Donald Trump has named Steve Mnuchin — a Goldman Sachs alum and hedge fund manager — to be his secretary of the Treasury, in keeping with his repeated promise to take on Wall Street and the powers-that-be on behalf of the little guy.
So can we stop pretending that Trump’s campaign “populism” was anything other than just one more con?
It isn’t just the next Treasury secretary. Recently on CNBC, Mnuchin outlined his people-centered plan for the country’s economy.
“Our number one priority is tax reform,” he said. “We think by cutting corporate taxes we’ll create huge economic growth and we’ll have huge personal income so the revenues will be offset on the other side.”
At last, a Republican administration that believes in the wonder-working power of tax cuts for corporations and the wealthy! If only George W. Bush had known about that, we would have had spectacular growth through the 2000s and the Great Recession never would have happened. Oh wait — this is exactly the economic program Bush pursued, to such disastrous effect.
In fact, Mnuchin has a direct connection to the recession: while it was unfolding, he and other investors bought IndyMac, a purveyor of the kind of shaky mortgages that fed the crisis. After foreclosing on thousands of homeowners, Mnuchin and his partners sold the company and made billions. As Ben Walsh describes it in Huffington Post:
“Steven Mnuchin’s takeover of IndyMac is a story about everything Americans have come to hate about how the financial crisis was allowed to unfold ― ordinary people panicking, savvy investors pouncing, a government guarantee that saved a bank but didn’t even try to keep people in their homes, a clever rebranding, rampant foreclosures, billions of dollars in profits.”
Mnuchin is just one appointment, though, right? Well, Trump also just announced that his Secretary of Commerce will be Wilbur Ross, a billionaire private equity investor. And his Secretary of Education will be Betsy DeVos, a billionaire opponent of public schools. And his Transportation Secretary will be Elaine Chao, who served in the administrations of both George Bushes and is married to Senate Majority Leader Mitch McConnell. Before entering politics she was a banker, and according to Politico, “She made at least $1,074,826 from serving on boards of directors in 2015, according to public records.” Trump is also reportedly considering Goldman Sachs president Gary Cohn to be his budget director. “It’s the most conservative [Cabinet] since Reagan,” says one supply-sider, and that may be an understatement.
You may remember Trump’s closing ad of the campaign, in which he said, “Our movement is about replacing a failed and corrupt political establishment with a new government controlled by you, the American people” over images of Wall Street, piles of money, financiers like George Soros, and other symbols of established power and wealth. “It’s a global power structure,” he went on, “that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth, and put that money into the pockets of a handful of large corporations and political entities.”
So in order to take on that global power structure, Trump is hiring a bunch of billionaires and Wall Street tycoons, cutting taxes for corporations and the wealthy, scaling back regulatory oversight of Wall Street, and offering an infrastructure plan that consists mostly of tax breaks to corporations to encourage them to build projects that they’ll then charge the public tolls in order to use.
Yet the myth of Trump the populist persists. Stephen Moore, an economic adviser to Trump and perhaps the party’s foremost advocate of trickle-down economics, recently proclaimed, “Just as Reagan converted the GOP into a conservative party, Trump has converted the GOP into a populist working-class party.” His trips to the Rust Belt with Trump, Moore testified, made him realize just how much help the working class needs. And he intends to help Trump deliver that help – in the form, of course, of tax breaks for the wealthy and corporations. What a heartwarming tale.
Republicans have always struggled with a quandary presented by their economic ideology, which is that it’s difficult to get majority support for a set of policies intended to shower benefits on a small portion of the population. When they argue about it explicitly they use a kind of rhetorical redirection, claiming that cutting rich people’s taxes isn’t really about rich people at all, but is actually intended to help the middle class and even the poor. The rich themselves are merely a vehicle to accomplish this noble end, unselfishly accepting the government’s largesse on behalf of their lessers.
Needless to say, there are only so many people you can persuade with that argument. So in order to compensate, Republicans have complemented their economic case with a menu of social issues with which they can demonize their opponents. Those Democrats hate America, Republicans would say, they’re weak, they don’t love God the way you do, they want to take your guns, they want to force your kids to get gay abortions. Often enough, it worked.
Trump said most of those things in the 2016 campaign, but you could tell that he was just going through the motions, ticking off the boxes to reassure ideological conservatives that they didn’t have anything to worry about. The true beating heart of his appeal was a slightly different kind of culture war, one based on rage and resentment at cultural change and the declining status of working class white men. With his attacks on immigrants, racial minorities, and an “establishment” of Washington politicians and economic powers-that-be, Trump convinced them that it was finally their turn: their turn to say whatever they want, their turn to have their interests put first, their turn to see their communities revived and their pride restored.
But now, Trump is filling up his administration with, guess what, Washington politicians and representatives of the economic powers-that-be, whose top priorities are tax cuts, deregulation, and destroying the safety net, including the privatization of Medicare. The idea that they’ll be laboring to serve the interests of the working class is a joke. Yet it’s a joke people somehow keep telling with a straight face.
Paul Waldman is a contributor to The Plum Line blog, and a senior writer at The American Prospect.