Donald Trump exposes behind-the-scenes among between billionaires

Behind the hoopla and the nationalism of the Summer of Trump, a somewhat coherent set of economic policy ideas has begun to trickle out from the leading Republican presidential candidate. Donald Trump has been talking about a massive tax increase on foreign imports. He wants to punish U.S. corporations that “ship jobs overseas.” He also wants to levy a major tax hike on big-shot Wall Street investors by treating carried interest as regular income.

Many on the right dare call it treason. That includes the anti-tax Club for Growth, funded in part by Charles and David Koch, which sparred with the real estate billionaire on Twitter this week. Back in 2011, the group assaulted Trump as “No true believer in free markets,” but just “a chameleon who’ll say anything to get attention.”
Trumponomics presents a conundrum: One of the wealthiest human beings on earth seems to be cribbing from the Occupy Wall Street playbook. While other GOP candidates try to empathize with the anti-elitism within their base, none have the same fire. How can we make sense of this populist mogul? Is the consummate one-percenter a new kind of Republican?

Donald Trump announces his campaign for the 2016 Republican presidential nomination at Trump Tower in New York, June 16, 2015. REUTERS/Brendan McDermid

History suggests no. Trump is not a new kind of conservative. But he is a specific type of one-percenter. (Really, 1 percent of 1 percent of 1 percent.) From where the rest of us sit, all billionaires tend to look alike. But now, as in the past, divisions within the economic elite can be fierce, with enormous political consequences.
As a real-estate developer, Trump has a different set of material interests than, for example, the Wall Street investors he maligns with such glee. To understand his economic populism, we have to grapple with the long history of the fractious business elite.
The myth of a unified business community is a powerful one in American history. But it is also largely false. More often than not, competing economic interests have clashed fiercely over the vital issues of the day — from Alexander Hamilton and Thomas Jefferson’s ferocious battles over imposing protective tariffs to the tumultuous fights over airline industry deregulation in the 1970s. (The big carriers fought for the regulations!)
The history of capitalism suggests that sector-on-sector political fighting has been most pronounced when the economy underwent profound structural changes. The rise of industrial capitalism created just such a destabilizing moment. Early factory owners cast themselves as virtuous “producers” — unlike the usurious entrenched wealth of the merchant, banking and slave-holding classes.
In the 1830s, President Andrew Jackson declared war on the Bank of the United States because, as the historian Arthur Schlesinger Jr., put it, “no institution played a more important role in transferring wealth from the producing class to accumulators.”
As industrial capitalism expanded, its practitioners grew bolder in challenging the old order. In the 1850s, New York City’s business elite split bitterly over slavery. Amid violent sectional tensions, Wall Street financiers — deeply tied to Southern cotton picked by enslaved black hands — defended the status quo. Manufacturers, however, flocked to the new Republican Party and its promise of protective tariffs and (eventual) abolition.
By the turn of the 20^th century, mass production and the advent of gigantic, monopolistic corporations again ignited fierce conflicts between industries.

Wall Street during the bank panic in October 1907. WIKIPEDIA/Commons

The ruinous Panic of 1907 prompted widespread calls for banking reform — which the well-organized banking community worked hard to lessen. Yet equally powerful industrialists, united in trade groups like the National Association of Manufacturers (still a major business lobby today) fought back. They joined with Progressive politicians in 1913 to enact a centralized financial regulatory program. Today we know the fruit of their labors as the Federal Reserve system.
These historical examples of intra-business political conflict offer two major lessons:
One, financial services — demonized in the populist imagination as more “taker” than “maker” — is a frequent target. Two, major moments of structural change and instability predict when business will train its sights inward. Both observations help make sense of Trump’s economic populism and its successes.
In the past 40 years or so, the mass consumption industrial economy of the post-World War II era has given way to something new — often called “financialization.” Today,  investment and financial speculation generate greater profits than manufacturing, natural resource extraction or service provision. Financial institutions and the elites who run them have become the faces of Big Business, replacing the once-mighty CEOs of U.S. Steel, DuPont and General Motors, who dominated at mid-century.
As early as the 1980s, old-guard industrial executives noted the perils of this transition. In 1987, the Business Roundtable — a consortium of Fortune 500 firms — spoke out loudly against corporate raiders, leveraged buy-outs and short-term stock price manipulation, which have now become the mainstays of the modern economy. Many members of the Business Roundtable banded together in the “Coalition to Stop the Raid on America,” a bipartisan campaign for tougher regulations of hostile takeovers.

The Trump International Hotel & Tower Las Vegas during its official opening in Las Vegas, Nevada, April 11, 2008. REUTERS/Las Vegas Sun/Steve Marcus

Financialization is the capitalist disruption of our era, and it is the root of Trump’s economic message. Just as his position on immigration recalls an idealized, earlier (and whiter) America, so too does his attack on Wall Street and global corporations reflect a deeply conservative longing for a bygone epoch in American capitalism. An era when the United States dominated global manufacturing as Europe and Asia dug out from the rubble of war. An era when Big Business didn’t mean investment banks and hedge funds. When it meant domestic production — of steel to make buildings with and airplanes to fly. When business looked… more like him.
Trump is a billionaire with an international brand — very much a beneficiary of the globalized, deregulated economy. His economic identity may make him an unlikely champion of a pre-financialized mode of capitalism. But since luxury hotel construction can’t be easily outsourced — and Trump can invoke the classic manufacturer’s claim of “making,” not “taking” — he has nothing to lose by calling out the hedge fund managers.
Trump’s anti-elitism is neither crass pandering nor a betrayal of his class. Instead, his politics are of a piece with a long history of in-fighting among business elites as well as a nostalgic campaign to revive an older economy, to “make America great again.”