Adair Turner's account of financial markets is insightful but misunderstands the role of the state in creating financial crises.
In his excellent Liberty Forum essay on party politics, Sidney Milkis mentions Richard Nixon’s role in shaping the party system that we have today. The point is worth exploring in more detail. President Nixon’s story tells us a great deal about where the parties have been since the middle of the 20th century, and whither they are tending in the 21st.
“Progressive” is not a word that one normally associates with Nixon, but it is one key to understanding his life and politics. His roots ran deep into Progressive soil. He was born in California in 1913, during the governorship of the legendary Progressive Hiram Johnson, who would go on to serve in the U.S. Senate from 1917 to 1945. His father voted for Progressive Party candidates Theodore Roosevelt in 1912 and Robert LaFollette in 1924. His mentor in college was the Progressive historian Paul Smith, who pointed to yet another influence from the movement: “Dick Nixon was a great admirer of Woodrow Wilson . . . Richard Nixon, through his whole political life, quoted Woodrow Wilson more than any other man.” As President, he hung Wilson’s portrait in the Cabinet Room.
As Milkis explained in his book The President and the Parties (1993), Wilson and other Progressives advocated primary elections as a way of breaking the grip of traditional party machines. California was an early adopter of primaries. Because this reform had its intended effect, party organizations were weak, and candidates had to build their own campaign structures. This environment spawned the profession of political consulting, one of whose early practitioners was Nixon’s fellow California Republican, Murray Chotiner. In 1946, when Nixon was preparing his first race for Congress, Chotiner signed on for $500 a month. (Today’s consulting fees would have more zeroes.)
Until 1959, the state had an unusual system of “cross-filing,” whereby candidates could seek the nomination of more than one party. In his race for reelection to the House in 1948, Nixon won the Republican and Democratic nominations, ensuring that he was unopposed in the general election. In 1950, he ran for the Senate. He cross-filed to compete in the Democratic primary, which he had little chance of winning, but the move gave him an opening to make an early pitch to voters that he would need in the fall. Chotiner sent thousands of Nixon leaflets to registered Democrats in envelopes bearing the legend, “As One Democrat to Another”!
Nixon was crossing party lines, albeit in a way that prompted accusations of deceptive tactics. (This was the campaign that left him with the indelible nickname of “Tricky Dick.”) A politician from such a background would tend to regard parties as vehicles, not objects of affection and loyalty.
As we shall see shortly, Progressivism influenced Nixon’s policies as well as the political environment in which he emerged. In the late 1940s, another important aspect of Nixon’s political career became evident. He was a plausible Senate candidate because of the national publicity he garnered from his work on the House Committee on Un-American Activities. Based on evidence and testimony from the ex-communist journalist Whittaker Chambers, Nixon had helped expose former State Department official Alger Hiss as a Soviet spy. (The case was controversial for decades, but documents declassified in the 1990s left little doubt about Hiss’s guilt.)
Nixon’s confrontation with Hiss set a template for the rest of his career—and arguably for American politics in general. Hiss, from humble beginnings like Nixon, had nonetheless made himself part of the New Deal establishment and, with the exaggerated snootiness sometimes evinced by risen men, made clear that he looked down on the freshman congressman from California. During one of the hearings at which Hiss haughtily denied being a communist, he sneered: “I attended Harvard Law School. I believe yours was Whittier?” (It was actually Duke.)
Chambers later reflected on Nixon and the FBI agents who nailed Hiss, writing: “The inclusive fact about them is that, in contrast to the pro-Hiss rally, most of them, regardless of what they had made of themselves, came from the wrong side of the railroad tracks.” And this: “No feature of the Hiss case is more obvious, or more troubling as history, than the jagged fissure, which it did not so much open as reveal, between the plain men and women of the nation, and those who affected to act, think, and speak for them.”
Nixon had always been sensitive about his modest origins. His college had a social club for would-be aristocrats, so he founded one for his fellow working-class students. The Hiss case carried this class-consciousness into national politics. In his 1948 acceptance speech, Harry Truman gave voice to a commonly held belief when he said that “the Democratic Party is the people’s party, and the Republican party is the party of special interest, and it always has been and always will be.” With the emerging power of the academy and the administrative state, Nixon understood that a Republican could flip the narrative. He could portray the professors and the bureaucrats as part of the new elite—and run against them as effectively as Truman had run against the old elite of old money.
He beat the humble-beginnings drum in his political campaigns, from his mention of his wife’s “respectable Republican cloth coat” in his 1952 Checkers speech to his invocation, in accepting his party’s presidential nomination in 1968, of his parents’ economic struggles. As President, he wrote that the solution to our problems “lies in the hands of the democratic citizenry and not of a privileged elite.” He had speechwriter Pat Buchanan draft much harsher words for Vice President Agnew to say: “A spirit of national masochism prevails, encouraged by an effete core of impudent snobs who characterize themselves as intellectuals.”
Nixon’s animus was genuine. As the White House tapes reveal, after National Security Adviser Kissinger met with some Ivy League presidents, the President was angry:
Why I’ll never let those sons of bitches in the White House again. Never, never, never. They’re finished. The Ivy League schools are finished. . . . Henry, I would never have had them in. Don’t do that again . . . They came out against us when it was tough . . . Don’t ever go to an Ivy League school again, ever. Never, never, never.
The odd thing, of course, was that Kissinger had been a Harvard professor as had his mentor, William Y. Elliott, an adviser to Nixon’s 1960 campaign. Nixon stocked his administration with a goodly number of Ivy Leaguers, such as Budget Director Caspar Weinberger (Harvard A.B. and J.D.) and Secretary of Defense James Schlesinger (Harvard A.B., M.A., Ph.D.). Nixon may have had a populist’s disdain for intellectual snobbery, but he also had a Progressive’s respect for expertise and credentials.
Daniel Patrick Moynihan, a former Harvard faculty member who served on Nixon’s White House staff, said:
In his first two years of office Nixon adopted a legislative and administrative program that was not so much liberal as progressive, similar in ways to that of Woodrow Wilson, whom he admired most of twentieth-century presidents.
Nixon started the Environmental Protection Agency and signed the bill creating the Occupational Safety and Health Administration. His plan for a guaranteed annual income fell short in Congress but it did lead to the Supplemental Security Income (SSI) program. Two of his successors, Bill Clinton and Barack Obama—Democrats, both—acknowledged that their proposals for national health insurance owed a good deal to the proposals that Nixon had offered decades earlier.
Many congressional Republicans were uneasy about Nixon’s policies. The unease was mutual. For all of his haunting of the GOP’s rubber chicken circuit while in pursuit of the party’s presidential nomination, Nixon never really had much use for the Republican Party as an institution. In private conversations with chief of staff H.R. Haldeman, he mused about starting a new party. That idea never went anywhere, but Nixon did create a big and sophisticated political organization outside of the normal party structure. The Committee to Reelect the President collected vast sums of money while pointedly avoiding any mention of the GOP. Nor did the CRP give any help to down-ballot Republican candidates. Bob Dole, chairman of the Republican National Committee at the time, chafed at his peripheral role (and gave Nixon’s committee its better-known moniker, “CREEP”).
In the election of 1972, even as Nixon carried 49 states against the hapless George McGovern, Republicans gained a mere dozen seats in the House and actually suffered a net loss of two in the Senate. Two years later, Watergate had forced Nixon out of office and the economy was in trouble. In the midterm elections, Republicans suffered massive damage in both the House and the Senate. America, it seemed, was done with Nixon.
Except that it wasn’t. Before long, Republicans were quietly seeking Nixon’s advice. And whether or not they acknowledged it, politicians of both parties were following his example. In 1984, President Reagan’s reelection campaign focused exclusively on what campaign manager Ed Rollins called “a big win, a 50-state strategy.” Like Nixon in 1972, Reagan ended up carrying 49 states. But also like Nixon, he offered Republicans little help down the ballot, and the GOP made only paltry gains in the House. In the long run, the strategy might not have been wise. With the important exception of tax reform, Reagan’s second term was a legislative bust.
Perhaps the most Nixonian President of recent decades was Bill Clinton. Despite their superficial differences, Nixon himself recognized their kinship. In 1994, former Nixon aide Roger Stone recalled what the ex-President said about the sitting one:
You know, he came from dirt and I came from dirt. He lost a gubernatorial race and came back to win the Presidency, and I lost a gubernatorial race and came back to win the Presidency. He overcame a scandal in his first campaign for national office and I overcame a scandal in my first national campaign. We both just gutted it out. He was an outsider from the South and I was an outsider from the West.
In his new book The Nixon Effect, Democratic consultant Douglas Schoen writes that the similarities involved policy, not just biography: “The concept of triangulation is what links Nixon and Clinton most closely at the political level: their positioning of themselves between the ideological and political poles.” On welfare reform, for instance, Nixon triangulated by moving Left, while Clinton triangulated by moving Right. And like Nixon, Clinton was a source of great frustration to members of his party in Congress.
Schoen’s great insight is that policy eclecticism does not necessarily quell political polarization. “What made Nixon so divisive domestically,” he writes, “was that while his governance was mostly centrist, and sometimes flat-out liberal, his politics were more confrontational.” Clinton, likewise, did not placate Republicans. He enraged them, even as he struck deals with them.
And speaking of rage . . . we now enter the Age of Trump. The aforementioned Roger Stone, one of the few surviving Nixon aides still active in politics, has served as an informal consigliere to the soon-to-be 45th President. Stone, who literally has a picture of Nixon’s face tattooed on his upper back, told a reporter: “Nixon talked about the silent majority, and the forgotten American — just like Trump is doing.” Stone spun Trump’s wealthy background by emphasizing that the real estate magnate never lost his roots in Queens, New York. “His father Fred [was] like Donald, more comfortable in the company of carpenters or plumbers than other wealthy people. He’s the only billionaire I know who is not elite.”
The “blue collar billionaire” image is nonsensical, of course. When Trump is looking for a new wife, he eyes supermodels from Slovenia, not hairdressers from Scranton. The scam is as old as it is effective. As Alexander Hamilton said at the Constitutional Convention: “Demagogues are not always inconsiderable persons. Patricians were frequently demagogues.”
Trump has even less attachment to the party system than Nixon did. Whereas Nixon merely pondered the idea of a new party, Trump made a run at the Reform Party presidential nomination in 2000. Then he registered as a Democrat. “In many cases, I probably identify more as Democrat,” he told CNN’s Wolf Blitzer in 2004. “It just seems that the economy does better under the Democrats than the Republicans.” Then he re-registered as a Republican in 2009, as an independent in 2011, and then went back to the GOP in 2012. During the 2016 campaign, he attacked GOP leaders and frequently spoke of “the Republicans” in the third person, as if he did not consider himself one of them.
In contrast to Ronald Reagan—but again, very much like Nixon—candidate Trump shunned a full embrace of conservative ideology. He talked about cutting government regulations, at least as they affected favored businesses such as the oil industry, but also suggested that he would protect entitlement programs and other large swatches of the administrative state. He promised to repeal Obamacare, but unlike libertarians, he did not see any inherent problem with a government role in health care. During the campaign, he merely played to popular opinion that the program was working poorly, and he vaguely promised to replace it with something better.
Milkis emphasizes that Trump is a polarizing figure in a polarizing era. In the Nixon tradition, Trump combines an ideologically-mixed approach to policy with a confrontational approach to politics. In his 1991 book In the Arena, Nixon wrote what could well be the Trump motto:
Politics is battle, and the best way to fire up your troops is to rally them against a visible opponent on the other side of the field. If a loyal supporter will fight hard for you, he will fight twice as hard against your enemies.
As Milkis says, the Democrats have been far from blameless in our country’s deepening polarization. I would go a step farther. Democrats used the “Republicans are racist” theme so often and so reflexively over the years that it lost its persuasive power. When the GOP did in fact nominate a candidate who had repeatedly retweeted neo-Nazi material, Democratic attacks elicited shoulder shrugs and eyerolls. During the fall campaign, longtime Democratic operative Howard Wolfson acknowledged to Frank Bruni of the New York Times:
I’m quite confident I employed language that, in retrospect, was hyperbolic and inaccurate, language that cheapened my ability—our ability—to talk about this moment with accuracy and credibility.
Comedian Bill Maher said of previous GOP candidates John McCain and Mitt Romney: “They were honorable men who we disagreed with, and we should have kept it that way. So we cried wolf and that was wrong.”
Milkis mentions negative partisanship (sometimes called “aversive partisanship”), in which partisans regard people on the other side of the field not just as mistaken but as evil—or, as Trump would say, “so bad.” This phenomenon helps explain the paradox of increased party-line voting at a time when people have a low regard for parties, not excluding their own. Whatever the faults of their own side, partisans increasingly believe, the other side is worse.
Conservative former radio host Charlies Sykes writes:
No matter how bad Mr. Trump was, my listeners argued, he could not possibly be as bad as Mrs. Clinton. You simply cannot overstate this as a factor in the final outcome. As our politics have become more polarized, the essential loyalties shift from ideas, to parties, to tribes, to individuals. Nothing else ultimately matters.
As long as negative partisanship works at the polls, politicians will exploit it.
Monica Crowley, who worked for Nixon during his post-presidential years and who wrote books about the experience, has joined the Trump staff. In Nixon Off the Record (1996), she recalled Nixon’s admiration for Woodrow Wilson, and noted that Nixon particularly liked Wilson’s 1890 essay, “Leaders of Men.” This passage from Wilson explains a lot about Nixon—perhaps even more about Trump, and about what is in store for our party politics in the near term:
The competent leader of men cares little for the interior niceties of other people’s characters: he cares much-everything for the external uses to which they may be put. His will seeks the lines of least resistance; but the whole question with him is a question of the application of force. There are men to be moved: how shall he move them? He supplies the power; others supply only the materials upon which that power operates. The power will fail if it be misapplied; it will be misapplied if it be not suitable both in kind and method to the nature of the materials upon which it is spent; but that nature is, after all, only its means. It is the power which dictates, dominates: the materials yield. Men are as clay in the hands of the consummate leader.