Build Back Better

We’ve been instructed for 40 odd years that there’s no alternative to neoliberalism when it comes to how we organize our economy, but the attempt by the Biden administration to enact an infrastructure spending program looks to challenge this sentiment.

It’s not like an infrastructure spending program isn’t desperately needed after decades of neglect, it’s just that we’ve advanced the neoliberal project of hollowing out government to such a degree that it will be interesting to see how it all plays out.

For instance, how will the policy makers describe–intellectually–what they are trying to do?

It will be tempting to turn to US history with the New Deal and Great Society programs as a template. But any such gaze backwards will need to be tempered with a clear-eyed assessment of the shortcomings and historical anomalies of such programs. In other words, it’s not the 1930’s or even the 1960’s when the US was a much more rich, productive and blessed with an overabundance of natural resources.

We will also have to be cognizant of the actual political/economy of our present day country with its penchant for a permanent warfare state dominated by the military/industrial/complex and Wall Street. The notion that our government that’s waging nonstop disastrous wars and circling the planet with hundreds of military bases can spend money on “we the people” seems ludicrous.

We know, of course, where the Republicans stand on government after 40 odd years of describing it as the problem. Senate Minority Leader Mitch McConnell (R-Kentucky) told reporters that the $2.2 trillion plan that the White House unveiled Wednesday — which features major investments in infrastructure, climate measures and proposals to tackle inequality — “is not going to get support from our side.” He also reiterated his intention to oppose the broader Democratic agenda under Biden. “I’m going to fight them every step of the way because I think this is the wrong prescription for America.”

Republicans are also predictably opposed to the tax hikes on corporations and the wealthy that are included to pay for the plan. But, without the tax hikes to pay for the plan, the plan would likely be paid for by adding to the federal deficit, which Republicans have renewed their concerns about with Democrats in charge.

At this point it’s obvious that Republicans aren’t opposed to socialism per se but only socialism that benefits poor people and minoritiesSocialism for farmers and industrialists is just fine as far as they are concerned.

Sadly to say the Republican view has become the norm. Like I stated at the the beginning, we’ve been so far down the road of neoliberalism, with it’s penchant for privatization and financialization of infrastructure to even envision an alternative. Which sucks because the way in which government funded infrastructure before is what made America the envy of the world. It was a mode of economic development that represented the notion that any rent-yielding resource – banking, land, natural resources and natural infrastructure monopolies – should be in the public domain to provide basic needs to everybody – freely.

The impulse goes back to economists like Simon Patten who believe that to have a true free market the state needs to subsidize infrastructure to keep costs down, rather than having powerful monopolies enacting tollbooths at critical chokepoints. Patten said that public infrastructure is a fourth factor of production. But its role isn’t to make a profit. It’s to lower the cost of public services and basic inputs to lower the cost of living and lower the cost of doing business to make the economy more competitive.

The alternative way simply is to privatise these ‘public goods’ (as in the US), where they are provided at a financialized maximum cost – including interest rates, dividends, management fees, and corporate manipulations for financial gain. Presently our economy has become debt-driven, hyper-financialised, yet stagnant, making it hard to create a new business or spend money into the economy.

Debt eats us alive. Think about it: the biggest element in anyone’s budget today is housing at 40%, which simply reflects high house prices, based on a debt-fuelled market. Suppose too, you have low-cost public education. Well then, you are rid of education-led debt, and its interest cost. Suppose you have public healthcare, and low priced transport infrastructure. Then you would have the capacity to spend – It becomes a low-cost economy, and consequently it would grow.

Crazy talk, I know.

Going further, it’s been a long time since the U.S. was even a capitalist economy; it’s hardly even a market economy today. It has become, more and more, a rentier economy, dominated by financial interests controlled by the 1%.

Which brings us to the crux of the issue with the infrastructure proposal. Any such plan must be coordinated within an industrial policy that all advanced economies operate by. Critics of US economic policies lament that the country doesn’t have an industrial policy but they are missing the obvious. Every economy is planned it’s just that ours is planned by Wall Street, with its short term focus on next quarter’s bonuses.

Even if it was only up to the Democrat’s it appears that we are fucked. Because they’ve transitioned from a party that represented and wide panoply of American workers to one that represents the professional/managerial/class, there are serious problems with Biden’s infrastructure program, which ultimately doesn’t offer a realistic framework to upgrade America’s decaying infrastructure, revitalize U.S. manufacturing, and create the kinds of high-quality jobs that Biden promised to provide during his campaign. 

Instead, economist Marshall Aurerback, says that the new plan is a dog’s breakfast of neoliberalism and “woke” placebo reforms that avoid a lot of hard choices that might offend the party’s main constituencies. The historic, broadly based New Deal majoritarian coalition is no more. Today the Democratic Party exists to expand employment opportunities for college-educated, socially “woke” professionals, while adding new goodies for the personal needs of the professional managerial class. 

From the slogan that they have chosen it seems that Biden and the members of his team learned a valuable lesson from their time in the Obama administration. Don’t do better policy when you can do better PR.

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