Think of this as Volume 17, Number 44 of the newsletter I have written weekly since March, 1997. Enjoy.
They're not “conservatives,” as we usually define the term. They're populists.
Populism is as old as the Republic. Thomas Jefferson ran as a populist in 1800, but eventually accepted renewal of the U.S. Bank. Andrew Jackson was our most successful populist, and he killed the bank.
The Panic of 1837, which followed soon after, killed populism as a governing principle. It only ended after American imperialism seized the southwest from Mexico, and we found gold in California.
Populism then merged with anti-immigrant Know Nothingism. It infected the Democratic Party through non-slaveowners supporting the Ku Klux Klan. It only became associated with liberalism thanks to William Jennings Bryan's “Cross of Gold” speech.
But populism was never about economic theory. It was and is about relative advantage, about people losing their edge -- or assuming they're losing it -- against newcomers rising up around them.
Populism, at its heart, is about a fear of change, the assumption that everything is a zero-sum game. And it's the nature of America that it's not a zero-sum game, that history sides with the newcomers.
Populism also doesn't have to be internally consistent. It isn't.
By 1948, populists were ready to revolt in both directions, economically through Henry Wallace, socially through Strom Thurmond. Only the fact that Republicans had been discredited through wealthy people suffering Hitler too long let Truman win.
Civil Rights sent the populists into the Republican camp when I was a kid, the George Wallace campaign midwifing it and Nixon's “Southern Strategy” embracing it. Nixon's idea was that the crazy end of populism, its racism and hatred of “the other” (whoever they turned out to be) could be contained, and directed, by central control from the top.
That strange tip – Wall Street Republicans and imperialist-military Republicans riding herd over a populist Republican base, giving it little more than lip service when victory was threatened – worked for most of a generation.
But there's a huge difference between populism and Wall Street. There always has been. Populists of the left and right have agreed on little other than their hatred of Wall Street. (To the right is John D. Rockefeller Sr. -- a lifelong liberal and arch-enemy of the populists.)
The fact that Woodrow Wilson, elected with populist support, became the father of the Federal Reserve had to do with his skillful re-direction of that hatred – a network of 12 banks spread around the country was sold as preferable to rule by the House of Morgan, which had brought the U.S. out of its panics of 1893 and 1907.
Populists hate concentrations of power, they fear “the other” (whether an immigrant, a black person, an uppity female or a gay person), and they're not too subtle about it. They don't need code words. They accept their basically anti-democratic nature. They see politics as struggle. Thus an argument ceases to be an intellectual process, and becomes just contradiction.
Which brings us to Ted Cruz. Cruz really thinks he was born to rule. And he has managed to marry Texas' love of populists – going all the way back to Ma and Pa Ferguson – to its current Republican fetish. His purpose was achieved by the recent shutdown – he took up the populist flag and planted it in the heart of the Washington Republican party.
Wall Street now has no idea what to do. It can't disown its populists, because they represent its grassroots, its foot soldiers. The party has been feeding that base on populism ever since the Nixon years. On the other hand many Wall Street Republicans can't afford to walk away from politics, either. Opinions may change but interests abide. If you don't control the government you must become a supplicant in order to get what you want done. This is very hard to take.
This is very similar to what happened with big business a generation ago. For over a century big money had been of a liberal bent. Republicans were, until the 1930s, our more liberal party, and the largest enterprises were quite ready to become the right wing of the Democratic Party after World War II, maintaining a preference for slow, progressive change that had become their habit.
This, in addition to a misunderstanding of populism, is a second mistake made by today's analysts. We can't conceive of business as a progressive force. But economic growth, the organization of vast enterprises, requires change, change over the objections of people who like things the way they are. Business has long called this economic change “progress.” You can't spell progressive without progress.
“If you don't like cops then the next time you need help call a hippie.”
This played out in millions of homes during the 1960s and 1970s. This was the heart of the “generation gap” that drove the Nixon Thesis of Conflict.
But since the 1960s the social divisions that marked that era have cooled. Most kids love their parents, and vice versa. Businesses now have women leaders, black leaders, immigrant leaders and even gay leaders. Progress now means something more like what it meant in the 1930s – economic re-organization aimed at profitable growth. It means ordered liberty.
So slowly, and a bit painfully, CEOs have been making more common cause with Democrats. Reporters covering Wall Street don't see it, but it's happening nonetheless. Most CEOs still call themselves conservative, or independent. But many see the need for Obamacare, in order to reduce their own health care cost burdens. Most want to negotiate through our economic problems. Most are simply not apocalyptic, which is the economic model that has always been most popular in populist circles, since it keeps people on edge and activated.
The popularity of populism will wane as the world doesn't come to an end because of the Federal Reserve. Conservative businessmen will gradually see a need to make common cause with Democrats in order to get the progressive change that means economic growth, although they'll first do it a bit shamefacedly, as Jeff Immelt of GE did during the President's first Administration.
It's a process. It's evolutionary, not revolutionary. To reporters, it's like watching tectonic plates. It's not something that happens in a news cycle, or even a single election cycle. But it is happening.
The first hint of what's to come came Tuesday in Virginia, where a Democrat running on a frankly liberal ticket beat a Republican-populist who emphasized social issues throughout his political career. At the same time, a Democrat became Mayor of New York for the first time in 20 years, and New York will not sink into the sea as a result. Chris Christie won because few New Jersey Republicans are populist -- populists can't afford to live there.
Business is conservative, in that it likes what it has. But it's progressive in that it always wants more. And it is always in favor of law and order, which it sees as part of government's rightful role.
Populists, on the other hand, are now the ones talking about the need for revolution, about becoming armed to the teeth, about taking the law into their own hands, about an apocalypse now, which is always bad for business.
“If you don't like cops then the next time you need help, call a survivalist.”
Thus does a new coalition gradually turn from the liquid of an election night to the solid of an enduring political Thesis, the Obama Thesis of Consensus. The business of America is business and when business shifts its political allegiances, even a little bit, that's the story you need to follow.
Want to know where politics is going? Follow the money.