Car dealers will decide America’s future – UnHerd

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Ohio Republicans have a new candidate for US Senator: Bernie Moreno, who was endorsed by Donald Trump over establishment-backed Matt Dolan. With Moreno’s victory in last week’s hotly contested primary, the party’s MAGA faction has further entrenched its hold on this pivotal Midwestern state, with its large share of factory towns and labour voters. And should Moreno prevail over the Democratic incumbent Sherrod Brown in November, he would go on to join Ohio’s sitting Junior Senator J.D. Vance, probably the most intellectually sophisticated champion of America First nationalism in Congress.

Such a pairing would make for a politically fertile synthesis: while Vance built his electoral brand on his working-class roots, Moreno has advertised himself with a more traditional set of Republican credentials — namely those of a small businessman or, to be more precise, a car dealership owner.

Between these two poles, the outline of a post-realignment GOP may be sketched. Where the Reagan coalition of the Eighties united Wall Street with Main Street business (with some working class defectors), the emergent Trump coalition of the 2020s and beyond will be different. Because of the exodus of the corporate and college-educated segments of America to the Democrats, it will most likely be composed of a more solid pool of working-class voters allied with the petit-bourgeois class of the red-state and hinterland regions, sometimes known as the “American gentry” and stereotypically represented as rock-ribbed conservative car dealers, like Moreno. Yet while much ink has been spilled trying to understand the mindset of the MAGA working class (Vance’s 2016 bestseller Hillbilly Elegy was about precisely the kind of people who would go on to vote for Trump), comparatively little attention has been paid to the Bernie Morenos of America.

A 2023 account of these car dealers by Slate’s Alexander Sammon recounts the awesome scale of their collective wealth and influence on Republican politics: “Auto dealers are one of the five most common professions among the top 0.1%” while making up “a majority of the country’s 140,000 Americans who earn more than $1.58 million per year”; members of the industry association donate to Republicans “at a rate of 6-to-1”, through which they have worked “to write and rewrite laws to protect dealers and sponsor sympathetic politicians in all 50 states”. Such figures help to make sense of Moreno’s and his fellow car dealers’ status as the cream of the crop among America’s local elites.

Coverage of the gentry more generally diverges along partisan lines: Right-wing commentators usually praise their innate cultural conservatism and strong attachment to place, while Left-wing and libertarian critics decry what they see as the reactionary and racket-like nature of their enterprise, built as it is on intensive lobbying efforts to ensure their entrenched positions as middlemen standing between manufacturers and consumers. Given their political weight, it is surprising to see the dearth of analysis on the future trajectory of this class (other than prophecies that anticipate their extinction) in the context of debates about the fate of the US auto industry, not to mention the role this gentry should play as the Republican coalition lurches away from the Reaganite consensus.

Indeed, a case can be made that the central question for the future of conservatism revolves around this class. It is not whether they will embrace a populist-nationalist political outlook — this much should already be clear to any observer of American politics in the last eight years — but whether they will become populist-nationalist in their economic preferences as well? For beneath their reputation as regressive opponents of change, it should be remembered that it was this unheralded elite of small-town millionaires who came out early and overwhelmingly for Trump in 2016, rejecting free-market orthodoxy and legitimising previously heretical stances on trade and the need to re-industrialise. It was to their ears as local elites spread out across the country that Trump’s incessant calls for rebuilding America’s “bridges, tunnels, freeways, and airports … our great plants and factories” were most resonant.

In other words, by anointing a brash New York City businessman as their tribune, it was the gentry that arguably did the most to light the spark of the populist-nationalist revolution, though a combination of inertia and diversion prevented a fully-fledged nationalist programme from taking shape when Trump was in office. However, in the years ahead, a more forceful break with laissez-faire policy on their part along with an embrace of state-guided industrial policy would bring them into much closer convergence with the material interests of the working class, and should actually enable Republicans to follow through on the promise that launched Trump’s insurgency: to restore America’s strength and prosperity by bringing industry back to the heartlands. But it remains to be seen how a conservative class of provincial entrepreneurs can be made to support a nationally-directed interventionist agenda.

Turning to history will reveal that it isn’t as much of a long-shot as it seems: after all, it was small business elites — not unlike today’s gentry — who fuelled American industrialisation in the late-18th to 19th centuries under the banners of the Federalist, Whig, and early Republican parties, when the term “nationalist” meant precisely support for the federal government’s role in directing modernising investments toward the country’s developing regions and frontiers. Henry Clay’s “American System” was the most ambitious expression of this philosophy, and later served as the inspiration for Abraham Lincoln’s programme for reshaping of the American economic order during the Civil War. But what would be the equivalent programme for revitalising today’s moribund post-industrial economy?

The answer may have to do with Trump’s unexpected and ingenious proposal, made during a speech at a Moreno rally in Dayton, of letting Chinese firms build car factories in America as the only way around a new 100% tariff wall he’d place for Chinese cars made elsewhere. This would seem to contradict his image as the ultimate China hawk. But as David P. Goldman points out, Trump is a dealmaker first and foremost, and his idea (coverage of which was lost amid furor over Trump’s “bloodbath” comments from the same day) would not only diffuse Sino-American tensions but deliver benefits to US workers, consumers, the auto industry (in the long-term), and yes, the car dealer gentry. The Chinese themselves are in need of new markets, and as Politico reports, for them, “the United States market is the holy grail”.

Trump has claimed, under this proposal, US workers would get to work in the car factories, though the scale of automation involved and the advanced skill set required could mean that most of the existing American workforce may not be qualified enough to man such factories. In any event, manufacturing would still create lots of “spillover” jobs in the communities that receive the factories. Just as American consumers would, of course, benefit from access to the latest Chinese EV models — such as the BYD Seagull.

The auto industry, meanwhile, despite having to deal with fierce new Chinese competition initially, would nonetheless be able to, as Goldman put it “appropriate their IP the way they appropriated ours”. This may sound like a flippant statement, but historically this is how catch-up industrialisation worked, through subtle processes of IP transfer from the more advanced to the less advanced economies, in which case a new cycle would just be repeating itself — this time, to America’s advantage. Or as Goldman wrote: “It’s easier to let [China] bring industrial automation to the United States than to try to catch up after the fact. That’s the path of least resistance, and one that Trump has opened up.” (Though as a means of cushioning the effect of China’s market entry, its factories could be brought in at a controlled pace and assigned to limited geographic areas so as not to overwhelm domestic competition totally.)

“The American gentry started the Trumpian populist-nationalist revolution: they may yet be the ones to finish it.”

But the greatest beneficiaries may be the car dealers, who, in this scheme, would be the ones to sell Chinese cars to consumers. In theory, car dealers should be able to sell EVs such as the Seagull the same way they sell gasoline-powered cars, but in practice, it hasn’t worked out that way because of a number of factors, namely the more expensive costs of servicing EVs and lack of available technical expertise. This is why Moreno and the gentry have been consistently hostile to EVs; and it also doesn’t help that Tesla has sought to market its models directly to buyers through online sales.

But there is another instructive example from the annals of American economic history, namely the state-sponsored mechanisation of agriculture in the New Deal South, where an ultra-conservative local oligarchy profited from state subsidies that allowed them to pay for modern farm equipment, thereby reducing the cost of innovation and helping the semi-feudal South of the Thirties to develop and industrialise. A similar effort to subsidise costs for any EV transition, in which the US government transfers funds and capital assets directly to the dealers, would both accelerate the adoption of new technologies and preserve the civic leadership of the gentry. Such a programme would smooth the economic transition for themif not the cultural one, which may prove more difficult, given their engrained suspicion of EVs. In any event, electric would still be far off from becoming the mainstream of the US auto industry and will likely co-exist with traditional models for some time: but this endangered class would nonetheless be given a chance to not just survive but thrive amid an otherwise disruptive paradigm shift.

Furthermore, the accompanying new infrastructure of such a programme would be incredibly costly, to say the least, and neither the Chinese nor the US government should be expected to foot the entire bill. This is where the state can step in to channel private capital into the underdeveloped regions where the gentry live by setting up such things as infrastructure banks, guidance funds, and shared manufacturing facilities as the pillars of a modern-day equivalent to Henry Clay’s “American System”. Best of all, through such a programme, Washington — under Trump or any future Republican president — could pressure the financial sector to disgorge its hordes of stagnant capital into these new developmental institutions and stimulate re-investment into the heartland. This would, in effect, create a massive wealth transfer from Wall Street to Main Street, reversing the logic of the Reaganite coalition in which Wall Street called all the shots.

Of course, many things would have to go right for this scenario to take place. The Republicans could fumble their chance at leadership and go back to more Paul Ryan-style tax cuts, which would do nothing but enrich increasingly Democratic-aligned corporate America; or they could actually base their policies on the interests of their primary elite constituency, the gentry, along with the working class. Realising this possibility would require a future Senator Moreno to imbibe the heterodox ideology of his colleague J.D. Vance, as he employs his entrepreneurial skills to convince his fellow Republicans to entertain a programme radically different from the free market dogmas of the past. After all, it was the American gentry that started the Trumpian populist-nationalist revolution: they may yet be the ones to finish it.


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