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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.


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!

No votes yet


CMike's picture
Submitted by CMike on

The bail-out was a defining vote and Sen. Clinton sided with the wrong crowd. She can jockey for a leadership position in the Senate or she can become the leader of the working class left but she can not do both. (And Sen. Sanders should have insisted on a roll call for his tax surcharge amendment -- I'm running out of patience with all of them.)

Expect the self-identified as a working class voter demographic to become a fast growing one in the next few years. There's no downside risk here for any elected politician who wants to get out in front on this.

Submitted by lambert on

I can think of one downside risk, actually: The risk of going up in small planes.

As I said in the post, with Clinton, I've got some hope still, for reasons stated. With the leadership, none at all. And Feingold's stock is going up.

[ ] Very tepidly voting for Obama [ ] ?????. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.

BDBlue's picture
Submitted by BDBlue on

That's what this has become for me. Because there just aren't enough Bernie Sanders and the few that exist tend to be sidelined, which is not a coincidence. Although after this week, if I could write Bernie's name in on my November ballot for President, I would.

So I'm stuck not with the politicians I want, but with trying to figure out who among a bad lot will do something to make it better. The list is a shrinking one. Hillary is still on it, but that's only because the pickings are so slim at this point. She's still speaking about HOLC (or HOME) and I grant you that's not much, it's not enough, but it's more than most are doing. A depressing statement about the state of American politics in its own right.

My true hope* now is that one of two things happen in the next four years, which I think are going to be very bad years for most Americans with a lot of suffering: 1) Obama is forced to change to try to keep his job, or 2) a progressive outsider runs against him in 2012 and takes the nomination from him in a popular uprising to the horror of the Dem leadership. As unlikely as #2 is, I'm beginning to think it's more likely than #1. Obama has been incredibly disappointing since clinching the nomination and has shown no inclination to lead. I used to think he was just inexperienced and needed more time to grow into a leader (and I worried that this year we didn't have the time), now I wonder if he has it in him at all.

* The Obama campaign has ruined the word hope every bit as much as Dawson's Creek ruined the word soulmate.

Damon's picture
Submitted by Damon on

You've summed up how I felt, quite well. Yes, it was a defining vote and given the street-cred she earned, she very easily had the power to side with those that gave her a vote of confidence during the primaries. My vote for her in January was a vote having saw her as the best candidate, but also a vote with the hope that she could become even better leader, and I hardly think I'm the only one that voted that way.

Unlike Obama, she's not a total lost cause, but she needs to get around to the realization of what her primary run bought her, and where her true policial and social power lies. It bought her a ticket out of the Beltway if she so chose to use it; a ticket that most national-level politicians don't ever really earn and thus can never use.

It's very rare to get a politician of the people up into presidency. It's even rarer to get someone at that level who then allows his or herself to be changed for the better. Those that voted for her are offering her a change, but it is neither open-ended nor is it unconditional.