Alexis de Tocqueville once observed that Americans were keenly focused on securing their material “well-being,” acutely perceiving the strong connection drawn between political ideology and economic policy as a typical feature of American political culture. Such concerns were present at the very birth of the republic, generating two disparate alternatives to the pursuit of prosperity: Thomas Jefferson favored an agrarian republic built on the foundations of the self-reliant farmer, and Alexander Hamilton envisioned the creation of an economic colossus driven by commerce and industry. In early presidential politics, the Federalists generally favored Hamilton’s policies, whereas the Jeffersonian Republicans generally held the attitudes of their namesake. The Hamiltonians attached their hopes for prosperity on close commercial ties to Britain; whereas the Jeffersonians, influenced by both the French Revolution and the philosophy of the Physiocrats, magnified by a lingering antipathy to Britain, sought closer political and commercial ties to France.
During the Age of Jackson, the Democratic Party was by and large the heir to the Jeffersonian vision, adding the inclination to promote laissez-faire economic attitudes and favoring small business as an important element of an agrarian republic. The Whigs drew upon the doctrine of Hamilton, advocating a close alliance between government and business intended to develop the infrastructure necessary to stimulate manufacturing and trade.
From the late eighteenth century until the Civil War, the tariff issue was an ongoing and divisive debate within presidential politics. By the 1820s, southern states came to regard protective tariffs as a plot by New England and Middle Atlantic states to permanently hobble their economies. High tariffs on British manufactured goods meant reciprocal high tariffs imposed on outgoing southern cash crops. Northeastern manufacturers supported tariffs to protect them from cheaper English and European manufactured goods. Prior to the Civil War, Whigs generally supported high tariffs while Democrats opposed them.
The promise of prosperity became a reliable fixture in the election campaign cycle. However, the issue of which economic course was best for the country, while ever important, became secondary to the more critical moral problems and social concerns confronting the nation over the problem of slavery. But even the debate over slavery, which was principally a moral issue, was on some occasions tied to pecuniary attitudes. In addition to the moral questions, some proponents of slavery claimed its superiority as an economic system, while some opponents of slavery pointed to the economic weaknesses of such an antiquated form of labor. Ultimately the Union victory in the Civil War not only resulted in the abolition of slavery, but it also sealed the economic fate of the republic along Hamiltonian lines: industrial, commercial, urban, and international.
Prosperity issues in the post-Reconstruction period were again polarized, the Republican Party inclining toward high finance and manufacturing, and the Democrats, especially in the South and West, adhering to agrarian and mining interests. The tariff issue was overshadowed by demands for railroad rate regulation and currency reform. The Industrial Revolution made the national economy less dependent upon farm production, but growing farm production and high rail shipping rates made it nearly impossible for farmers to make a profit. Growing discontent among farmers led to the birth of a number of third parties advocating railroad regulation.
Additionally, new labor movements focused on the economic plight of working families, the Industrial Revolution having left millions of Americans at the mercy of powerful corporate trusts. The Greenback Party, Union Labor Party, and Populist Party pressured the other major parties to address farm and labor problems. A peculiar but intensely important debate over the nature of the best monetary system spun out of these differences in the 1890s, Republicans and conservative Democrats hitching prosperity’s star to the gold standard, while Democrats advocated the policy of “bimetallism,” allowing for the free coinage of silver to augment the circulation of gold. The Republican nominee in 1896, William McKinley, promised voters a “Full Dinner Pail” if they rejected Bryan’s “free silver” solution. McKinley and the gold standard prevailed. A mammoth gold strike in Alaska in the late 1890s, accompanied by rising affluence, permanently put the coinage issue to rest.
By 1904, a progressive tide had inundated the country, thereby influencing elements in both major political parties as well as encouraging the appearance of additional minor parties. President Theodore Roosevelt undertook a crusade to break the power of trusts and monopolies once and for all. In spite of an unfortunate split between Roosevelt and his friend and successor, President William Howard Taft, the Taft administration built upon Roosevelt’s progressive legacy, although in the latter half of his one-term presidency, Taft reduced the aggressive anti-trust efforts that had previously distinguished his contribution. Following Taft, Democrat Woodrow Wilson pledged to continue progressive policies in his successful 1912 campaign. But in the wake of World War I, disappointed American voters turned their backs on the progressive movement by electing a sequence of pro-business presidents: Warren G. Harding, Calvin Coolidge, and Herbert Hoover.
As the Roaring Twenties yielded to the global Great Depression (which was actually under way in some rural regions in the country prior to the catastrophic stock market crash of October 1929 and the subsequent depression), the best path to prosperity was acutely debated throughout the 1930s, polarized by the New Deal programs of Franklin Roosevelt and framed between the Democratic promotion of state intervention to support and strengthen the economy and Republican faith in the untampered practices of private enterprise protected, but not guided, by the institutions of the state. Thus Republicans became the party of “rugged individualism,” insisting that prosperity depended on minimal government activity and individual initiative. These attitudes defined the centers of both parties through the 1960s during the debate over Lyndon Johnson’s Great Society and the “war on poverty,” and into the early 1970s with the nomination of progressive Democrat George McGovern in 1972.
The severe economic dislocations of the 1970s paved the way for Republican nominee Ronald Reagan’s 1980 victory over incumbent president Jimmy Carter. Reagan’s presidential debate question that became a de facto campaign slogan, “Are you better off than you were four years ago?” has come to symbolize the Campaign of 1980 while stimulating a shift in public attitudes regarding government entitlements as guarantors of prosperity. Activist approaches such as the New Deal, Truman’s Fair Deal, and the Great Society were widely regarded as having fallen short, and even the Democratic Party moved closer to a less interventionist position, typified by the “third way” economic policies of the Clinton administration in the 1990s.
Bill Clinton purposefully and skillfully emphasized prosperity. His use of the slogan “It’s the Economy, Stupid” typifies the successful policy strategy that drove the incumbent president George H. W. Bush from office. Four years later, the booming national economy made it exceptionally difficult for Senator Bob Dole, the Republican nominee, to dislodge Clinton on the character issue. Clinton won reelection. Interestingly, Vice President Albert Gore proved unsuccessful in taking credit for eight years of strong economic growth during the Campaign of 2000.
While the major parties contain many elements and various opinions regarding the best policies promoting affluence, it is still accurate to say that Democrats are more inclined to “prime the economic pump,” Clinton’s third way notwithstanding; whereas Republicans remain more firmly devoted to the laissez-faire capitalist vision of Hoover and Reagan.
Shortly after taking office in 2001, President George W. Bush offered Americans a tax rebate, and in 2003, he pushed through Congress one of the largest tax cuts in American history. At the same time, the Bush administration devoted trillions of federal dollars to fighting wars in Afghanistan and Iraq in the aftermath of the September 11, 2001, attacks on the United States. Like Reagan before him, Bush left office with a record federal debt.
The collapse of the housing market bubble in the mid-2000s, combined with a series of shocks to the financial sector from risky investments in mortgage-backed securities (a practice permitted by the gradual easing of regulations on banks and investment firms), led to a catastrophic crisis late in the Campaign of 2008. Faced with the impending failure of several large investment firms, President Bush urged Congress to pass his proposed rescue package for the financial sector, known as the Troubled Asset Relief Program (TARP). While Democratic nominee Barack Obama and Republican nominee John McCain both cast votes in favor of TARP in the Senate, House Republicans were initially not convinced that the federal government should be bailing out the private sector. Other businesses around the country were failing, and large numbers of Americans were losing their homes to foreclosure; none of these entities was being offered federal assistance. Bush eventually persuaded a contingent of Republicans that the failure of the big investment firms would have serious repercussions for the rest of the economy, and with mostly Democratic support, TARP was signed into law. Because both major-party candidates had supported the legislation, it was not a topic of controversy in the presidential campaign (although it was controversial). A strong public backlash, particularly among conservative voters, ensured that opposition to TARP would become a hallmark of the Republican campaign in 2012.
In the end, McCain was unable to escape the unpopularity of his predecessor and the public’s perception that he was inexperienced in matters of the economy. While Obama promised to get the economy rolling again, it is likely that he received a large portion of his support simply because he presented an alternative to the status quo. Shortly after being elected, Obama got Congress to pass a stimulus bill that pumped federal funds into state and local economies as a means of promoting job growth (or preventing job loss). This, too, proved controversial, as Republicans were overwhelmingly critical of the bill. Several Republican governors, including Bobby Jindal of Louisiana and Rick Perry of Texas, publicly lambasted the bill but accepted the funds anyway.
Two years into the first term of Obama’s presidency, economic growth, while evident, was so gradual that the general perception among the American public was one marked by continued anxiety over economic conditions. The economy was recovering, but for many the recovery was imperceptible, and for those who did recognize improvement, it was too little and too slow. Tea Party opponents and critics in the president’s own party exhibited emotions running the gamut from fear and outrage (in the case of the Tea Party faction) to deep disillusionment (in the case of the president’s more liberal erstwhile allies). Both real and imagined economic problems boosted the Republican Party in the midterm elections and buoyed Republican confidence in the 2012 campaign. There, the economic debate was again marked by distinct attitudes: the president reaffirming the role of activist government and celebrating the more communitarian elements present within American political culture and economic development; his Republican challenger, former Massachusetts governor Mitt Romney, sharply critical of the president’s economic vision and ardently celebratory of American free enterprise and personal self-reliance and initiative—themes that resonate throughout the many election cycles running back to the nineteenth century. For Mitt Romney, the wealth of America has been generated by the hard work, independence, and initiative of free individuals in committing to their own choices in free markets, but America under the administration of President Obama, according to Gov. Romney’s assessment, was squeezing the middle class, crushing most Americans under the weight of wasteful government programs, intrusive regulation, ineffective tax policies, excessively constrained use of resources, and meddlesome policies that stifle the entrepreneurial spirit. While the president certainly recognized the importance of the entrepreneur, he nevertheless challenged Gov. Romney’s understanding of American enterprise with the reminder that America’s infrastructure and public works are the inheritance of active government, pointing out that when it came to roads, bridges, canals, and all manner of public infrastructure, the unfettered financier, industrialist, or entrepreneur “did not build that,” but rather, the government in behalf of the American public—including the entrepreneur and the financier—did build it. Hence the “rugged individual” versus the “activist community” resurfaced again in the Romney-Obama contest.
The 2016 campaign to date draws this contrast even more pointedly in some ways. This is seen in two candidates in particular: Sen. Bernie Sanders of Vermont, running for the Democratic nomination, and Mr. Donald Trump, a celebrity billionaire who has, at least for the moment, seized Republican front-runner status in the early stages of the campaign for 2016. Sen. Sanders, a self-proclaimed democratic socialist, argues that American prosperity is threatened by the increasingly growing gap in income inequality, a gap that has concentrated the nation’s abundant wealth into the hands of the privileged few, while the great majority of Americans are left to struggle and labor in order to meet even their more basic needs. Part of the senator’s campaign is based on the advancement of twelve initiatives that include progressivist elements such as “new economic models to increase job creation and productivity”; imposing “a progressive tax system in this country which is based on ability to pay”; the “establishment of worker-owned cooperatives”; increasing the minimum wage; expanding and strengthening the “social safety net” programs such as Social Security, Medicare, Medicaid, and government-sponsored nutrition programs; addressing comparable worth; the development of authentic universal health care coverage; ensuring universally affordable higher education; and reining in the economic, political, and social influence of large corporations, banks, and other financial institutions as embodied on Wall Street. All of these elements, and others not mentioned here, embody the kind of progressivism that has waxed and waned in American political culture since the latter half of the nineteenth century. Former secretary of state Hillary Clinton, still considered the Democratic front-runner in spite of recent inroads carved by the Sanders campaign, has been perceived as another “Wall Street” corporate candidate from the party’s left wing, but a closer look at her economic agenda reveals some themes held in common with Sen. Sanders, such as increasing the minimum wage and expanding overtime, strengthening progressive taxation that shifts the revenue burden to the wealthiest citizens, developing profit-sharing between owners and workers, and continuing to address health care costs by fortifying the Affordable Health Care Act, among others. Mr. Trump seeks to lower taxes on corporations, reduce government spending, and impose limits on any future increases in the national debt ceiling, all of which are typical of the economic proposals of Republican candidates. Atypically, Mr. Trump recommends raising personal income tax on the wealthy, a position that at one time was embraced by Republican moderates but is now an unusual recommendation among Republican presidential hopefuls. By and large, the current crop of Republican candidates reiterate much of what has been promoted in recent campaigns, such as Gov. Mitt Romney’s 2012 campaign and Sen. John McCain’s 2008 campaign, stressing the need to support free markets so as to “grow the economy,” meaning primarily the reduction of government regulation of business and industry and rewarding individual initiative and innovation. Again, if one were to compare the substance of the ideas behind the rhetoric, the Democratic Party still more closely resembles the principles of the New Deal, however modified by President Bill Clinton’s “third way” during the 1990s, while the Republican Party hews more closely to President Hoover’s ideals of less government intervention and the encouragement of a “rugged individualism.” As one would expect, both major parties continue to stress the need to strengthen the middle class, and more recently, both parties have expressed concern over the problem of income inequality, although that concern is manifest across a graduated spectrum. American prosperity, in nearly every case, remains a fundamental aspiration in both parties, along with the foundational principles of liberty and equality, however differently construed.
See also Bread-and-Butter Issues; Campaign of 1896; Campaign of 1920; Campaign of 1932; Campaign of 1992; Campaign of 1996; Keynesian Economics; Trade Issue
Hibbs, Douglas A., Jr. The American Political Economy: Macroeconomics and Electoral Politics in the United States. Cambridge, MA: Harvard University Press, 1989.
Indiviglio, Daniel. “The Best and Worst of Mitt Romney’s Job Plan.” Atlantic, September 7, 2011.
Landler, Mark. “Obama Challenges Congress on Jobs Plan.” New York Times, September 8, 2011.
Stein, Herbert. Presidential Economics: The Making of Economic Policy from Roosevelt to Reagan and Beyond. New York: Simon & Schuster, 1984.
Tufte, Edward R. Political Control of the Economy. Princeton, NJ: Princeton University Press, 1980.