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In crucial ways, Donald Trump is the second coming of George W. Bush

George W. Bush
Paul J. Richards | AFP | Getty Images
George W. Bush

Tax cuts, big government, and financial regulation — everything old is new again.

Donald Trump is alarming to liberals in many ways, not least of all because he simply does things that defy the "normal" rules of politics. He disregards transparency, his bizarre tweets are often false or offensive, and he dismisses all kinds of unspoken rules governing everything from financial conflicts of interest to dialogue with the political leadership of Taiwan.

This naturally leads to nostalgia for his more conventional predecessors, including the man liberals spent the past decade scorning — George W. Bush.

The sentimentality began back in the summer of 2015, when Republican presidential hopefuls, including Trump, embraced the term "radical Islamic terrorism" — while President Barack Obama refused.

Liberals turned to their old foe to argue that the Republican Party has gone off the rails; they should remember the right way to talk about the Muslim world. As Hillary Clinton put it at the time, "George W. Bush was right" — referring to his careful denunciation of terrorism, but not the religion of Islam as a whole.

There is, of course, something to this. Trump poses many unprecedented risks to the American political system and the US-led global order. But there's also a simple fact that should not be forgotten amid the rise of Trump: George W. Bush was a bad president.

Bush presided over the worst terrorist attack in American history, let the main perpetrator get away, destabilized the Middle East with a pointless invasion of Iraq, oversaw a historically weak jobs recovery, and then stood and watched as the entire global economy tumbled into its worst crisis in generations.

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Under the circumstances, it's little surprise that he left his political party in ruins as he left office. Nor is it surprising that the GOP comeback — which came very quickly — took the form of repudiating the Bush legacy and promising a new, more rigorous form of conservatism.

Nor is it all that surprising that participation in the Bush fiasco fundamentally discredited the GOP establishment and opened the doors to Donald Trump.

What is surprising is that when you add the two disavowals together — first the establishment's repudiation of Bush during the 2010 midterm cycle, then Trump's repudiation of the establishment during the 2016 cycle — what you get is a party that's spun around so far it's ended up back where it started.

The peculiar genius of Trump is that precisely because he had no real ties to either era of GOP politics, he could present the Bush synthesis as a break with the past rather than a recapitulation of it and become, in stealth, the second coming of George W. Bush himself.

Trump's two-step embrace of Bushism

Bush rode into office on the strength of white working-class voters who were drawn to his heartland cultural politics, alienated by Al Gore's aloof demeanor, and appeased by Bush's repudiation of the hard-right orthodoxy of the congressional GOP of the era. Bush scolded congressional Republicans for seeking to "balance the budget on the backs of the poor" and promised to deliver a much-needed prescription drug benefit to America's senior citizens.

"George Bush is a different kind of right-winger," wrote the Economist's US politics column in April 2001, "a card-carrying conservative who nevertheless believes in active government."

Fred Barnes of the Wall Street Journal and the Weekly Standard called him a "big government conservative."

None of this entailed a retreat from the Republican Party's basic commitment to an agenda of tax cuts for high-income households and favorable regulatory treatment of businesses. It was, instead, a political strategy to make plutocracy workable. And while Bush-era deficits probably contributed to some long-term problems, the interest rate environment of the time was certainly conducive to "irresponsible" budgeting.

And, indeed, it's very difficult to imagine Bush securing reelection in 2004 if his trillion-dollar tax cut had been paid for with cutbacks to public services. In reality, however, Bush expanded public services by lavishing new subsidies on American agriculture, introducing new health benefits on American seniors, and increasing federal K-12 education spending in exchange for the accountability reforms of the No Child Left Behind law.

When, eventually, Bush's administration collapsed into ignominy, conservatives quickly pinpointed these big-spending ways as the reason. Even Bush's brother Jeb found himself saying that "in Washington during my brother's time, Republicans spent too much money."

But by the time Jeb was out on the campaign trail distancing himself from his brother's big-spending ways, Trump was kicking his butt precisely by distancing himself from the tight-fisted fiscal policies of Paul Ryan and Mitch McConnell.

Which is just to say that Trump ran and won as none other than the second coming of George W. Bush, a Republican president who promised tax cuts and deregulation without doing much to roll back the welfare state.

But while Bushism is a kind of political sweet spot, openly embracing the policy legacy of a failed president whose policies ensnared the country in a generational economic catastrophe is not.

Trump has embraced Bushism on financial regulation

Of particular note is that the proximate cause of the Bush-era collapse of the American economy was his administration's belief that banks should not really be regulated.

As Binyamin Appelbaum and Ellen Nakashima recounted in a 2008 overview of the extraordinary failures of the Bush-era Office of Thrift Supervision, "In the summer of 2003, leaders of the four federal agencies that oversee the banking industry gathered to highlight the Bush administration's commitment to reducing regulation. They posed for photographers behind a stack of papers wrapped in red tape."

They posed with clippers and, in the case of the OTS Director James Gilleran, a chainsaw.

"What you had here is a regulatory motif that was too accommodating to private-sector interests," Jim Leach, a Republican who chaired the House Banking Committee during the Clinton administration, told Appelbaum and Nakashima.

After the crash, needless to say, the Obama administration put in place a new, tougher regulatory framework. Republicans did not embrace the framework or the general drive for more regulation, but they also couldn't very well say that the Bush-era approach was perfect.

What they hit upon, going back to John McCain's 2008 campaign, was the notion that Fannie Mae and Freddie Mac were to blame. McCain argued that he'd been "warning" about this for years. The American Enterprise Institute's Peter Wallison explained that the trouble all went back to 1992, "when Congress adopted what were called 'affordable housing' goals for Fannie Mae and Freddie Mac, which are huge government-backed firms that buy mortgages from banks and other lenders."

The merits of this theory were always dubious. Barry Ritholtz termed it the "Big Lie" of the financial crisis, but it was certainly a theory of how a forward-looking conservative approach would reject Obama's call for tougher bank regulation while not simply repeating Bush-era policy.

This view also had real policymaking consequences during the Obama era. The housing crash caused Fannie and Freddie to go bust, which led to a bailout and a federal takeover. While some liberals liked the idea of retaining Fannie and Freddie as wards of the state, the White House embraced a bipartisan proposal to liquidate them while creating a new, smaller, federal role in securitizing home loans. But Jeb Hensarling, chair of the House Banking Committee, held to the even more ideologically stringent view that they should simply be eliminated with no replacement.

The Trump administration, by contrast, has strongly signaled that it wants to simply hand Fannie and Freddie back over to private shareholders. This will make an enormous amount of money for a handful of hedge funds that scooped up seemingly worthless shares at bargain prices.

That's largely been covered as a corruption story, since Trump appears to be invested in one of the main funds that owns Fannie Mae stock, but it's also a stance with critical ideological portents. Trump is, like other Republicans, thoroughly committed to dismantling Dodd-Frank. As long as Obama was in office, the GOP line's alternative theory of the financial crisis was that it was all the fault of Bush-era practices at Fannie and Freddie. Now Trump is ready to bring all those practices back.

The definition of insanity

Of course, Trump and Bush are different in several important ways. While Bush's politics heavily emphasized an anti-gay agenda to differentiate authentic heartland folks from deracinated coastal elites, Trump has downplayed these issues and replaced them with anti-immigration stances and racial demagoguery. Bush's brand of pugnacious nationalism emphasized America's high-minded ideals, while Trump is more likely to invade a country to take the oil than to spread democracy.

But the similarities are much more striking and significant than the differences.

That includes not just the specifics of fiscal policy and financial regulation, the focus on fossil fuel extraction as a jobs strategy, and the rhetoric of cultural populism as an antidote to class politics but also a general approach to the policymaking process. Trump emulates Bush in his disrespect for eggheads, experts, and career public services in favor of gut-driven decisions and a team with business experience.

Bush's strategy ultimately failed, and any effort to repeat it will fail for the same reasons. Deficit spending and digging things out of the ground are fine, but they're not strategies for long-term wealth creation. At their best, they are strategies to pay for long-term wealth creation. Using them to pay for tax shifts that increase the wealth of the already wealthy does nothing on that score. And while an unsupervised financial system is a great way to let traders make a quick buck, it too can't possibly generate long-term prosperity.

In politics, timing is everything. Bushonomics collapsed only after Bush had already won reelection and already seen his party shellacked in midterms due to scandals and problems in Iraq. Trump's version could fall apart sooner in his administration. Or, given the relative recency of the last financial crisis, he might be able to keep the music playing for eight years. But anyone who straightforwardly argued in favor of repeating all the main features of Bushism would be laughed at. Trump hasn't done that, of course. But his politics are a backlash to the backlash to Bushism, and have merely gotten the Republican Party back to where it was 16 years ago. And there's every reason to believe the results will be substantially the same.

Commentary by Matthew Yglesias, a writer at Vox. Follow him on Twitter @mattyglesias.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

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