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Edward Goldberg

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Newt and the Refugees of Globalization

Posted: 01/25/2012 8:14 pm

What is most surprising about Newt Gingrich's continuing success in the Republican primaries is that it is a surprise. No matter how hard Mitt Romney tries to fit a square peg into a round hole, his version of Republicanism no longer appears to represent the majority of the party. Globalization and its takeover of the American continental market has forced the traditional Republican Party, the guardians of the American marketplace, into a forced retreat. While the refugees from globalization, the people who have been frightened or hurt by the changes brought on by the internationalization of the American marketplace, swell the Republican ranks.

The party that was founded by uniting Lincoln's railroad clients and Whig business-friendly philosophy with northern abolitionist has now more in common with William Jennings Bryan's populist Cross of Gold Speech than with Eisenhower, Nixon or Rockefeller.

The modern day version of the Lincoln coalition, the alliance conceived by Lee Atwater and nurtured by Karl Rove, made up of business interests, the religious right and traditional conservatives has now fragmented.

The Atwater/ Rove coalition worked wonderfully, as long as there was an economic status quo. All its members could rally around the mantra of free enterprise. It was, however, truly a coalition of the convenient. The issues of big business were basically not relevant to the rest of the coalition, and big business in general ignored the issues that were important to the other members of the coalition. There was an unspoken agreement that said we would use our money and votes for your issues and you will use your votes for our issues but, basically, we do not need to interact. And since neither group of issues affected the other in the most pragmatic sense, the alliance within the party worked perfectly.

The traditional Republican brand that Mitt Romney represents came into ideological maturity during America's post Civil War Industrial revolution. In the 40 years from 1860 to 1900, America went from hovering around the 8th or 9th largest economy in the world to being by far the largest. And in the process created the first modern continental marketplace.

The Republican Party was the first of the parties to recognize industrial interests and to have a sense that something economically wonderful and new was happening in post civil war America. They were the political handmaidens of the American industrial revolution.

But this 140-year-old fusion of the dominant and massive home market with the myth of American exceptionalism appears to have created a belief system that made it almost impossible for the traditional Republican Party to see that globalization was turning its brand, and the American economy, inside out.

What is apparent in retrospect, but was difficult to see in the early days of globalization, is how rapidly the American economy changed and how relatively quickly the Americas' continental marketplace was taken over by globalization. In 1982, industrials made up 67 percent of the companies included in the Dow. Today, they represent only 30 percent. Meanwhile, technology went from 3 percent to 17 percent in the index and financials went from 3 percent to 13 percent.

As shocking as the Dow numbers are, however, they truly do not tell the whole story. For even though industrials still make up 30 percent of the index today, they don't show that in the new globalized economy much of American manufacturing is not manufacturing at all. What we used to call manufacturing is now actually sourcing, assembling, designing, marketing and financing; essentially international trading. In the technology sector, America's so-called growth business, cell phones, laptops and various other products do not even go through the assembly stage in the United States.

Pat Buchanan in the 1990s was the first Republican to realize that the de-industrialization of America created an opening to expand the Republican base with a new constituency made up of the refugees from globalization. These were the people who were being devastated or were frightened by globalization but, because of cultural and racial reasons, could not easily find a home in the Democratic Party. And to the ire of the Republican Party establishment, Buchanan focused his 1996 presidential campaign on these voters.

These new populist Republicans have now become the tail wagging the Republican Dog. In many ways, they are the children of the in roads that Nixon first made into a socially unhappy middle class. People whom the Democratic party failed to listen to and protect from globalization, who found a voice in the Republican Party's attack on big government in its traditional isolationist/American first wing, and its acceptance of value voters.

This is not to say that Big Business and the Republican Party do not still have some shared interest, primarily among them lowering taxes. However, the need to compete in a globalized not-continental marketplace has caused a defining cultural divide between big business and these new Republicans.

As the descendants of Pat Buchanan's rank and file continued to increase their numbers within the Republican coalitions, nominal political tag words have diverged in their meaning between the Republican coalition members. For the new Republicans, championing free enterprise and individual rights means a very different thing than the traditional Republican approach of big business being championed by the government, a tradition that had gone back to Lincoln's Whig roots with government support of canals and railroad right of ways. For the new members of the Republican Party, government support of big business, whether through regulations, TARP, bailouts or investments in solar energy, is not correct.

Government not only failed these new Republicans in protecting them from globalization, but they see as the root of this failure an unholy alliance between the government, big business and the internationalization of the American marketplace. To these people, Mitt Romney, with his background as a financier and corporate buyouts specialist, represents much that is wrong with America.

 

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