The decline and fall of neoliberalism in the Democratic Party

Cross posted from Real Economics.

If you are snow-bound in USA today, and want something to read, I highly recommend Ryan Cooper's excellent short summary of USA political and economic history since the New Deal, posted last week, The decline and fall of neoliberalism in the Democratic Party
It is the first of a four-part series examining the four major factions in the Democratic Party and American left today. In this first installment, Cooper captures the essence of the New Deal:

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Nations took various roads out of the Great Depression. Every one involved ditching liberal orthodoxy — deficit spending and the abandonment of the gold standard being the key two policies in most instances, which had to overcome resistance from business. In Germany, fascism removed "capitalist objections to full employment," wrote economist Michal Kalecki, by routing all deficit spending into rearmament and by keeping labor quiescent with political repression and permanent dictatorship. 

In the United States, the replacement ideology was the New Deal. After some initial failed experimentation with planning, New Dealers settled on a framework of stimulus, regulation, unionization, progressive taxation, and anti-trust, heavily influenced by Louis Brandeis (to be covered in the next article in this series). To get people back to work and prime the economic pump, vast new public works were built, and millions were directly employed by the state. Business — especially finance — was regulated, above all to prevent concentration. Unions were protected under a new legal regime created by the National Labor Relations Act. Taxes on the rich were sharply increased, both to raise revenue and to deliberately prevent the accumulation of vast fortunes. Finally, world trade was managed under the Bretton-Woods system.

These two paragraphs are an excellent summary of what the New Deal was -- and what was dismantled in a joint project of conservatives, libertarians, and neoliberals. This dismantling is why neoliberals are as much to blame for the rise of neofascism around the world. While conservatives, libertarians and the Republican Party, the past half century, constantly stoked bigotry by "feeding meat to their base," neoliberals joined them in destroying the "welfare state" policies that were enacted after World War Two to ensure that never again would fascism be incubated in a cauldron of economic misery and inequality. 

Cooper includes all the most important points of this history, with the exception of the race to the bottom initiated by NAFTA and free trade. Also, Cooper does not fully grasp that the prosperity of the tech boom under Clinton was mostly the result of the phase shift in the national economy resulting from the 1950s through 1980s build-out of the new technology of computers, which -- like all phase shifts in the economy -- began with government support and promotion of new technologies (in this case, computers are developed in military research programs during World War for ballistics calculations, fire control, aircraft simulation, radar, code breaking, and physics calculation for the Manhattan Project, as covered in my chronology HAWB 1940s-1950s Timeline of computer development shows crucial role of government.) 


Cooper's article is the first of a four-part series examining the four major factions in the Democratic Party and American left today. This first part considers the neoliberals, which of course is the faction which currently dominates the Democratic Party leadership, though it is in a dwindling minority. It dominates because it has money, but not votes. 

The second part is The Return of the Trust Busters, the faction around Elizabeth Warren, which Cooper brilliantly traces back to Louis Brandeis. 
The third article is Bernie Sanders and the Rise of American Social Democracy.

The fourth and final installment is The Dawn of American Socialism, which focused on the faction led by the Democratic Socialists of America.

There is no consideration of the historically crucial role of the American School of political economy, which helps explain why Cooper does not include the disastrous "race to the bottom" initiated by NAFTA and free trade.

I also highly recommend Cooper's How to Crush Trump from December 27, 2017, especially this paragraph:

Then in 2020, Trump must be crushed at the ballot box. His corrupt administration must be thoroughly investigated, and any criminal acts punished. More importantly, the economic base of Republican plutocracy — Wall Street, monopolist corporations, and idle rich heirs and heiresses — must also be crushed. Monopolies must be broken up, taxes on the rich and corporations dramatically increased, and the size, profitability, and power of Wall Street sharply reduced with cricket bat regulations.

None of Obama's "don't look back, only forward," pursuit of bipartisan unicorns. Criminal activity must be ruthlessly targeted and vigorously prosecuted, ESPECIALLY by our political enemies.

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Comments

earthling1's picture

by some capitalist hit squad for reading this material will I?
Sounds like just what the doctor ordered. Whoops, did I just say that?
I mean, hummm, how interesting.
I love America, rah rah. MAGA MAGA MAGA.
I'm gonna have me some apple pie now.
Hi mom.
S/

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and especially, thank you for your last remark,

Criminal activity must be ruthlessly targeted and vigorously prosecuted, ESPECIALLY by our political enemies.

I hope to be able to read Cooper's article. And I am happy to see your last remark on the same morning I saw Big Al's statement,

https://caucus99percent.com/content/democrats-disease-malpractice-and-wh...

And those supporting false narratives inciting our sheeple toward war, should have a nice extended Caribbean vacation at Playa del Guantanamo.

I responded that members of Congress who voted for such wars should be thrown out of airplanes over Yemen. All of this, I think, shows an inevitable focus on consequences.

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Wink's picture

rid of the GOP's
@Linda Wood
Dep't of Homeland Security
(DHS) and all subsequent b.s. laws.
That would go a Long way toward restoring America to its pre-9/11 days.
But then, that would mean accomplishing something meaningful politically, and the chances of that happening, sadly, are all but zero.

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the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-1.9) All about building progressive media.

Wink's picture

smoking. It would be nice if all we had to do was oust Trump and our troubles over, but this started long before Trump and will continue long after he's gone, the Trumpster just simply the face of what ails us. The Plutocracy ain't going away. Certainly not peacefully nor politically. But, yeah, it would be nice to think we could make changes politically. Ah, thems was the days.

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the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-1.9) All about building progressive media.

The Aspie Corner's picture

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Modern education is little more than toeing the line for the capitalist pigs.

Song of the lark's picture

You do realize we have just gone full neo liberal shock doctrine with the current regime. Heh more oil drilling. This ends badly.

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