a huge blow to the U.S. economy. It would exacerbate labor shortages, drastically drive up prices, and wipe out an essential part of the nation’s tax base—erasing as much as $96.7 billion in tax revenues, according to a June 2024 report by the Institute on Taxation and Economic Policy.
Meet the New Boss, Same as the Old Boss?
Of course, the logistical challenges of such a program of mass deportation are huge, and it is far from clear that Trump would have the power or popular support needed to carry it out even if he wins the election. Nevertheless, his first term is evidence enough that he could inflict great misery on millions of refugees, asylum seekers, and other migrants. The same goes for his back-to-the-Gilded-Age tariffs proposal. Project 2025, the wish list for a second Trump presidency put out by the right-wing Heritage Foundation, notably includes competing visions for trade policy, pitting a pro-tariff “case for fair trade” against a traditional neoliberal “case for free trade.” The juxtaposition suggests that the foundation is trying to triangulate between Trump and his acolytes, on the one hand, and the more respectable free-market ideologues who the think tank has traditionally catered to on the other. (Trump has publicly distanced himself from Project 2025, though many of its architects served in the former president’s administration.)
Yet setting aside the actual likelihood of Trump enacting different elements of his agenda, it’s important to acknowledge its ideological significance simply as rhetoric. “For years, Democrats have promised to make health care more affordable and to bring back good-paying jobs,” Neal Meyer wrote in Jacobin in October. “Fewer and fewer working-class people believe them. For these voters, a novel program like Trump’s—perhaps precisely because experts and elites denounce it so vigorously—could be appealing.”
Trump’s ability to effectively speak to the real grievances of those who feel left behind, and to channel those grievances into an emotionally potent xenophobic, nationalist fervor, gives him a kind of appeal that establishment politicians of the pre-2016 GOP lacked. Trump’s decisive victory in this election—which, according to exit polls at the time of this writing, happened in part by his winning voters making $50–100K even as Democrats prevailed with wealthier voters—suggests that this sort of program may pack a real political punch. It should be alarming indeed for a Democratic Party that is bleeding working-class voters of all races to the GOP.
Rhetoric aside, though, Trumpism’s break with the Republican Party of Reagan and the Bushes may not be as deep as it first appears. Even under George W. Bush, for instance, the Republicans were happy to violate their professed commitments to free trade (by, for example, imposing restrictions on foreign steel imports in order to protect the domestic steel industry from competition.) “At least since the middle of the 20th century, U.S. business along with the imperial U.S. state has moved away from tariffs (and other restrictions on international commerce) toward deregulation and openness,” MacEwan wrote of the GOP’s evolution in his 2001 Dollars & Sense article “The Neoliberal Disorder: The Inconsistencies of Trade Policy.” “In this movement, the Republican Party has in effect re-dubbed itself as ‘The Party of Free Trade’—though it might avoid confusion if it would just maintain the one name that defines its consistency, ‘The Party of Big Business.’”
That Trump prevailed against the Democrats, who are associated with an unpopular president and an economy that people have major gripes with, is not particularly surprising, despite the ultimate emptiness of his populism. The Harris campaign could have run on an aggressive Bernie Sanders-style program of redistribution and (green) public investment to actually address the deep sources of discontent with neoliberal economics that Trumpism has, in its own way, given voice to. But the Biden administration, and even more so Harris’s 24th-hour corporate-friendly campaign pitch, revealed a party set on a different, decidedly more centrist course.