The submerged state


If the Democrats ever want to win another election they need to abandon neoliberalism.

Post-Watergate Democrats turned their backs on the central tenet of the New Deal–that government should help Americans. In the process, they quit representing unions and working-class Americans in order to rake in the corporate cash. Now, the Democrats have internalized the values of neoliberal governance–that all should be subsumed by the market.

The neoliberal method of governance is clearly visible with the implementation of Obama’s signature policy–the Affordable Care Act. Instead of using government to provide universal healthcare, Obama used government to force Americans into a healthcare insurance market. If Obama and the Democrats had embraced a simple robust government system, like Medicare-for-all, in which the government directly provided health care, the consequences of any attempt to shrink it or eliminate it would be obvious, and Americans would have a stronger investment in defending it. But instead, the ACA was designed to do something far more complicated: to provide affordable health insurance using a privatized healthcare market system that would maintain the role of private, profit-seeking corporations as insurance providers. Obama’s effort to preserve the primacy of health insurance companies made the ACA so insanely complex, and the government’s role so remote and indirect, that now when Trump tries to dismantle Obamacare, most people don’t know what’s going on – and they don’t care.

In the process of embracing a neoliberal version of governance, the Democrats have submerged the state. Cornell professor Suzanne Mettler describes the submerged state: “In recent decades, federal policymakers have increasingly shunned the outright disbursing of benefits to individuals and families and favored instead less visible and more indirect incentives and subsidies, from tax breaks to payments for services to private companies. These submerged policies, obscure the role of government and exaggerate that of the market. As a result, citizens are unaware not only of the benefits they receive, but of the massive advantages given to powerful interests, such as insurance companies and the financial industry. Neither do they realize that the policies of the submerged state shower their largest benefits on the most affluent Americans, exacerbating inequality.”

While Democrats were pledging fealty to the market god, guess who attacked two of the foundational elements of neoliberalism—free trade and financialization–on his way to a surprise presidential win?

Labor organizer, Les Leopold, has written an article taking neoliberal Democrats to task, and warning that if Democrats attack President Trump from a neoliberal position they could be playing right into his hands.

“Not only is Trump violating neoliberal theory, he also is clashing with the most basic way Wall Street cannibalizes us. Without the free movement of capital, assisted by trade deals, financial elites and their corporate partners would not be able to slash labor costs, destroy unions and siphon off wealth into their own pockets.

In particular, we should be extremely worried about how Trump is approaching the loss of manufacturing jobs. The neoliberal fog should not cause us to miss the obvious: presidents Obama and Clinton did absolutely nothing to stop the hemorrhaging of middle-class manufacturing jobs to low-wage countries. (U.S. manufacturing fell from 20.1 percent of all jobs in 1980 to only 8.8 percent by 2013.) Not only did Obama and Clinton fail to stop even one factory from moving away, but they truly believed that capital mobility and free trade were good for America and the world. In other words they had sipped plenty of the neoliberal Kool-Aid.

Meanwhile, Trump is all in. He is saying that jobs in the U.S. are more important than the long-run benefits of capital mobility and TPP/NAFTA agreements. If he keeps bashing corporations for moving jobs abroad and if he manages to ignite even a mini U.S. manufacturing jobs boom, Trump could be with us for eight long years.”

Do the Democrats even want to win elections, or are they content to be the other corporate party that doesn’t suck quite as bad?

In my opinion the Democrats aren’t going to quit their neoliberal ways. For examples of how they are doubling down on neoliberalism, see here, and here.

In order to effectively oppose Trump the left is going to have to kill the neoliberal wing of the DNC and pry their cold dead hands from the levers of power.

After that, we need to do what the Democrats of yore did–use government to improve Americans lives, by subsidizing education, health care, super trains, childcare, etc.

Update: To see the Democratic embrace of neoliberalism in real time, watch Nancy Pelosi, lecture this poor college student who had the temerity to ask if the Democrats would ever consider progressive economic policies.

Update 2: Glen Greenwald notices the sorry state of Democrat affairs.

“A failed, collapsed party cannot form an effective resistance. Trump did not become president and the Republicans do not dominate virtually all levels of government because there is some sort of massive surge in enthusiasm for right-wing extremism. Quite the contrary: This all happened because the Democrats are perceived — with good reason — to be out of touch, artificial, talking points-spouting automatons who serve Wall Street, Silicon Valley, and the agenda of endless war, led by millionaires and funded by oligarchs to do the least amount possible for ordinary, powerless citizens while still keeping their votes.”




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