Nobel laureate economist Joseph Stiglitz is not a fan of neoliberalism.
Three years ago, President Donald Trump’s election and the United Kingdom’s Brexit referendum confirmed what those of us who have long studied income statistics already knew: in most advanced countries, the market economy has been failing large swaths of society.
Nowhere is this truer than in the United States. Long regarded as a poster child for the promise of free-market individualism, America today has higher inequality and less upward social mobility than most other developed countries.
After rising for a century, average life expectancy in the U.S. is now declining. And for those in the bottom 90% of the income distribution, real (inflation-adjusted) wages have stagnated: the income of a typical male worker today is around where it was 40 years ago.
Meanwhile, many European countries have sought to emulate America, and those that succeeded, particularly the U.K., are now suffering similar political and social consequences.
The recent European elections do not give me hope that Europeans are learning from our mistakes, although Josh Marshall argues it’s not as bad as it looks. But let’s go on …
Urban Americans who have profited from globalism are still oblivious to what Reaganomics and its cousin, neoliberaism, have done to large parts of the country. Indeed, I still run into people who insist neoliberalism isn’t even a real thing. They should hang out with me for a while.
The New York Times has one of those “reports from Trump’s America” articles focusing on one laid-off auto plant worker adjusting to life without a job. I found the article compelling, because I know this guy. Not the individual in the article, but his many counterparts. I went to high school with this guy. I run into him at family reunions and funerals. He comes around to mow the lawn and fix the plumbing.
The local variation of this guy is somewhat different in that he may never have had the union job his father had, since the union jobs moved out of here in the 1980s and not just last year. But he knows he doesn’t have the same range of opportunities that his father did. He’s able to maintain a middle-class standard of living by cobbling together more than one job, and his wife works, too, but they do without much of a benefit package. On paper, it may look as if he’s doing all right, but he worries about retirement. HIs dad had a pension and benefits; this guy doesn’t.
This guy blames NAFTA, and both parties, for the loss of union manufacturing jobs that have changed his economic reality. This guy voted for Donald Trump in 2016, big time, but he realizes now that Trump hasn’t actually done anything and probably won’t. He says he’s open to supporting any candidate, of any party, gender, or race, who can give him his old life back, or something similar.
And here’s the part where it’s important for Democrats to talk to this guy, and listen to this guy. In 2016 Clinton didn’t reach this guy, and Trump did, and that’s why he’s president and she isn’t.
Back to Stiglitz:
We can thank former President Ronald Reagan and former British Prime Minister Margaret Thatcher for our current state of affairs. The neoliberal reforms of the 1980s were based on the idea that unfettered markets would bring shared prosperity through a mystical trickle-down process.
We were told that lowering tax rates on the rich, financialization, and globalization would result in higher standards of living for everybody. Instead, the U.S. growth rate fell to around two-thirds of its level in the post-war era — a period of tight financial regulations and a top marginal tax rate consistently above 70% — and a greater share of the wealth and income from this limited growth was funneled to the top 1%.
Instead of the promised prosperity, we got deindustrialization, polarization, and a shrinking middle class. Unless we change the script, these patterns will continue — or worsen.
This is a big deal, and it’s not going to be solved by tweaks to the existing system. The system needs a radical overhaul. And, frankly, I think a big chunk of white guy America is ready to consider a radical overhaul in ways they were not in 1972 or 1980 or 1993 or 2000, and Democrats who still insist on running to the center need to adjust. The center, even assuming there is one, ain’t gonna hold.
I don’t know who Umair Haque is, but he wrote an interesting essay —
Now, at this point, sometimes, Americans interject?—?“our society’s not collapsing!” Sorry, yes it is. Longevity’s falling, incomes are shrinking, happiness is plummeting, suicides are skyrocketing. These mega trends aren’t true anywhere else in the world, apart from maybe North Korea. Then there are the other trends, the sociocultural ones, the weird and gruesome ones?—?school shootings, murder-suicide epidemics among the elderly, old people working at Walmart. I read the other day that 20% of American kids don’t drink water at least once a day. What the? You get the point. America is as close a thing to a collapsing society as a rich country has ever been in human history.
(And yet the truth is that nobody forced that fate on America. American collapse is a self-inflicted tragedy. The Soviets didn’t do it. A bullet didn’t need to be fired. It’s a thing made of capitalism, of supremacy, of patriarchy. Supremacy made Americans?—?enough of them?—?say: “I won’t pay for their schools and hospitals! Those dirty, filthy people are beneath me! Why, they used to be my grandparents’ slaves!” Capitalism made Americans believe that everything could be solved with greed, selfishness, markets, and corporations. And patriarchy made it impossible for anyone but pedigreed white dudes who repeated all the above, ad nauseam, the old refrains of “self-reliance” and “individual responsibility” and “free markets” and so on, to get any kind of attention or influence whatsoever.)
The fact?—?and you’re not going to like this?—?is that while the rest of the rich world, notably Europe, modernized, America never did. It never went anywhere?—?and so today, it’s going backwards, having reached the limits of its old paradigms and attitudes of capitalism, supremacy, and patriarchy.
So here we are, in the allegedly Richest Country in the World, and our infrastructure is crumbling from neglect, our maternal and infant mortality rates get worse and worse, school children go hungry if they don’t have lunch money, the water in many areas isn’t fit to drink, many cities have extreme housing shortages, people die because insulin is too expensive, etc. Our state legislatures can’t bring themselves to address these problems but trip all over themselves rushing to ban abortions and loosen restrictions on firearms. And the federal government is completely frozen because the party that controls the Senate functions only to protect the corrupt president. Brilliant.
Oh, and, in the meantime, our planet is dying.
I am paying no attention to polls until after we’ve had a couple of debates. And I am hoping — possibly foolishly — that major news media will have learned a lesson from 2016 and will bleeping report on the candidates, backgrounds and all, and not just cover politics as a horse race.
And I suspect this guy will listen to a candidate who says that we can’t force GM to re-open its auto plant, but we are hiring crews to fix infrastructure, and we pay good wages and benefits. And we’ll see to it your daughter with cerebral palsy can get the health care and services she needs. We can tax rich people to pay for it.
Why is that so hard?