Tuesday, December 14, 2010
Laurence Lewis on neoliberalismLaurence Lewis provided a good post on the concept of neoliberalism last month, An unlearned lesson about neoliberalism Daily Kos 11/07/2010. Neoliberalism, also known as the Washington Consensus, is an important concept, one that is much discussed in the context of debates over globalization but hardly mentioned in normal political discussion in the mass media.
In an article Lewis cites, The End of Neo-liberalism? Project Syndicate 07/07/2008 Nobel laureate economist Joseph Stiglitz defines neoliberalism as:
... that grab-bag of ideas based on the fundamentalist notion that markets are self-correcting, allocate resources efficiently, and serve the public interest well. It was this market fundamentalism that underlay Thatcherism, Reaganomics, and the so-called “Washington Consensus” in favor of privatization, liberalization, and independent central banks focusing single-mindedly on inflation.Lewis talks about how this ideology displayed itself after President Obama took office:
People were desperate for transformational change, but on the economy they got just a nuanced version of the same basic approach we've seen since the Reagan era, the same basic approach that the Bush meltdown should have ended.This is not the same as saying that there are no important differences between the two parties in the US. More on that below.
That was a historic opportunity for paradigmatic change, and we had a uniquely talented thinker and teacher in the White House to lead that paradigmatic change. Instead, we got bank bailouts, tax cuts, and an inadequate stimulus that the very same few economists who had predicted the economic meltdown warned was an inadequate stimulus. Calls for a second stimulus were ignored. Every small blip of economic improvement was sold as significant, and Wall Street firms made record profits and paid staggering bonuses, but unemployment and under-employment and foreclosures continued to devastate people's lives. The moment passed. The opportunity passed. Political extremism gained a foothold, Democrats lost their footing, and a Republican Party that had been left for dead not even two years earlier, and that still isn't even widely liked, came roaring back to power. [my emphasis]This piece got me thinking about just how the common Democratic and Republican commitment to the ideology of neoliberalism expresses itself. Because the differences are real and important. But at the same time, these last two years of the Obama Administration have given us numerous examples in which the Administration proceeded in ways that were effectively the same as those favored by the Republicans, or rather would likely have been favored by them had John McCain been in the White House.
Yet when it comes to economic policy, for all the real differences between the Administration and Republicans, Lewis' judgment is correct. "The Obama economic team seriously underestimated the severity of the crisis they inherited, and were ideologically incapable of perceiving it as the transformative moment it should have been."
And, as he says in the quote above, "The moment passed."
Tags: neoliberalism, obama administration
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No subject for immortal verse
That we who lived by honest dreams
Defend the bad against the worse."
-- Cecil Day-Lewis from Where Are The War Poets?
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