"Compelling indictment of neoliberal economics"
AlterNet: Amid a Painful Economic Meltdown, Will Obama Be Bold Enough to Win?
Amid a Painful Economic Meltdown, Will Obama Be Bold Enough to Win?
By Joshua Holland, AlterNet
Posted on September 13, 2008, Printed on September 13, 2008
http://www.alternet.org/story/98495/
Voters may not follow every twist and turn of the election -- they may
not brush up on each of the candidates' policy proposals -- but they
know when they're hurting economically, and almost unprecedented numbers now say the country is on "the wrong track."
The Bush years have been bad. In fact, as economist Jared Bernstein noted,
when one compares the economic peak of the past cycle, in 2000, with
the high point of the business cycle that just ended in 2007,
households in the middle actually lost ground, earning $300, adjusted
for inflation, less than they did in 2000. The worst this group
had done in previous business cycles occurred during the 1970s, when
median income "only" increased by about $2,000. In comparison, the
income for a family in the middle rose by almost four grand during the
1990s.
It's the first time since they started keeping records of
family income after World War II that the economy has gone into a
recession before the middle class, those iconic "American families"
that dominate our political discourse, had rebounded fully from the
previous downturn. That represents an immensely painful double-dip for
those in the middle and at the bottom -- only those in the top fifth of
the economic ladder have seen any gains whatsoever
since the last recession (officially) ended in 2001. (The wages of the
bottom fifth fell by 6 percent, while those in the top 1 percent saw
their incomes rise by about 50 percent during what some conservative
pundits have called the "Bush Boom").
But
it's important to understand that Bushenomics only represents an
extreme iteration of the ideology that's prevailed since the 1973
energy crisis and the dawn of the "Reagan Revolution." The pain that
working America feels today is the culmination of a far longer trend.
An analysis by economists Thomas Piketty and Emmanuel Saez offers
perhaps the most compelling indictment of neoliberal economics. They
sliced and diced the American economy, going back to the beginning of
the last century, and they found that between 1973 and 2003, despite
several periods of healthy growth, the average real income of all but
the top 10 percent of the economic ladder -- 9 out of 10 American families -- actually fell
by about 4 percent over those 30-plus years. Meanwhile, the incomes of
the top 10 percent of American households increased by around
two-thirds.
It's a unique moment in history, with the country
facing a deep, structural energy crisis, with a tattered reputation and
dwindling influence abroad and a sputtering economy at home. But in
moments of crisis, there is often opportunity. The public now appears
to be uniquely receptive to a bold progressive agenda, more so than at
any other point in recent memory.
The question that will be
answered over the coming weeks is how aggressive the Obama campaign
will be in articulating such an agenda -- whether a campaign that has
moved to a steady but generic drumbeat of "change" can widen the
discussion from the failures of the Bush administration to the
disastrous consequences of the larger conservative project over the
past 30 years and offer the voters some concrete proposals to restore
Americans' tattered sense of economic security.
What Kind of "Change" Are We Talking About?
The
neoliberal project -- the idea that business, when largely unregulated,
has some sort of magical virtue that renders the idea of a healthy
social safety net a quaint but antiquated notion -- has failed, and
done so spectacularly over a long period of time.
Noam Chomsky
has said (and I'm paraphrasing) that for the adherents of
neoliberalism, the answer to each and every one of its failures is more
neoliberalism, and John McCain epitomizes that approach. His economic
prescriptions are as simple as they are familiar: Cut taxes for top
earners, privatize as many chunks of the public sphere as possible, and
let "the market" deal with whatever dislocations result. To keep the
masses from becoming unruly, throw some crumbs their way -- job
retraining, trade "adjustment assistance," maybe a grudging increase in
the minimum wage (actually, McCain has voted 19 times against raising the minimum).
McCain's
problem is that the American people aren't so ideologically rigid. Over
the past year or two, an extensive body of public opinion research has
shown that Americans -- including those crucial white working-class
voters who have been largely loyal to GOP candidates since their
benevolent Saint Reagan told them that government was the problem --
are hungry for real, substantive change in our nation's economic course.
That hunger runs deep. According to the American Dream Survey
-- a study of the non-managerial workers who make up about 80 percent
of the workforce -- released last month, Barack Obama, who's already
polling well among that group, "can capture even greater support
amongst working voters, including 'Reagan Democrats,' as well as the
emerging Obama Republicans with a program of economic populism."
The
study found that an overwhelming majority of working people -- about 8
in 10 -- think it's becoming harder and harder to attain the "American
Dream" -- defined as "jobs with pay that can support a family, access
to quality health care, chances for your children to succeed, and a
secure and dignified retirement." (Respondents were far more
pessimistic this year than they were last year, when I wrote about the annual survey in some detail.)
What's
most striking about the results is the degree to which these
working-class voters -- the subject of so much discussion on the TV gab
shows during this election season -- explicitly reject the Reaganite
economic principles that have held so much sway over both parties over
the past three decades. They say, explicitly, that they want the
government to take an active roll in protecting their interests;
according to the study, "Working Americans believe government can help
(them) achieve the America Dream but has failed to do so over the past
8 years." Eight out of 10 respondents said the best way to restore the
American dream is for the government to "guarantee access to health
care for all Americans"; a similar number says that "government
(should) make sure employers keep their promises to employees,
including protecting their pensions and health care."
One of the
crucial takeaways from the survey is that so-called "Reagan Democrats"
-- a constituency that has been easily swayed by conservative messages
on social issues -- are up for grabs in this election. As the authors
note, "A shift in voting behavior among Reagan Democrats could signal a
transformation in U.S. politics and the end of the conservative era
that Ronald Reagan began."
Those attitudes were confirmed by a poll of "middle-class families"
released by the Drum Major Institute last month. It found broad support
for key policies that might rebuild the working class, even among
Republicans and even among those who say they plan to vote for the GOP
ticket in November:
Despite media depictions of
a sharp red and blue divide, the nation's middle class displays broad
consensus on a range of public policies aimed at easing their economic
squeeze: They support a universal national health insurance plan,
requiring employers to provide paid family and medical leave, making it
easier for employees to join labor unions and allowing bankruptcy
judges to change mortgage payments to keep homes out of foreclosure. A
majority of middle-class adults -- whether they are Democrats,
Republicans or independents and whether they are supporters of John
McCain or Barack Obama for president -- believe that these policies
represent good ideas for the country.
Looking at
these trends, veteran Democratic pollsters Stan Greenberg and Andrew
Baumann released a memo in August that concluded that voters today see
parallels with the 1930s, and they want bold proposals, reminiscent of
FDR's New Deal, to restore their sense of economic security. Greenberg
and Baumann noted that the depth of dissatisfaction with our current
economic course is almost unprecedented, and that the country is
undergoing fundamental and historic changes. The key finding was that
voters are unmoved by proposals that tinker around the edges of the
problems America faces today. "This belief that the country is
undergoing fundamental change," they argued, "combines with the depth
of pessimism voters currently feel about the direction of the nation to
create an opening for candidates who can offer major changes and a bold
new direction for the country. Just 35 percent of voters say we can
solve America's problems with minor changes, while nearly two-thirds
believe it will take 'major changes' to bring about solutions."
According
to their polling, bold economic proposals can compete head-to-head with
McCain's emphasis on his heroic resume, his full-throated defense of
American power and his promise of protection in what he frequently
calls a "dangerous world." Greenberg and Baumann found that voters see
a clear and direct connection between restoring the economic strength
of the country and its standing as a shining "city on the hill" -- a
leader of the "free world."
A remarkable 82
percent find truth (nearly half finding a great deal of truth) in the
idea that America's greatness is waning because of the decline in the
middle class and that a "dramatic change" in our economic policies is
required to reverse the situation. Moreover, 85 percent find truth (43
percent a great deal of truth) in the idea that the decline of the
middle class is "reducing our standing in the world (and) leaving our
way of life under assault."
Can Obama Deliver?
Obama's economic prescriptions are significantly more far-reaching, and more progressive, than those ultimately enacted during the Clinton administration.
He
supports most of the key policy proposals cooked up in Democratic
circles in recent years, including calls for a shift toward "fair
trade," support of the Employee Free Choice Act, a bill that would allow workers to join a union without fear of reprisal from their bosses, and the cornerstone the "green jobs" program that advocates say would create millions of new, well-paying jobs while weaning the United States off hydrocarbons.
It
would be wrong to dismiss those proposals as just so much centrist
tinkering -- they're not -- but it's also true that with very few
exceptions, progressive thinkers outside the orbit of the Democratic
Party have criticized them as coming up short, either because of their
fundamental design or due to insufficient funding (and, in some
instances, their vagueness).
But in a political climate in which
perception often outweighs policy, the question remains whether Obama,
who is a genuine mediator at heart and firmly believes in bringing all
sides of an issue to the table to work out a compromise, can articulate
the kind of new approach for which Americans hunger right now.
There
have been some positive signs -- signs that the campaign gets it -- in
recent weeks. During his nomination acceptance speech, Obama referred
to "that old, discredited Republican philosophy -- give more and more
to those with the most and hope that prosperity trickles down to
everyone else. In Washington, they call this the Ownership Society, but
what it really means is: You're on your own. Out of work? Tough luck.
No health care? The market will fix it. Born into poverty? Pull
yourself up by your own bootstraps -- even if you don't have boots.
You're on your own. Well it's time for them to own their failure."
It
remains to be seen whether the campaign keeps hitting that message
consistently, and hard, and, if so, how that will play with Obama's
image as a "post-partisan" candidate. But it's clear that given the
choice between culture war and class war, there are a lot of
low-hanging votes out there that can be won over by unapologetically
opting for the latter.
Joshua Holland is an AlterNet staff writer.
© 2008 Independent Media Institute. All rights reserved.
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September 13, 2008 at 04:15 PM in Business Models, Consumer trends | Permalink
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