Note: The Abundance Conference is this week. A lot of sharp minds are coming together to discuss how we build a country where there’s more good stuff. And yet, if you look outside, you notice that neither party is particularly convincing right now in its commitment to abundance or the related challenge of the high cost-of-living. At least on one level, that’s a little surprising given how clearly voters say in polls that the cost-of-living is their number one issue. So I wanted to explain each party’s chief intellectual barrier to being better on inflation. This week’s article focuses on Republicans. Next week’s is on Democrats.
In one of the great lines from Game of Thrones, Lord Varis says about Petyr Baelish that “he’d burn this country to the ground if it meant he could be King of the Ashes.” That’s Donald Trump. More specifically, that mentality is why MAGA and its president -who were swept to power by voter frustration with inflation- are so consistently terrible on the cost-of-living. They care a lot more about the vibes of status dominance than they care about economic efficiency, growth, broad-based prosperity, or inflation.
One of the non-political studies that best explains MAGA populism is from Solnick and Hemenway’s “Is More Always Better? A Survey on Positional Concerns.” In this experiment, people were asked whether they would rather have a salary of $100,000 while their colleagues received a salary of $200,000 or rather get $50,000 while their colleagues got $25,000. Respondents were also told to assume prices would be the same regardless of which option they chose. The rational choice is obviously the first option. And yet, approximately half of respondents chose the second. It’s a baffling decision until you recognize that some people are so preoccupied with their place in the pecking order that they actually value relative status over being objectively better off. That’s what Trump, to the thrill of his MAGA base, is doing on issue after issue.
Throwing Matches at Sound Economic Policy
One of the things that makes life less expensive for Americans is that we can buy lower cost goods and services from abroad. But between 1) having low to no tariffs so as to benefit consumers and 2) trying to use tariffs to force other countries to bow before the President, MAGA finds the second much more emotionally satisfying. Relatedly, the President loves that high tariffs lead business leaders to come before him pleading for exemptions.
One of the subtler but important aspects of international trade is that it rests on an equality of status. This is clear if, like I do, you live near the Mexican or Canadian border. The Trader Joe’s parking lot near my house consistently has cars with Quebec license plates in it; we in turn go to Montreal if we want to go to the nearest IKEA. It’s chill. And that’s exactly the problem from the MAGA perspective. There’s no dominance there.
Maintaining a good relationship with Canada should have been the easiest diplomatic task ever. How did they screw this up? It’s because, rather than be pleased with having a friendly neighbor and accepting the benefits of that kind of relationship, they looked at the relative economic size of the two countries and yearned to leverage that to force Canada to come lick MAGA’s boots. The cost benefits of liberalized trade paled in comparison to their psychological thirst for dominance. What is the result of this? The U.S.-Canada relationship may be irretrievably damaged even as Americans pay higher prices. Our most important international relationship has been burnt to a crisp so that MAGA could try to feel positionally superior.
This approach goes far beyond Canada. Virtually every Trump administration tariff has been, more or less, an attempt to use America’s market size to force other countries to kneel before the king. It’s the kneeling they want, and when they don’t get it, they lash out. See for example Trump’s huge new tariffs on India which were ostensibly about Indian purchases of Russian oil (though the EU and US continue to purchase some Russian exports too), but were actually just because Trump was annoyed that the Indians didn’t come obsequiously crawling before him after his first round of tariffs of them. What is the result? India is furious and rapidly moving toward a warmer relationship with China, something that would have been unthinkable just a few months ago.
Separately, the Federal Reserve is holding steady on interest rates to try to help keep inflation in check amidst Trump’s tariffs. But Trump wants lower interest rates. So he’s doing what he can to burn the Federal Reserve’s independence so that he can be king of monetary policy. The BLS reports employment figures the king doesn’t like? Burn it, so that MAGA may feel that it has dominance over which facts get reported.
Status is Everything in MAGA’s Populism
Last week,ICE arrested immigrant firefighters *during a wildfire.* This is not only plainly idiotic; it also makes it harder for state and local governments in fire-prone areas to hire contract firefighters. But MAGA doesn’t care, because in the MAGA mind, immigration is not primarily about opportunity, efficiency, freedom, or the tangible benefits that immigrants provide like fighting fires; it’s about status.
They want there to be a crystal-clear, militantly policed status hierarchy between native-born and foreign-born and, within the native-born, a hierarchy based on whose ancestors got here first. If ruthlessly imposing that hierarchy means higher costs for building new housing and higher costs at the grocery store (because immigrants are important in those industries), then so be it. Burn consumers’ money if that’s what it takes for MAGA to feel that their relative status has been safeguarded.
In energy policy, the Trump administration can’t just say it wants cheap energy. No, it wants, in its own words, energy dominance. And yet, they are at war with solar and wind because those are not culturally coded as conservative. Energy dominance apparently means not just that America can produce more energy than other countries and thus theoretically dominate them in that space (never mind the myriad problems with that theory) but also that MAGA energy gets to dominate non-MAGA energy.
Likewise, the war on mRNA vaccines is burning the path to helping people not get cancer. But never mind that, the nerds in the medical establishment need to be put in their place. The Trump administration’s war on higher education is not doing anything to make college cheaper, but who cares, doesn’t it feel good to punch some elites? In so many different ways, MAGA is just vibes politics all the way down.
It’s not that they want a smaller economy per se, if you could somehow grow the economy while also achieving some sort of cultural victory, they’d be for that, but wherever some other goal like growth or affordability is pitted against relative status, they will pick status. This is one of the ways in which MAGA’s counterproductive instincts on the cost-of-living are similar to the far left’s: both aren’t against abundance per se, but they are both far more emotionally committed to certain narratives about who the good guys are and who the bad guys are than they are to pragmatic problem solving that lowers costs.
Of Builders and Burners
MAGA’s poor approach to the cost-of-living is both a missed opportunity for Republicans and a conundrum for right-leaning Abundance folks. It’s a missed opportunity because, in practice at the state-level, it is red states that are generally doing a better job at keeping the cost-of-living down, most notably via cheaper housing and lower energy prices. Red state YIMBYs are on an absolute tear right now. A more rational Republican Party would plant its center-of-gravity on that fact. Instead, the Trump administration is frittering away that advantage. Democrats could capitalize on this if we didn’t have our own problems (which I’ll discuss next week).
What also makes it a mistake is that the main thing the MAGA base was after (a big cultural vibe shift) happened as a result of Trump winning re-election, not because of tariffs or spiking wind turbine projects. They could have gotten what they wanted *without* the economic self-sabotage. They are making a lot of mistakes right now. It should also be remembered that many of the Biden administration’s key mistakes around inflation were made in 2021 and 2022. It was only later that they paid the political price. The Trump administration seems determined to do a remake of that.
Which is all to say that we should not expect the Trump administration or the broader MAGA intellectual camp to be good on cost-of-living anytime soon. In fact, we should expect MAGA to resist policy efforts aimed at abundance and affordability. After all, if everyone is prosperous, no one is king, and they really want to be the kings of American culture.
This is all a real thorn in the side of right-leaning Abundance advocates. If you’re at the Foundation for American Innovation (FAI) or the American Enterprise Institute (AEI) or you’re just a normal suburban Republican with low tax preferences and a pro-market orientation, you have an enormous political challenge in front of you. You have to convince the Republican base to abandon “King of the Ashes” politics.
That is a tall order. But it’s also a necessary one. We can’t have nice things if one of our two parties is far more dedicated to burning things than building them. We can’t have a more affordable society by having less of everything. And we can’t honor our traditions with political leaders who govern based on status anxieties and nihilism. Next year, we celebrate our country’s 250th anniversary. Our forefathers built this country. If we want to live up to their legacy, we too must be builders, and that includes Republicans.
With any luck, conservative politics won’t stay burn-oriented for too long. They’ll keep the anti-woke cultural politics but ditch the arsonistic economic policy. The task before Abundance conservatives is to lay the groundwork for that build-oriented conservatism. Those of us who are Abundance Democrats should wish them godspeed in that.
-GW