The Bear’s Lair: Trump’s policies represent traditional Republicanism

Donald Trump dressed as Abraham Lincoln (AI gen)Former President Donald Trump is often accused of not having a policy program for a potential second administration. Commentators talk of his followers as being mere cultists and suggest that the soft-left belligerence of the George W. Bush administration represented more authentic “Conservatism.” This is wrong; on most subjects (I will discuss the exceptions) Trump has a clear policy position that is close to that of pre-1952 traditional Republicans and chimes in well with his followers’ policy instincts. Trumpism is not a cult; it represents a reversion to the sound policies of Presidents James Garfield, William McKinley and Calvin Coolidge.

There were three central strands to traditional Republican policy, all of which Trump showed in his first term and has espoused for his second: isolationism, nativism and protectionism.

Isolationism as a policy dates back to George Washington’s 1796 Farewell Address:

“The great rule of conduct for us, in regard to foreign nations, is, in extending our commercial relations, to have with them as little political connexion as possible.”

The post-Civil War Republicans revered Washington, as the Democrats did Jefferson and Jackson, and attempted to manage foreign affairs on this principle, with the 1919 campaign led by Senator Henry Cabot Lodge against Woodrow Wilson’s League of Nations the most prominent example. Herbert Hoover alone was an internationalist, and his policies were so unsuccessful in other respects that his influence was limited. Only after World War II, when the Robert Taft faction was defeated by the pseudo-Democrat Dwight Eisenhower in 1952, did isolationism fall out of favor. Today the Eisenhower-era objections to isolationism are spurious; there is no Cold War (unless the foolish neocons start one) and Trump recognizes that a policy of strength while avoiding international meddling is by far the most likely to preserve U.S. influence and world peace.

“Nativism” is in no way racist; it simply means favoring the existing inhabitants of the United States over newcomers, whether legal or illegal. The Republican Party was founded on extending that favoring to domestic African-Americans; the Thirteenth, Fourteenth and Fifteenth Amendments put that policy into legal reality although not alas into day-to-day practice. The high point of this nativist policy was the Immigration Act of 1924, which restricted immigration sharply and thereby allowed the American working class in the years after World War II to enjoy the highest standard of living of any civilization in world history. That Nirvana has been steadily eroded by the permissive Edward Kennedy-sponsored 1965 Immigration Act, which led to first a trickle and then a horde of new entrants, their number bloated by innumerable “indentured servitude” deals (H1B, H2B etc.) created by the voracious cheap labor lobby. On immigration, Trump embodies the ideals of President Coolidge: a society entirely free from racial prejudice, where all citizens enjoy the highest possible standard of living, assisted by tight, well-enforced barriers against excess foreign immigration, legal or illegal.

Protectionism was the quintessential Republican policy between 1862 and 1932. Its purpose was to allow the United States to pay its workforce more than anywhere else in the world; thus despite the increase in domestic prices it caused, it was immensely popular. Its main problem was that it was combined with unlimited immigration, so high U.S. wages were continually diluted by cheap competition from new immigrants, while excess profits flowed to the Robber Barons. Furthermore, by the time of the McKinley Tariff of 1890, U.S. protectionism, combined with German protectionism (from 1879) and French protectionism (from 1892) was seriously damaging world trade, and was especially crippling to the economy of Britain, which persisted in a suicidal policy of unilateral free trade.

In a more rationally run world, an international conference would have set firm limits on the post-1860 surge in protectionism, while allowing Britain and its colonies to raise a modest “Imperial Preference” tariff along the lines of the 1932 Ottawa Agreement. Such a world might have prevented World War I and resulted in an immensely happier 20th and 21st century. The Congress System, invented in 1815 by Metternich and Castlereagh, might have facilitated this – but then by the end of the century that had been abandoned by lesser men.

The Smoot-Hawley Tariff of 1930 then raised the average tariff on U.S. imports to 45%. Combined with the damage already done to the global economy by World War I, this was sufficient to cause a 65% decline in world trade between 1929 and 1933 and combined with other foolish policies monetary and fiscal, plunge the United States into the Great Depression. As a result, all post-war Republican Presidents had an inordinate fear of tariffs, treating them with the same horror as had John C. Calhoun, who loathed their effect on the agrarian slaveholding South. Trump’s proposed 10% general tariff, with which I dealt in a recent column, will boost domestic living standards and provide much needed revenue for the Treasury, while bringing few of the distorting effects of the McKinley or Smoot-Hawley imposts, simply because the distorting effects of a tariff increase as the square of its rate, so the Trump tariff will distort trade only 4.9% as much as did Smoot-Hawley. Combined with tight restrictions on immigration, it will boost U.S. living standards rapidly, particularly for blue-collar workers of all races.

One Trump policy that became standard Republican policy in the 1920s was deregulation (there was not much to deregulate before 1900). Presidents Warren Harding and Coolidge removed many of the restrictions that had been imposed by the Progressives, benefiting the economy considerably by doing so. In later years, the Republicans were very slow to remove New Deal regulations and Nixon, a lawyer without much economic understanding, added new burdens to the economy by creating the Environmental Protection Administration. The Bushes, masters of leftist backsliding after the false dawn of Reaganism, also tended on balance to add to regulation rather than remove it. Trump’s vigorous deregulation in 2017-20, which brought rapid improvement in living standards has been reversed by the Biden administration; four more years of such deregulation, particularly killing regulations imposed in the name of the “climate change” hoax, will thus be immensely beneficial.

There are two exceptions to Trump’s fealty to pre-1952 Republicanism. One is monetary policy. Pre-1952 Republicans, without exception, favored the Gold Standard. President Abraham Lincoln and his Treasury Secretary Salmon P. Chase had abandoned the link to gold in 1862, for the paper “greenbacks” but that was always regarded as a temporary expedient. President Ulysses Grant with the Coinage Act of 1873 then established a de facto Gold Standard, which was a winning campaign issue for the McKinley campaign of 1896. Thus pre-1952 Republicans were firmly identified with a policy of tight money, unlike Democrats with their stunts such as Franklin Roosevelt banning private gold holdings and setting the nation’s official gold price daily in his bathrobe.

Trump is an inflationist; it is difficult to imagine him being anything else, having made his fortune in real estate and having almost gone bust during the last significant period of money tightening in 1993-94. Emotionally, he may claim to like a Gold Standard – he has friends like Judy Shelton who favor a return to gold – but in practice he liked the zero interest rate policies of 2010-21 and would probably favor returning to them, seeing artificially low interest rates as being good for the real estate business. If he made Shelton Fed Chair, we might get a really good monetary policy, but otherwise the odds must be against it. However, the same unhappy proclivity is true of any other Republican since Reagan.

The other point where Trump fails to adhere to traditional Republicanism is in spending policy; he appears to have little interest in balancing the budget and is determined to protect from change the entitlements programs of Social Security and Medicare. He is thus at the opposite end of the spectrum from the admirable Coolidge, who with Andrew Mellon as Treasury Secretary halved the Federal budget in six years. However, all other recent Republicans with the exception of Gerald Ford have been unsound in this respect, the two Bushes being worst – the father raised taxes to pay for profligate social spending, even though that period’s Peace Dividend in defense spending would have balanced the budget had he not done so, while the latter took an admirably balanced Budget resulting from the efforts of President Clinton and Speaker Newt Gingrich and frittered it away, both on feckless military adventures and on sheer pork-barrel waste.

Thus, Trump is a traditional pre-1952 Republican in all but two policy areas, a much better mix than we have had from other recent Republican Presidents and candidates. Given his propensity for bold action, he is by far the best alternative currently available. In the best possible world, we will re-focus on monetary and budget policy after 2028, when Trump has enjoyed a successful term and made traditional Republicanism the governing philosophy preferred by a solid majority of the American electorate.

Trump can be traditionally Republican in slogans as well: “Trump and the Full Dinner Pail” ought to do it!


(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)