Preparing the Way For the Trump Revolution

“If the left fails to mobilize the working class, the right will do so instead. That is exactly what has happened”. -Historian David N Gibbs

“ Donald Trump isn’t the cause of what ails America. He’s the consequence. The real causes go back four decades”.

-Robert Reich

This is the second draft chapter in the overview section of my book on the causes of economic inequality. It builds on the first that you can read here.

The Trump phenomenon is not new. It is a result of long preparation by the superrich with significant cooperation by the elite members of the Democratic Party starting in the 1970s. Since this book is dedicated to assisting with the reform of the Democratic Party, the following analysis will focus on the role that the leaders of the Democratic Party played in preparing the way for the Trump revolution. These influential Dems were concerned about the emerging power of the left represented by Ralph Nader and the environmentalists in the 1960s.

Nader had been successful in getting several product safety restrictions put on businesses such as forcing car manufacturers to install features like seatbelts. And now he was leading an attempt called ‘ Campaign GM ‘ to force that corporation to enact more safety features, deal with racial discrimination in its employment practices and protection of the environment. Where was this going to stop?

The elite corporate rebellion against Nader and other social activists united the predatory super rich and their advisors, both Democrat and Republican, in developing common strategies attacking the power of the lower classes.

At the same time, a group of economists supplied the justification for the very rich amassing greater riches through an economic theory called neoliberalism. A theory that told the working class that enriching the already rich would enrich the rest of us.

The ‘centrist’ New York Times struck the first blow. In September 1970, it gave a full page spread in its magazine to neo liberal economist Milton Friedman. Friedman attacked Nader and the idea that a corporation had the slightest obligation for social responsibility or to its employees. Its one and only obligation was to make the most money for its shareholders-called Maximum Shareholder Value (MSV) or the Friedman Doctrine.

Friedman’s title captured his theme perfectly, “ The Social Responsibility of Business Is to Increase Its Profits,”

From that time on Friedman, with his neoliberal economic policies, notably deregulation, and lower taxes for the rich (the trickle-down claim) became the greatest influence on the Democratic Party’s economic policies.

In 1971, prominent Democrat, Lewis Powell was also concerned about the emerging power of the left, especially Ralph Nader and the environmentalists. At the request of the US Chamber of Commerce, he wrote a 34-page memo about the left’s attack on the American free enterprise system. Described as a call to arms, it set out talking points for how the corporate world should develop strategies to influence universities, the courts, the media, lobby politicians, and in every area that could influence public opinion.

No doubt that Nader was the evil villain in Powell’s mind as in Friedman’s. Powell mentioned Ralph Nader three times. For example,

“There should be no hesitation to attack the Naders, Marcuses [Herbert] and others who openly seek destruction of the system.”

From the 1970’s corporate America did carry on a massive influence campaign using a network of think tanks, lobby groups and publicity agencies to spread their message. Friedman, soon a Nobel laureate, and colleagues, provided the guidance.

It is worth noting here that Powell was appointed to the US Supreme Court. This Democratic Party member wrote the decision in Buckley v. Valeo (1976) t hat removed all restrictions on the amount an individual could donate to a political action committee (PAC), though not directly to politicians.

To achieve this end in Buckley v. Valeo, Powell distinguished between:

* expenditures (those made by people or groups for their own independent political advertising in PACs) and

* contributions (direct payments to politicians)

There remained a statute that prohibited corporations from donating to PACs.

The expenditures/contributions distinction was applied in Citizens United v. FECto remove that prohibition. Now corporations could donate unlimited amounts to PACs (now usually referred to as Super PACs).

The Seduction of Jimmy Carter

It is hard to reconcile the image of kind hearted Jimmy Carter with the policies that began the hollowing out of the middle and working classes. Professor Thomas Zeiler describes him, “ But over all of those great qualities, Carter was humane. And you certainly see that reflected in his post-presidential years”

Yet, as Christopher Simmons observes in an article for the American Prospect, “He helped turn the Democratic Party away from its New Deal foundations”.

Historian David Gibbs explains the contradiction in Carter’s achievements in, America’s First Neoliberal President:

“As he celebrates his 100th birthday on Tuesday, Jimmy Carter is known for many things: He is a white southerner who advocated racial integration and equality. He is a Sunday-school Bible teacher who also supports abortion rights. As an ex-president, he has mediated global conflicts and worked to eradicate disease. But Carter must also be remembered for something else: During his term as president, he inaugurated the neoliberal revolution in political economy”.

“Based on this research, I have concluded that Carter was indeed America’s first neoliberal president. In many respects, Ronald Reagan gets too much credit for the transformation in policy that deregulated, de-unionized, and financialized the US economy”

Gibbs notes further that “ As president, one of his top priorities was to reduce or eliminate the array of business regulations that emerged from the New Deal. The idea of deregulation was a central feature of the Friedmanite economic doctrine, and it was rapidly gaining elite support during the 1970s. This doctrine was first implemented on a large scale during the Carter presidency.”

In support of his unorthodox conclusion, Gibbs goes on to explain how Carter deregulated the airline, trucking, rail transport industries and began deregulation of the pharmaceutical industry. The result:

“​​One of the main effects of deregulation was to lower wages, which declined across multiple industries. The trucking industry became “sweatshops on wheels,” according to a later academic study.”

Carter was seduced by neoliberalism. Gibbs notes that Carter liked to say that the decline in living standards was temporary. This explains that Carter was taken in, but it does not justify why subsequent Democrat leadership continued the march against the very programs that had provided economic security to the working classes and the Democratic Party success. Nor does it explain why the pro-democrat centrist media failed to point this out.

1980: A Very Good Year for the Ultra Rich

1980 was a significant year for the swing to the right in economic policies. Ronald Reagan swept into power riding on Milton Friedman’s neoliberal principle that ‘government was the problem not the solution’. Massive deregulation was the solution.

Reagan would deliver what Carter did not: what is dearest to the heart of the super rich, tax cuts for them.

Now Friedman became the economic guru to the Republicans as well as the Democrats.

1980 was also the year that David Koch lost his bid to be vice president running on the libertarian party ticket. He and his brother, Charles, recognized that they could never obtain the total influence they wanted over the government by democratic means. But the decision of Democrat Lewis Powell in Buckley v. Valeo gave them an opportunity to get that control. Elections were won by media sound bites not policy. The government could now be donor controlled not voter controlled.

The brothers enlisted their fellow billionaires, and those multi-millionaires who aspired to become billionaires, to assist in removing all government restraints such as:

* consumer and environmental protection regulations that cut into profit, and further taxes on themselves and their businesses so they could make and keep even more billions.

They were assisted by a provision of the Internal Revenue Code (Section 501(c)(4)) that permitted an organization with the object of ‘social welfare’ to keep their donors secret. Hence the term, Dark Money, entered politics.

By 2010, their efforts were rewarded. Despite what appeared to be a Democrat comeback with the election of Barack Obama in 2008, within two years the Republicans rode back on a wave. The Guardian reported the Democrats were “pummelled at the polls”. “ Barack Obama”, it continued, “was facing a harsh new US political reality in the wake of one of the worst Democratic defeats for 70 years”.

Journalist Jane Mayer investigated how the Koch brothers and their billionaire buddies achieved their success in her book. Its title captures the phenomenon: The Hidden History of the Billionaires Behind the Rise of the Radical Right.

Like Powell, Mayer describes, the Koch brothers knew they needed a strategy along with controlling the politicians. Among other efforts, they

* created a network of think tanks, and pressure groups;

* influenced university courses; and

* introduced the idea of the course called Law and Economics to law schools and paid economists to write the textbooks.

In spite of the coordinated mobilization of this great wealth against them, the Democrats scored a resounding victory in 2007. Obama took the presidency and the Democrats had control of both houses of Congress. Yet they failed, and set the stage for the first Trump victory. The reason for their collapse and the backlash requires another examination into an unexamined bit of political history, next.

Acknowledgment: Forest fire image by pixabay

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Originally published at https://jandweir.substack.com.