Striking the Grand New Bargain
What a new party of workers means
Toward the end of the 2024 election campaign, I started using the term “Grand New Bargain” to describe the new Republican coalition (the term is a blend of “Grand Old Party” and the “New Deal,” with a twist of the Grand New Party). This Grand New Bargain is a fusion of working-class interests and tech disruptors. In my latest for City Journal, I build out the Grand New Bargain framework to explore what this new coalition means in terms of policy.
Right now, Republicans have an opening with the working-class voters who proved instrumental to their win. Institutional capture by progressive elites has pushed the Democratic Party far to the left on cultural issues, repelling many Americans without a college degree. Skyrocketing inflation during the Biden years ravaged the pocketbooks of working- and middle-class families. According to Census data, the inflation-adjusted median income in 2023 was lower than it was in 2019. The border crisis, supply-chain crunches, and escalating instability abroad sent the message to Americans across the income spectrum that normal had not returned under the Biden administration. As a result of racking up support from ethnically diverse blue-collar Americans upset with their economic situation, Donald Trump is the first Republican presidential nominee in 20 years to win the popular vote.
The Trump 2024 campaign also enjoyed an infusion of energy from the tech sector. Elon Musk and other tech titans see in a second Trump White House the chance to break through regulatory and institutional sclerosis that has held the United States back from a new technological frontier.
Striking a Grand New Bargain will demand balancing the impulses of more communitarian populists and those of pro-abundance disruptors. Tensions exist between Main Street and Silicon Valley at times, but so do affinities; growth is, after all, one of the greatest forms of uplift for Americans of modest means. The challenge facing a Grand New Bargain is unlocking this growth, while also tightening the labor market and otherwise ensuring that families will benefit from a rising tide.
In terms of political economy, the Grand New Bargain demands populist and pro-growth policies. In the piece itself, I outline where a balance could be struck on immigration, energy policy, deregulation, and taxation, among other issues.
I fear that sometimes the on-going turf war between the “classical right” and the “new right” risks obscuring the deeper need for a policy synthesis and may overstate the contrasts between the Republican Party of Reagan’s era and that of the Trump years. Of course, there are incentives to emphasize contrasts, and the geopolitical situation is very different in the 2020s compared to the 1980s. Nevertheless, this more populist GOP has many continuities with the past. For instance, driving down the costs of energy is a longstanding Republican policy aim—and an essential component of any serious attempt at industrial policy going forward. Controlling immigration is fundamentally law-and-order politics. And perhaps one of the greatest indictments of the neoliberal era is that it was a slow-growth regime. There’s a reason why someone like Peter Thiel was an early adopter of populist politics; the hyper-financialization of the neoliberal period led to an economic sclerosis in the United States and elsewhere. Building back a more well-rounded economy could in fact be an investment in future growth.
Coincidentally, Henry Olsen has an interesting piece in National Review today that also looks at the policy stakes of a political realignment. Olsen emphasizes the importance of synthesis, too.
These considerations mean the forthcoming domestic agenda needs to be a synthesis of both strands of Republicanism, building something durable and new out of the old.
One example of that is a bill that Senator Tom Cotton sponsored a few years ago. His bill would have rebated to working- and middle-class taxpayers the revenue raised through President Trump’s tariffs on Chinese goods. This approach would deliver targeted tax relief to the GOP’s new voters and tie that relief to the president’s signature initiative.
Conservatives worried about the budgetary impact of this could insist on tying the rebates to increases in inflation in the goods on which tariffs are imposed. This approach would insulate the GOP from charges that the tariffs will hurt Americans through price hikes. If those hikes don’t happen or are transitory, as tariff advocates believe, the revenue could flow to the treasury and reduce the gargantuan deficit…
It’s clear that the coming crackdown on illegal immigration will cause perhaps millions of people here illegally to leave. Businesses will howl, since many look the other way and hire these people despite their status. A solid conservative-populist immigration plan needs to have a good solution to this legitimate concern.
Convincing Americans who live in declining areas to leave for the vibrant places that illegal migrants often flock to would be a good start. This “new Homestead Act” could include giving recipients of federal benefits information about jobs outside of their regions, providing subsidies to people with little disposable income to pay for a move, or allowing recipients of federal benefits such as Section 8 housing or Medicaid to take their benefits with them when they move.
Speaking of the next Trump policy agenda, Elon Musk’s and Vivek Ramaswamy’s piece in the Wall Street Journal stresses using the new Department of Government Efficiency to cut red tape.
Reihan Salam has a 10-point plan for immigration. And he raises an important point at the conclusion: “Most of all, though, the incoming administration should learn from Biden’s overreach. Not only does the public tend to shy away from drastic approaches to immigration, but the open borders left and its allies in prestige media will seek to capitalize on every misstep the Trump administration makes. President-elect Trump has a rare opportunity to impose order on the immigration system without alienating the public—and to prevent a relapse into Biden-style border chaos four years from now.”
See also this Harvard Gazette write-up of Oren Cass’s recent speech on the future of conservative economics.
A few other links:
A fascinating survey of Nietzsche’s long American legacy by Sheluyang Peng.
Greg Gerke: “The Response to Art is Everything.”
Dean Kissick on “how politics destroyed contemporary art.”
Mark Lilla on “America’s new caste system.”