The end of the neo-liberal era

Once again, the invaluable McClatchy has more of interest than Pravda on the Potomac or Izvestia on the Hudson. Michael MacDonald of Williams College has an interesting Op-Ed on the end of the Neoliberal era. [Caution: Clinton bashing revisionism ahead!]

As we watch market values plummet and politicians debate — at last — the proper relationship between government and finance, an era in American history is ending. It wasn't understood as an era during its time, and it never had a name. Its name, though, was on the tip of our tongues: It was the Neoliberal Era.

"Was"? We can but hope.

And we see the ending -- the goal, the finish, the catharisis -- of neo-liberalism as the financiers torture us with a credit crunch while running a bust out with a trillion of our dollars at stake.

Neoliberalism began with Ronald Reagan and continued for 27 years through George H.W. Bush and Bill Clinton to George W. Bush, and it rested on one fundamental principle: Financial markets, which are knowing, efficient and flexible, should have more power to decide public policy than democratic governments do.

My problem with Obama is and has always been that I see him as not having come to abolish but to fulfill the neo-liberal prophets. And how typical of our wonderful Democrat Party that we -- and by "we" I mean "they" -- would pick the last exponent of a dying era!

Neoliberals disagree with one another on numerous issues. They even differ on the particulars of the role that government should play in making public policy. But they agree on the primacy of financial power over government.

Which is what we are seeing, quite nakedly, today.

Doctrinaire Neoliberals — Margaret Thatcher, Ronald Reagan and George W. Bush — followed conservative economist Milton Friedman in attacking government.

"Government is not the solution to our problem. Government is the problem," Reagan said, and then his government paved the way for Wall Street to grow.

The more conservative Neoliberals built on a contradiction: They required government patronage, but repudiated government. The current Wall Street bailout fits neatly into this tradition.

Yeppers. (Ditto the Iraq War.)

Pragmatic, softer Neoliberals — Clinton and Britain's Tony Blair — envisioned a somewhat different role for government. Still subordinate to financial markets, government was to play a constructive, supportive role. ...

Since Clinton's election in 1992, political debate has largely been confined within the Neoliberal framework, accepting the fundamentals of Reaganism and Clintonism and renegotiating the terms at the margins. Even Clinton's calls for universal health care were neoliberal: They promised to create a more flexible, mobile, and adaptable work force.

Clintonism agreed that markets are creative, dynamic and wealth producing, and he defined government's role as merely corrective — a safety net. The purpose of government was to "grow the economy." Eventually, the benefits of deregulating finance would trickle down to all Americans.

The bipartisan Neoliberal Era in America, from 1981 until last week, was devoted to economic growth, finance capital and the creative use of debt. The gray, dreary, and boring politics of economics was enlivened by a circus of sex scandals and culture wars. ...

Shadow boxing over values enabled the two parties to retain their separate brands despite the similarity in their basic philosophies: Politicians propose, but markets dispose.

For the liberal wing of Neoliberalism, politics consists of techniques, procedures and questions of how. Mocking Bush II as incompetent, Democrats presented themselves as competent managers. They criticized Bush for failing to plan for the war in Iraq, appointing fools to deal with the devastation of Katrina and mismanaging the economy. They promise that they'd do better on all scores.

What Democrats didn't say, however, is more eloquent than what they did say. They indicted conservatives for pursuing their ends incompetently, [The Incomptence Dodge*] but it follows that they didn't consider the ends to be the problem.

Obama's talking point that Iraq is the wrong war and that Afghanistan is the right war encapsulates this point perfectly,

Democrats abetted the war in Iraq; the deregulation of finance, bankruptcy "reform" [talkin bout you Joe Biden] and the concentration of financial power. Confining politics to matters acceptable to Wall Street [that would be The Overton Window], the Neoliberal Era diverted attention from the central questions of political power — who has it and what is it used for?

But I'm not worried about that now. I'm gonna get my Unity Pony!!!!!!

If we'd understood the Neoliberal Era, what our parties and leaders shared, citizens might have responded differently, asked different questions and expected better answers. We would have realized the silliness of complaining about political polarization in Washington when, in matters of fundamental import, the choice was between the Democratic former CEO of Goldman Sachs and the Republican former CEO of Goldman Sachs: Robert Rubin or Hank Paulson.

Yeppers.

Now, I wish to revise and extend MacDonald's remarks on the Clintons.

Regarding Bill Clinton: If I were still a Democrat or became a Democrat again -- and that's assuming that there continues to be a Democratic Party, as Obama continues to destroy the brand -- I'd be a Clinton Democrat, simply because my life was better under the Clintons; reducing the extremes of wealth and poverty, and increasing wages, as Clinton did, is no mean achievement even given the Neo-Liberal consensus. Nor is it clear that Clinton had the political power to change that frame, especially under the ferocious and unprincipled attacks by the Republicans at the time, which the Obama campaign leveraged so effectively in the primaries. Nor is it clear that the times were ripe for change, especially since "the economy" (whose economy?) didn't really start to tank until after Bush II's seizure and consolidation of power.

Regarding Hillary Clinton: As a centrist, and a loyal Democrat (if that's not a contradiction in terms in these days of blurring boundaries and post-partisanship) Hillary just wasn't the person, or the candidate, to abolish the Neo-Liberal consensus or even to change it though, like Bill, she would try to sand off the rough edges. However, during the primary, she was to a great extent forced to confront what "the economy" (whose economy?) really was doing to people -- and to connect with them, as I believe she did; otherwise, she surely would not have won the popular vote, while the press, screaming WWTSBQ, had been declaring her candidacy dead since February. I believe that's what the under-the-radar town hall strategy of boring bullet points about policy achieved.

So, Hillary's achievement, for real progressives, should be, er, "money in the bank." Whether Hillary can leverage that achievement to abolish the Neo-Liberal consensus , and enact legislation that puts the people back in charge of the government, and lets the government keep the market sane is an open question. However, after Obama decided to "refocus our attention on Afghanistan", whipped votes for that trillion Hank Paulson's golfing buddies need so badly, voted for FISA [cough] reform, and shamelesslyl and shamefully backtracked on universal health care, I just can't see Obama as anything other than the last, best hope for the ancien regime.

For people who want to remain Democrats, I believe that Hillary was and is the best option.**

NOTE * A term I would swear Shystee invented, but can't find the link.

NOTE ** Though Feingold is moving up on the charts!