If the economy rebounds quickly, then Americans will likely care about the same things they do now. They will want quality education for their children at an affordable price, both in K-12 (this is why property taxes were a large issue in many states pre-crash) and (especially) for college. They will also want to feel their economic status is improving. For the working class, this means seeing rising incomes without having to work more hours. For the uniquely American class of the mass affluent, the upper middle income information economy workers, it will mean wanting stable, market-friendly economic policies so their natural advantage in the modern marketplace can reap its rewards in income gains and stock appreciation. And most Americans, particularly those under the age of 50, will want some resolution to the culture wars on roughly the grounds they have reached in their private lives: a quiet acceptance of roughly traditional outcomes without overt legal hectoring or penalties. Tradition and tolerance.
Conservatives need however to be prepared for a more challenging possibility: the possibility that the economy will perform poorly, even very poorly, for some protracted time. In this case, issues of security and prevention may soon displace the politics of tolerance and opportunity.
Working class voters will want protection for their jobs, which will likely lead to demands for restrictions on immigration, trade barriers, increased union power, and other measures to limit layoffs and downsizing. The mass affluent will have kept their jobs but lost their wealth. They will want housing price supports and policies to refloat their portfolios. Both sets of voters will redouble their focus on education, the working class because that is the only way their children can avoid a downturn in their lives; the mass affluent to ensure their children stay on top. Both sets of voters will also demand re-regulation of the financial sector, both out of a pragmatic judgment that this will ensure financial crashes will never happen again and out of a sense of justice, that those who supposedly caused the crash are made to pay for it. The latter impulse will be particularly strong because of the multi-trillion dollar taxpayer bailouts steered toward financial institutions.
The political sentiment in this worst case scenario will be “never again.” This will not be the first time American politics has been governed by the “never again” principle. The Great Depression was perceived to have been caused by excess financial speculation and too much market instability. “Never again” led to the New Deal, permanent federal involvement in the economy, and the beginnings of the welfare state. World War II was perceived to have been caused by U.S. isolationism and the unwillingness to confront expansionary states. “Never again” led to a permanent U.S. engagement in the world through a web of alliances, a permanently large standing military, and the Cold War. The Great Stagflation of the 70s was perceived to have been caused by overregulation of the economy, both by government and by large unions and corporations. “Never again” led to a fierce anti-inflation policy, avoidance of tax hikes, and a commitment to reviving entrepreneurial market forces–and to a desire to restrict immigration and free trade among those working class voters whose industries never recovered. Political parties and entrepreneurs who want to succeed in this world will ignore the “never again” principle at their peril.
Henry Olsen is a senior fellow at the Ethics and Public Policy Center.