John Buell

Neoliberalism on the Rocks?

This was an election that inflicted more than a loss. It was a challenge to an entire political strategy and ways of being in the world that Democrats have embraced over the last two decades.

Once the party strongly supported and constituted by private and public sector unions, the poor, and the elderly, Democrats have seen that base eroded by multiple attacks on unions, campaigns for fiscal austerity, and racially divisive rhetoric in the post Reagan era. Though Democrats did not initiate these attacks, their response only aggravated their dilemma. As private sector unionism declined, Democrats support was more in words than in deeds. They took union votes for granted. In the face of continuing corporate offensives, Democrats promised measures to put management and workers on a more even playing field in unionization efforts, but once elected such measures were never administration priorities.

What was pushed were new trade agreements and financial deregulations. The former was promoted with the promise that in the global economy American corporations could outsource the dangerous, rote jobs to developing nations and American workers could increasingly become symbolic analysts, masters of the new digital economy. That promise never materialized. Though job losses to such agreements as NAFTA were not as severe as some expected, workers losing manufacturing jobs often found themselves in the service sector, working for far lower wages and benefits. And the threat of outsourcing was a major contributor to the shrinkage of working wages.

Financial deregulation was another mixed bag for Democrats. If unions could no longer provide the funds and the organizational steam, finance could step in and fill the bill. In a post Reagan economy, with income gaps growing and middle and working class consumer power diminishing, growth slowed. Both Wall Street and Main Street came increasingly to view corporations as financial assets rather than as producers of things. Mergers and acquisitions became popular corporate strategies. Debt itself became one way to address inequality while also creating a instrument to be manipulated, bought, and sold. Wall Street was wiling to share some of its bounty with liberal Democrats and the latter were happy to have support that replaced unions. In addition, finance is a sector without the sort of labor/management animus that had historically characterized manufacturing.

Democrats were fortunate that the housing bubble burst on George W Bush’s watch. Nonetheless, handed an opportunity to enact major reforms, the Obama Administration played nice with the community that had funded them and had been one of the economy’s major malefactor. Whereas hundreds of Savings and Loan executives had been imprisoned in the eighties, none of the current crop faced a day of jail time. Even in the case of the one industry the Administration did bail out, two of the big three auto companies, the terms of the bailout symbolized the contempt for manufacturing workers. The UAW was forced to accept a two-tier wage system with new entry level workers starting at much lower wages than their seniors had enjoyed.

Democrats have increasingly become a party of minorities. Though African Americans, Latinos, Asian Americans, Gay, Lesbian, and Transgender citizens all had legitimate grievances, Democrats’ condescension toward and desertion of the white working class helped fuel a politics of backlash.

The electoral theory Democrats ran on could be summarized in a few words. Demography is destiny, we saved you from the second Great Depression, and recovery is well underway. If all the minorities broke solidly Democratic and northern whites, who had no other place to go, stayed with the Democrats HRC should have achieved a solid victory.

Several factors obviated this hopeful scenario. The recovery from 2008 has been tepid at best. Exit polls indicated that a majority of voters considered the economy to be the most important issue. Most of the benefits of this recovery, unlike the case of previous business cycles, have gone to the top ten percent of the population. Nor do minorities vote as a completely predictable block. As a percentage of total votes cast, African Americans (by 7%) and Latinos (by 8%) voted more Republican than in 2012. They too had been left behind by recovery. Though this is owed in some measuret to Republican obstruction, Obama failed to act decisively when he had a chance and also declined to take steps he could have taken, such as pushed more mortgage relief. Worse still, throughout his terms in office he has continued to push corporate trade agreements that are justifiably the bane of the working class. HRC, who had supported and helped negotiate these deals, ran under their shadow. Her commitment to these deals — and her dishonesty — was revealed in the infamous e mails released by Wikileaks.

That the election was rigged — against the Democrats — is also true. Voter suppression in the key battleground states was rampant. HRC, however, said little about this injustice. Given the DNC’s manipulation of the primaries and her past support of undemocratic trade treaties, she would hardly be the poster child for efforts to enhance democracy.

There was a considerable amount of hubris in the Democrat’s campaign. HRC might have mitigated some of these disadvantages had she articulated an alternative political economic agenda. She chose instead to run by spreading fears about her rival, who was doing enough on his own. She compounded these faults and undermined any class solidarity by assuring the electorate that it was okay to vote for down ballot Republicans.

Though some have suggested that the white working class is predominantly racist, this accusation is its own crude stereotype. The Civil Rights Act of ’65 did, as LBJ predicted, cost Democrats the South. But Northern working class whites have been mostly a pro- Democratic majority. The New York Times reports that Clinton suffered some of her biggest losses in districts where Obama was strong in 2012.

Pollsters only added to HRC’s problems. The continuing emphasis on the horserace aspects deterred media and the campaigns themselves from consideration of the pain and anxiety of large sectors of the electorate.

No one can deny that racism played a disturbing role in this campaign. And racism and xenophobia is more evident in many advanced democracies. Trumpism, as Brown University economist Mark Blyth argues, is an international phenomenon. He adds that the supporters of Trumpism both here and abroad are a diverse group, many of whom are anxious and insecure as a result of HRC’s neoliberal agenda. Glenn Greenwald adds “People often talk about “racism/sexism/xenophobia” vs. “economic suffering” as if they are totally distinct dichotomies. Of course, there are substantial elements of both in Trump’s voting base, but the two categories are inextricably linked: The more economic suffering people endure, the angrier and more bitter they get, the easier it is to direct their anger to scapegoats. Economic suffering often fuels ugly bigotry.” As Blyth recently concluded, without a more concerted effort to address both inequality and racism, neonationalism is likely to replace neoliberalism.

John Buell lives in Southwest Harbor, Maine and writes on labor and environmental issues. His books include Politics, Religion, and Culture in an Anxious Age (Palgrave MacMillan, 2011). Email

From The Progressive Populist, December 15, 2016

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