Is conservative America great?

Following significant victory, Donald Trump is the 47th President of the United States. What policies his administration implements will represent and shape contemporary American conservative politics.

The past hundred years have proven twice that free-rein economy, the kind of economy Trump proposes, is not sustainable.

Republican machinations

In January 1999, a newly established Red Congress (both House and Senate controlled by Republicans) met for the first time. As soon as in November, this Congress repealed the Glass-Steagall Act, the act preventing speculative investment banking.

The new legislation lifted regulatory control over investment banking. It was proposed by Republican Senator Phil Gramm, and Republican House Representatives Jim Leach and Thomas J. Bliley (Jr).

It only took eight years for the banking sector to collapse. In 2007, as a direct consequence of unregulated high risk banking practices, the US housing market slumped, dragging with it the rest of the US and global economy. Thus, the 2007 Financial Crisis began.

Similarly, conservative economic policies led to the 1929 crash of the US stock market, resulting in the Great Depression. In fact, the control over investment banking – repealed by the 1999 Red Congress – was introduced to drag the economy out of the Depression in the first place.

'It's the economy, stupid!'

After both recessions, Democrat legislative packages prevented the US and global economy from fully defaulting. The packages resembled each other closely.

In 1933, the Democrat New Deal initiative was implemented. The New Deal increased the regulatory and redistributive role of the state to level out the socio-economic playing field. It also featured the aforementioned Glass-Seagall Act and the Emergency Banking Act of 1933, the latter ensuring state power to bail-out banks.

In October 2008, within hours after its enactment by Congress, outgoing President George W Bush signed the Emergency Economic Stabilization Act of 2008, the legislation package enabling the bail-out of banks. A mere four months later, newly sworn-in President Barack Obama signed the American Recovery and Reinvestment Act, which included measures to alleviate the crisis' effects on the job market.

The two packs of legislation – the first one signed by George W Bush a month before the presidential election to be won by Obama, the second one signed by Obama right after his inauguration – successfully ended the financial crisis in the US.

What makes America great?

Both Republicans and Democrats regard freedom of citizens as one of the foundations of American society, both citing the US Constitution and the Declaration of Independence as sources that justify their respective doctrines. What is, then, the difference between the two parties?

On the one hand, Democrats argue that the only way people can properly exercise their freedom is if economic and social differences between them are flattened out by state intervention. As opposed to that, Republicans consider such minimizing of differences to hinder citizens in making use of their freedom, and promote an uninterrupted, deregulated economy enabling financial institutions to roam free.

In other words, both Democrats and Republicans regard themselves as protectors of American freedom – the difference between them is the tool they apply.

20th century US history has proven that a conservative, weak state enabling a looters' economy inevitably leads to national and global crises. The century has also proven that these crises are only manageable by regulations of a strong state Democrats favor.

This means that American liberty, as defined in the Declaration of Independence and the Constitution, is best secured by a strong state that only Democrat policies tolerate. America is greatest when liberty pertains to its citizens, not to big money.

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What awaits

The weak state Trump proposes, no doubt to be cemented by a new Red Congress, carries the danger of rendering America less great than promised. In fact, it carries the danger of defaulting the American economy.

Trump's promises contain some assurances. Some of its proposed measures require moderation by the state – some downright resemble New Deal policies. Such is the pledge to securing low energy costs for households, affordable housing, accessible education, affordable healthcare and generally affordable living costs.

One should hope that the Trump administration will be successful in balancing the outcomes of the weak state with socially conscious policies. An economy can happily run on its own – until it doesn't. Once flatlined, resuscitating it is painful for all.

Mind you, flatlining looms. The final stab in the heart of the US economy before the Great Depression was the Smoot-Hawley Tariff Act, legislation imposing an import tariff on a wide range of goods. In 1995, nearly two-third of historians and economists agreed that the Act worsened the depression. The US senate currently refers to the Smooth-Hawley Tariff as one of “the most catastrophic acts in congressional history".

Now, Donald Trump promises similar actions and different results. Free looting of banks can bring an economy to its knees within eight years; tariffs did the job in two. The clock's just started ticking.