We’re five years into a so-called recovery that’s been a bonanza for the rich but a bust for the middle class, which is fueling a new populism. “The game is rigged, and the American people know that,” says Massachusetts Sen. Elizabeth Warren.
Left- and right-wing populists remain deeply divided over the role of government. Even so, the major fault line in American politics seems to be shifting, from Democrat vs. Republican to populist vs. establishment — those who think the game is rigged vs. those who do the rigging.
The two sides are coming together around six principles:
1. Cut the biggest Wall Street banks down to a size where they’re no longer too big to fail. House Republican David Camp, chairman of the Ways and Means Committee, recently proposed an extra 3.5 percent quarterly tax on the assets of the biggest Wall Street banks (giving them an incentive to trim down). “There is nothing conservative about bailing out Wall Street,” says Kentucky Sen. Rand Paul.
2. Resurrect the Glass-Steagall Act, separating investment from commercial banking and thereby preventing companies from gambling with their depositors’ money. The Tea Party Tribune criticizes establishment Republicans for not backing this.
3. End corporate welfare — including subsidies to big oil, big agribusiness, big pharma, Wall Street and the Export-Import Bank. Populists on the left have long been urging this; right-wing populists are joining in. Camp’s proposed tax reforms would kill dozens of targeted tax breaks. Says Sen. Ted Cruz: “We need to eliminate corporate welfare and crony capitalism.”
4. Stop the National Security Agency from spying on Americans. House Republican Justin Amash’s amendment that would have defunded NSA programs engaging in bulk-data collection garnered votes from 111 Democrats and 94 Republicans last year, highlighting the new populist divide in both parties.
5. Scale back American interventions overseas. Populists on the left have long been uncomfortable with American forays overseas. Paul is leaning in the same direction. He also tends toward conspiratorial views about American interventionism, claiming that former Vice President Dick Cheney pushed the Iraq war because of his ties to Halliburton.
6. Oppose trade agreements crafted by big corporations. The Trans-Pacific Partnership, drafted in secret by a handful of major corporations, is facing so strong a backlash from both Democrats and tea party Republicans that it’s nearly dead.
Tea partiers continue their battle against establishment Republicans in this month’s Republican primaries. But the major test will come in 2016, when both parties pick their presidential candidates.
Cruz and Paul are already vying to take on Republican establishment favorites Jeb Bush or Chris Christie.
Warren says she won’t run in the Democratic primaries, presumably against Hillary Clinton, but rumors abound.
Wall Street and big-business Republicans are already signaling they’d prefer a Democratic establishment candidate over a Republican populist.
Dozens of major GOP donors, Wall Street Republicans and corporate lobbyists have told Politico that if Jeb Bush decides against running and Chris Christie doesn’t recover politically, they’ll support Hillary Clinton.
Says a top Republican-leaning Wall Street lawyer: “It’s Rand Paul or Ted Cruz versus someone like Elizabeth Warren that would be everybody’s worst nightmare.”
Everybody on Wall Street and in corporate suites, that is.
If the American establishment wants to remain the establishment, it will need to respond to the anxiety that’s fueling the new populism rather than fight it.