By EDUARDO PORTER, New York Times, September 4, 2012
To hear Republicans on the campaign trail, the United States could not have elected a more left-wing president than Barack Obama, one more hostile to business or more eager to expand government power. Left-wing Democrats, I’m sure, would disagree. If they had their druthers, they would probably make a more liberal, more pro-big government choice. Somebody, perhaps, like Richard Nixon.
That’s right. The Nixon administration not only supported the Clean Air Act and affirmative action, it also gave us the Environmental Protection Agency, one of the agencies the business community most detests, and the Occupational Safety and Health Administration to police working conditions. Herbert Stein, chief economic adviser during the administrations of Nixon and Gerald Ford, once remarked: “Probably more new regulation was imposed on the economy during the Nixon administration than in any other presidency since the New Deal.”
Nixon bolstered Social Security benefits. He introduced a minimum tax on the wealthy and championed a guaranteed minimum income for the poor. He even proposed health reform that would require employers to buy health insurance for all their employees and subsidize those who couldn’t afford it. That failed because of Democratic opposition. Today, Republicans would probably shoot it down.
Historians might protest that it is crazy to brand Nixon a lefty. He was rabidly anti-communist. If anything, they might argue, his seemingly left-leaning policies underscore how uninterested he was in the economy and how far he would go to buy popularity with public money.
Still, Nixon’s initiatives would never pass muster in the Republican Party of today, focused as it is on cutting taxes and public spending. His decisions not to try to undo big government programs passed by Lyndon Johnson’s Democratic administration underscores how much the political center has moved.
The difference between then and now is that Nixon — like most mainstream Republicans — accepted that government had a role to play guaranteeing Americans’ economic well-being. That consensus cracked around the time of Ronald Reagan’s inaugural speech in 1981. “Government is not the solution to our problems, government is the problem,” the president intoned. And the country’s political center set off on a long rightward migration.
Interestingly, Americans say their political ideology has changed little since the late 1970s. The share of voters who defined themselves as liberal was 20 percent in 2010, up slightly from 19 percent in 1980, according to polls by The New York Times and CBS News. The conservative share over the same time rose to 35 percent, from 30 percent.
But these polls ignore how much the meanings of the terms have changed. The rightward drift in economic thinking becomes apparent in surveys asking about specific issues. In surveys 25 years ago, 71 percent of Americans believed it was the government’s job to take care of those who couldn’t care for themselves, according thePewResearchCenter. This year the share is down to 59 percent. And most of the shift reflects a decline among Republicans.
Republicans’ support for labor unions has fallen sharply since the late 1980s, according to Pew’s research, as has their support for protecting the environment. Their drift fits the position of Congressional Republicans, whose views on the economy have been shifting right for the last quarter-century while Democrats’ views have remained roughly still. And as Republicans have moved to the right, economic policy has followed.
Consider what has happened to federal nonmilitary discretionary spending, which pays for housing vouchers and veterans’ health, highway maintenance and the Food and Drug Administration — essentially all the domestic social programs that are not mandatory like Social Security, Medicare or Medicaid.
When Nixon resigned from office in 1974, nonmilitary discretionary spending amounted to about 4 percent of the nation’s economy — roughly the same as at the end of the Johnson administration before him. Discretionary spending expanded through the administrations of Gerald Ford and Jimmy Carter, reaching a high in 1980 of 5.2 percent of the nation’s gross output. Then the tide turned: by 2008, before the Great Recession shrank the economy and the fiscal stimulus lifted spending, nonmilitary discretionary spending had fallen to 3.6 percent of national output.
Conservatives will say their ideas won simply because they are better. Social scientists have some alternative hypotheses of our great conservative shift.
The big government strategy from the 1940s through the 1970s produced a spectacular improvement in living standards. But many economists now say they believe the focus on full employment and income redistribution at the expense of everything else also contributed to the strategy’s demise, removing the fear of joblessness and encouraging excessive wage increases.
Combined with cheap money printed by the Federal Reserve, it produced a burst of high inflation and high unemployment that bedeviled the 1970s — discrediting government as an economic steward and letting a new belief take hold: the economy should be left to the market, which always knows best. The end of the cold war, which discredited central planning and other left-wing economic theories, probably helped solidify this stance.
Economic philosophies could shift again, of course. Just as the big government policies of the New Deal emerged from the Great Depression and World War II, the financial crisis and recession just past might again persuade Americans of the perils of unfettered capitalism and cause the pendulum to swing back.
Still, the scorched-earth debate over Obamacare underscores how difficult it will be for the American political system to swallow a more activist government than it has today.
Those nostalgic for Johnson’s Great Society programs might remember that they occurred in a kinder, gentler economy in which American companies faced much less competition than they do today. Eastman Kodak could run a mini-welfare state through much of the 20th century —with profit-sharing, health benefits and pension plans — because it had fat monopoly-type profits.Detroit’s Big Three amounted to a cozy oligopoly.
Globalization and its attendant burst of competition put an end to the fairy tale. Companies squeezed costs to stay in the game, zeroing in on wages and working conditions. Unions, once politically powerful institutions fighting for workers’ share, became weaker and weaker.
Half a century ago, American employers might have accepted a higher minimum wage on the ground that they needed American consumers to be able to afford their products. They might have supported public education on the ground that they needed an educated American work force. They might have accepted financial oversight because they raised money from small investors in American markets.
But globalization freed businesses from the limitations of one nation and the clutches of the nation state. As businesses’ footprints extended around the world, these objectives became less important than assuring low taxes. Free to jump borders, businesses became much more difficult to tax or regulate. And in the current dismal economy, they don’t seem too eager for a return of the big government days.
The United Statesis in ideological flux. The Great Recession has given us both the Tea Party and the Occupy Wall Street movement, and produced perhaps the most polarized government of the modern era. Liberal-leaning Democrats, often disappointed at the president’s compromises, will pine for a more aggressive champion of workers’ rights. But they may want to count their blessings. Americans today might not elect somebody as liberal as Richard Nixon.