In an earlier installment of Controlling the Political Narrative, we traced the history of the GOP’s effort to build a messaging network. This five-plus decades long (and counting) project was inspired by two motivating forces. First, racial resentments crystallized around passage of the Civil Rights Act of 1964. Conservative southern Democrats, incensed at their party’s newfound support of racial equality, went looking for a more agreeable political home. They were quickly swept into the waiting arms of Richard Nixon and the evolving Republican Party.
The second motivating force was a growing anxiety among business leaders, who were concerned with the growth of the administrative state and by Vietnam-era popular backlash against what was often described as the “military-industrial complex.” They began looking for new and more efficient ways to influence social and political opinions. The Powell Memo was an early blueprint.
Developing a message that would resonate with racists wasn’t a particularly heavy lift, as the late GOP political operative and Reagan White House adviser Lee Atwater explained in a now-infamous 1981 interview:
You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger”—that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.… “We want to cut this,” is much more abstract than even the busing thing, uh, and a hell of a lot more abstract than “Nigger, nigger.”
The GOP’s problem wasn’t attracting the bigots, or spoon feeding them the coded rhetoric they wanted to hear. Its problem was convincing the racists that they were truly among friends with the Republican core, Wall Street and corporate America. Business and financial interests favored lower taxes and increased capital mobility, and were antagonistic to most of the things that made middle-class life livable, like trade unions, higher wages, and regulatory safeguards. How would business and finance find common cause with the very un- or under-educated, lower- or middle-class, blue collar workers who stood to lose the most from their policy preferences?
As with so much that is Republican orthodoxy, The Gipper had the answer.
Ronald Reagan rode a huge wave of economic anxiety all the way to the White House in 1980, and he brought with him the supposed miracle of supply-side economics to cure our fiscal ills. The brainchild of Reagan economic adviser Dr. Arthur Laffer, supply side economics posits that investments in capital will spur increased production and economic output. Because the wealth from that output is supposed to “trickle down” through the economy to ordinary wage earners, supply-side theory is sometimes called “trickle-down economics.”
And how, we know you’re asking, is the government supposed to invest in capital? Simple: tax cuts. But not just tax cuts for anybody, or, for that matter, for everybody. Tax cuts for the rich. Tax cuts for businesses. Tax cuts for – you guessed it – Wall Street and corporate America. The Economic Recovery Tax Act of 1981 (ERTA), the signature legislative accomplishment of Reagan’s first term, slashed the top individual tax rate from 70% to 50%, decreased corporate taxes by $150 billion over five years, and reduced estate taxes. And then we all waited for the economic miracles we were promised. You remember – the ones that never came.
What did ERTA produce? The federal deficit exploded, interest rates skyrocketed, and the economy plunged back into recession. Within less than two years of its passage, ERTA was effectively dead, replaced by the Tax Equity and Fiscal Responsiblity Act of 1982. More than three decades of experience at both the federal and state levels have demonstrated, time and again, that supply-side economics is a failure. But guess what? That’s not the point. In the fact-free world we now seem to inhabit, whether a GOP policy works or not is quite beside the point, something that can be spun, ignored, or lied away.
No, Reagan’s genius wasn’t in the substantive merit of his proposals. It was in the messaging. Reagan was able to convince poor and middle-class, blue-collar workers that their lot in life would be improved by giving huge tax cuts to rich people and corporations whose interests were opposed to their own. Tax cuts for the wealthy, they were promised, meant manufacturers would increase production, which in turn would mean better, higher-paying jobs. So they’d be able to buy that new car, or take that family vacation, or pay for their kid’s college, or put more money away for retirement. For GOP politicians, supply-side economics was, and is, the gift that keeps on giving.
Today, supply-side economics, funded by large tax cuts that disproportionately favor the wealthy and corporations, is taken as an article of faith in Republican political circles. Declaring fealty to this failed policy is very nearly a prerequisite to election to federal office and, in many cases, to state office as well. The quickest way for a Republican politician to get “primaried” from the right is to profess support for a tax increase, or to waver on the need for more tax cuts, ever.
How, we can hear you asking, did the GOP manage to pull this off? We’ll take that up at another time. But if you want some homework on the subject, start here. Want a hint? It has less to do with wealth, and more to do with perceptions of social class.