Posts Tagged ‘Bill Clinton’

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Billbama

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Mark Tansey, “Discarding the Frame” (1993″

Obviously, recent events—such as Brexit, Donald Trump’s presidency, and the rise of Bernie Sanders and Jeremy Corbyn—have surprised many experts and shaken up the existing common sense. Some have therefore begun to make the case that an era has come to an end.

The problem, of course, is while the old may be dying, it’s not all clear the new can be born. And, as Antonio Gramsci warned during the previous world-shaking crisis, “in this interregnum morbid phenomena of the most varied kind come to pass.”

For Pankaj Mishra, it is the era of neoliberalism that has come to an end.

In this new reality, the rhetoric of the conservative right echoes that of the socialistic left as it tries to acknowledge the politically explosive problem of inequality. The leaders of Britain and the United States, two countries that practically invented global capitalism, flirt with rejecting the free-trade zones (the European Union, Nafta) they helped build.

Mishra is correct in tracing British neoliberalism—at least, I hasten to add, its most recent phase—through both the Conservative and Labour Parties, from Margaret Thatcher to Tony Blair and David Cameron.* All of them, albeit in different ways, celebrated and defended individual initiative, self-regulating markets, cheap credit, privatized social services, and greater international trade—bolstered by military adventurism abroad. Similarly, in the United States, Reaganism extended through both Bush administrations as well as the presidencies of Bill Clinton and Barak Obama—and would have been continued by Hillary Clinton—with analogous promises of prosperity based on unleashing competitive market forces, together with military interventions in other countries.

Without a doubt, the combination of capitalist instability—the worst crisis of capitalism since the first Great Depression—and obscene levels of inequality—parallel to the years leading up to the crash of 1929—not to mention the interminable military conflicts that have deflected funding at home and created waves of refugees from war-torn zones, has called into question the legacy and presumptions of Thatcherism and Reaganism.

Where I think Mishra goes wrong is in arguing that “A new economic consensus is quickly replacing the neoliberal one to which Blair and Clinton, as well as Thatcher and Reagan, subscribed.” Yes, in both the United Kingdom and the United States—in the campaign rhetoric of Theresa May and Trump, and in the actual policy proposals of Corbyn and Sanders—neoliberalism has been challenged. But precisely because the existing framing of the questions has not changed, a new economic consensus—an alternative common sense—cannot be born.

To put it differently, the neoliberal frame has been discarded but the ongoing debate remains framed by the terms that gave rise to neoliberalism in the first place. What I mean by that is, while recent criticisms of neoliberalism have emphasized the myriad problems created by individualism and free markets, the current discussion forgets about or overlooks the even-deeper problems based on and associated with capitalism itself. So, once again, we’re caught in the pendulum swing between a more private, market-oriented form of capitalism and a more public, government-regulated form of capitalism. The former has failed—that era does seem to be crumbling—and so now we begin to turn (as we did during the last system-wide economic crisis) to the latter.**

However, the issue that keeps getting swept under the political rug is, how do we deal with the surplus? If the surplus is left largely in private hands, and the vast majority who produce it have no say in how it’s appropriated and distributed, it should come as no surprise that we continue to see a whole host of “morbid phenomena”—from toxic urban water and a burning tower block to a new wave of corporate concentration  and still-escalating inequality.

Questioning some dimensions of neoliberalism does not, in and of itself, constitute a new economic consensus. I’m willing to admit it is a start. But, as long as remain within the present framing of the issues, as long as we cannot show how unreasonable the existing reason is, we cannot say the existing era has actually come to an end and a new era is upon us.

For that we need a new common sense, one that identifies capitalism itself as the problem and imagines and enacts a different relationship to the surplus.

 

*I add that caveat because, as I argued a year ago,

Neoliberal ideas about self-governing individuals and a self-organizing economic system have been articulated since the beginning of capitalism. . .capitalism has been governed by many different (incomplete and contested) projects over the past three centuries or so. Sometimes, it has been more private and oriented around free markets (as it has been with neoliberalism); at other times, more public or state oriented and focused on regulated markets (as it was under the Depression-era New Deals and during the immediate postwar period).

**And even then it’s only a beginning—since, we need to remember, both Sanders and Corbyn did lose in their respective electoral contests. And, at least in the United States, the terms of neoliberalism are still being invoked—for example, by Ron Johnson, Republican senator from Wisconsin—in the current healthcare debate

wealth

Everyone knows wealth in the United States is unequally distributed, even more than the nation’s income (and that’s saying something).

For example, according to a new report from the Congressional Budget Office [ht: ja],

In 2013, families in the top 10 percent of the wealth distribution held 76 percent of all family wealth, families in the 51st to the 90th percentiles held 23 percent, and those in the bottom half of the distribution held 1 percent. Average wealth was about $4 million for families in the top 10 percent of the wealth distribution, $316,000 for families in the 51st to 90th percentiles, and $36,000 for families in the 26th to 50th percentiles. On average, families at or below the 25th percentile were $13,000 in debt.

But, wait, it gets worse. The distribution of wealth among the nation’s families was more unequal in 2013 than it was in 1989. For instance, the difference in wealth held by families at the 90th percentile and the wealth of those in the middle widened from $532,000 to $861,000 over the period (both in 2013 dollars). The share of wealth held by families in the top 10 percent of the wealth distribution increased from 67 percent to 76 percent, whereas the share of wealth held by families in the bottom half of the distribution declined from 3 percent to 1 percent.*

Yes, that’s right: in 2013, the bottom half of U.S. families held only 1 percent of the nation’s wealth.

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And it gets even worse: from 1989 to 2013, the average wealth of families in the bottom half of the distribution was less in 2013 than in 1989. It declined by 19 percent (in contrast to the 153-percent increase for families in the top 10 percent). And the average wealth of people in the bottom quarter was thousands of dollars less in 2013 than it was in 1989.**

poor wealth

So, let’s get this straight. The share of wealth going to the top 10 percent of households, already high, actually increased between 1989 and 2013. And the share held by the bottom 50 percent, already tiny, fell. And, finally, the average wealth for families in the bottom half of the distribution was less in 2013 than in 1989 and many more of them were in debt.

Now, to put things in perspective, the United States had Democratic presidents (Bill Clinton and Barack Obama) during thirteen of the twenty-four years when workers and the poor were being fleeced.

And now they’re being asked to vote for one more Democrat, with the same economic program, because it will “make history”?

 

*To be clear, a large portion of the decline in wealth for the bottom 50 percent occurred after the crash. Still, compared with families in the top half of the distribution, families in the bottom half experienced disproportionately slower growth in wealth between 1989 and 2007, and they had a disproportionately larger decline in wealth after the 2007-09 recession.

**In 1989, families at or below the 25th percentile were about $1,000 in debt. By 2013, they were about $13,000 in debt, on average. Overall indebtedness also increased during the same period: by 2013, 12 percent of families had more debt than assets, and they were, on average, $32,000 in debt.

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Bob Trotman, “Business as Usual” (2009)

Is anyone else struck by the contradiction between what is actually going on in the world and the fact that, for those in charge, it’s just business as usual?

Consider, for example, the decision to drop the charges against the three remaining officers facing trial in connection with the April 2015 death in policy custody of Freddie Gray. In fact, according to Mapping Police Violence, “only 10 of the 102 cases in 2015 where an unarmed black person was killed by police resulted in officer(s) being charged with a crime, and only 2 of these deaths (Matthew Ajibade and Eric Harris) resulted in convictions of officers involved.” Charles Blow, for one, is appropriately “incandescent with rage”:

Bill Clinton, who I found more beguiling than many, apparently, took the stage and shifted the burden of dismantling oppression from the shoulders of the oppressors to the shoulders of the oppressed, saying: “If you’re a young African-American disillusioned and afraid, we saw in Dallas how great our police officers can be. Help us build a future where nobody is afraid to walk outside, including the people that wear blue to protect our future.”

How are the people without the power, the people against whom the power is being exercised, supposed to alter the perversion of that power if the abusers are not held accountable?

I am exhausted. I am repulsed. I am over all the circular dialogue. But I don’t know precisely where that leaves me other than in a hurt and festering place. America is edging ever closer to telling people like me that the eye of justice isn’t blind but jaundiced, and I say back to America, that is incredibly dangerous.

And during that same convention, as broad swathes of Americans continue to suffer from the Wall Street-engineered crash of 2007-08 (not just, as Barack Obama put it, “pockets of America that never recovered from factory closures”), hordes of financial industry executives (as well as drug companies, health insurers, and others) descended on Philadelphia.

While protesters marched in the streets and blocked traffic, Democratic donors congregated in a few reserved hotels and shuttled between private receptions with A-list elected officials. If the talk onstage at the Wells Fargo Center was about reducing inequality and breaking down barriers, downtown Philadelphia evoked the world as it still often is: a stratified society with privilege and access determined by wealth.

In fact, as Thomas Frank warns, Donald Trump might end up stealing the voters Hillary Clinton and the Democratic Party are taking for granted.

Let’s see: trade agreements, outreach to hawks, “bipartisanship”, Wall Street. All that’s missing is a “Grand Bargain” otherwise it’s the exact same game plan as last time, and the time before that, and the time before that. Democrats seem to be endlessly beguiled by the prospect of campaign of national unity, a coming-together of all the quality people and all the affluent people and all the right-thinking, credentialed, high-achieving people. The middle class is crumbling, the country is seething with anger, and Hillary Clinton wants to chair a meeting of the executive committee of the righteous.

When Democrats sold out their own rank and file in the past it constituted betrayal, but at least it sometimes got them elected. Specifically, the strategy succeeded back in the 1990s when Republicans were market purists and working people truly had “nowhere else to go”. As our modern Clintonists of 2016 move instinctively to dismiss the concerns of working people, however, they should keep this in mind: those people may have finally found somewhere else to go.

Meanwhile, the European Union is disintegrating and the euro zone continues to impose Draconian austerity measures. As Joseph Stiglitz explains in a recent interview, banks and corporate interests generally have been the only beneficiaries.

Q. In your telling, Germany has imposed austerity across Europe out of faith in a discredited economic idea, the notion that if policy makers concentrate solely on preventing budget deficits and inflation, the markets can be counted on to deliver prosperity. A lot of your book is devoted to demolishing this idea. Does the German elite still really believe in this philosophy, or is something else at play?

A. I’ve visited Germany often, and I’m shocked about how strong the belief is in this view that has been totally discredited elsewhere.

But the policies are mixed together with interests. When the Greek crisis broke out in 2010, what was really at risk were German and to some extent French banks. And there was an enormous bailout that was called a bailout of Greece but was really a bailout of German and French banks. Most of the money went to Greece and then right away went back to Germany and France. . .

Q. You argue that some European leaders secretly welcomed mass unemployment as a means of adjusting to the crisis because this was the only way they could see to spur investment — lowering wages. The strictures of the euro took other options off the table: Crisis countries could not let their currency fall or lower interest rates or expand government spending. Was unemployment really embraced as a fix?

A. They wanted to break the back of workers. Their view was that workers needed to accept a wage cut and we are going to change the bargaining rules to make it more difficult for them to resist. And if we need to add on a little dose of unemployment, well, that’s unfortunate.

Q. Doesn’t that goal predate the crisis?

A. It’s very clear that the euro was a neo-liberal project in its construction. Employers like low wages. They have broken the back of the unions in many of the countries of Europe. They would view that as a great achievement.

However ironically, it has fallen to the Boston Consulting Group [ht: sm] to sound the alarm about attempting to conduct business as usual:

Societies in the United States and Europe are being fundamentally challenged in ways we have not seen for decades—with nationalistic rhetoric and agendas from the far right and a deep distrust of business, globalization, and technology from the far left. Many worry that such a polarization of public opinion and policy making could introduce new risks and uncertainties that would deter investment (which is already far too low, judging by current interest rates) and undermine the basis for future prosperity.

Why this polarization? While there are many causes, and they vary from country to country, it reflects in large part widespread and growing dissatisfaction with entrenched economic and social inequality and greater personal uncertainty in a fast-changing global economy. It also reflects people’s mistrust of political and corporate elites, who are seen as the architects of this state of affairs. Economic inequality within our societies is a byproduct of the way we have managed the past three and a half decades of global economic integration. At the same time, technology—in particular, recent advances in robotics, machine intelligence, and distributed ledgers (blockchain)—could replace human labor in many areas, further compounding dislocation, inequality, and discontent.

Brexit was a watershed. The British vote to leave the European Union was motivated in large part by frustration with economic stagnation and inequality, and it has created fertile ground for nationalistic, anti-immigrant sentiment. The English West Midlands, the region with highest “leave” vote, has experienced stagnating median household incomes for nearly two decades.

The division between those who have captured the vast majority of the benefits from global integration and technological progress and those who haven’t runs between major cities and smaller communities, between young and old, and between people with different levels of education. And it’s not just Great Britain—70% of the US workforce has experienced no real wage increase in the past four decades. Similar patterns can be observed in Canada, Germany, and other European countries. Wealth concentration has also increased globally, with around 1% of people controlling 50% of the world’s assets.

poll

According to a new New York Times poll, Donald Trump’s and Hillary Clinton’s soaring levels of unpopularity (55 and 52 percent, respectively, compared to favorability ratings of 26 and 31 percent) are extraordinary for the likely nominees of the two major parties. And the head-to-head advantage Clinton enjoys over Trump has narrowed considerably in recent weeks (down to 6 points).

Meanwhile, Bernie Sanders is the only one of the three to have a net positive favorability rating (of 8 points). He also leads a hypothetical matchup against Trump, 51 percent to 38 percent.

Extra reading

Here are some related pieces that deserve a Sunday read:

Thomas Frank on why Hillary Clinton’s 90s nostalgia is so dangerous.

The ongoing debate concerning Bill Clinton’s 1996 welfare law, by Robert Pear.

Trevor Timm’s list of five things people should stop saying about Bernie Sanders.

The actual history of the end of Hillary Clinton’s 2008 campaign, for those who have forgotten or choose not to remember.

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Special mention

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Thomas Piketty, author of Capital in the Twenty-First Century, observes that only the older generation is keeping Hillary Clinton in the race, since Bernie Sanders is polling far ahead of Clinton among younger (18-44) voters.

More importantly, Piketty offers a look back to explain the attraction of Sanders’s progressive agenda today.

Reagan was elected in 1980 on a program aiming to restore a mythical capitalism said to have existed in the past.

The culmination of this new program was the tax reform of 1986, which ended half a century of a progressive tax system and lowered the rate applicable to the highest incomes to 28%.

Democrats never truly challenged this choice in the Clinton (1992-2000) and Obama (2008-2016) years, which stabilized the taxation rate at around 40% (two times lower than the average level for the period 1930 to 1980). This triggered an explosion of inequality coupled with incredibly high salaries for those who could get them, as well as a stagnation of revenues for most of America – all of which was accompanied by low growth (at a level still somewhat higher than Europe, mind you, as the old world was mired in other problems).

Reagan also decided to freeze the federal minimum wage level, which from 1980 was slowly but surely eroded by inflation (little more than $7 an hour in 2016, against nearly $11 in 1969). Again, this new political-ideological regime was barely mitigated by the Clinton and Obama years.

Sanders’ success today shows that much of America is tired of rising inequality and these so-called political changes, and intends to revive both a progressive agenda and the American tradition of egalitarianism. Hillary Clinton, who fought to the left of Barack Obama in 2008 on topics such as health insurance, appears today as if she is defending the status quo, just another heiress of the Reagan-Clinton-Obama political regime.

Sanders makes clear he wants to restore progressive taxation and a higher minimum wage ($15 an hour). To this he adds free healthcare and higher education in a country where inequality in access to education has reached unprecedented heights, highlighting a gulf standing between the lives of most Americans, and the soothing meritocratic speeches pronounced by the winners of the system.

Meanwhile, the Republican party sinks into a hyper-nationalist, anti-immigrant and anti-Islam discourse (even though Islam isn’t a great religious force in the country), and a limitless glorification of the fortune amassed by rich white people. The judges appointed under Reagan and Bush have lifted any legal limitation on the influence of private money in politics, which greatly complicates the task of candidates like Sanders.

However, new forms of political mobilization and crowdfunding can prevail and push America into a new political cycle. We are far from gloomy prophecies about the end of history.

The only significant factor missing in Piketty’s analysis is the role of minority voters in relation to the Clinton machine. But that may change, as Sanders and his proposals receive more attention in the weeks and months ahead.