The Failure of Neo-Liberal Politics

As Scorn for Vote Grows, Protests Surge Around Globe

By NICHOLAS KULISH, The New York Times

Published: September 27, 2011

Increasingly, citizens of all ages, but particularly the young, are rejecting conventional structures like parties and trade unions in favor of a less hierarchical, more participatory system modeled in many ways on the culture of the Web.

In that sense, the protest movements in democracies are not altogether unlike those that have rocked authoritarian governments this year, toppling longtime leaders in Tunisia, Egypt and Libya. Protesters have created their own political space online that is chilly, sometimes openly hostile, toward traditional institutions of the elite.

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In the wake of the Soviet Union’s collapse in 1991, a consensus emerged that (neo) liberal economics combined with democratic institutions represented the only path forward. That consensus, championed by scholars like Francis Fukuyama in his book “The End of History and the Last Man,” has been shaken if not broken by a seemingly endless succession of crises – the Asian financial collapse of 1997, the Internet bubble that burst in 2000, the subprime crisis of 2007-8 and the continuing European and American debt crisis – and the seeming inability of policy makers to deal with them or cushion their people from the shocks.

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Mr. Hazare’s anticorruption campaign tapped a deep chord with the public precisely because he was not a politician. Many voters feel that Indian democracy, and in particular the major parties, the Congress Party and the Bharatiya Janata Party, have become unresponsive and captive to interest groups. For almost a year, India’s news media and government auditors have exposed tawdry government scandals involving billions of dollars in graft.

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The political left, which might seem the natural destination for the nascent movements now emerging around the globe, is compromised in the eyes of activists by the neoliberal centrism of Bill Clinton and Tony Blair. The old left remains wedded to trade unions even as they represent a smaller and smaller share of the work force. More recently, center-left participation in bailouts for financial institutions alienated former supporters who say the money should have gone to people instead of banks.

The entrenched political players of the post-cold-war old guard are struggling. In Japan, six prime ministers have stepped down in five years, as political paralysis deepens. The two major parties in Germany, the Christian Democrats and the Social Democrats, have seen tremendous declines in membership as the Greens have made major gains, while Chancellor Angela Merkel has watched her authority erode over unpopular bailouts.

In many European countries the disappointment is twofold: in heavily indebted federal governments pulling back from social spending and in a European Union viewed as distant and undemocratic. Europeans leaders have dictated harsh austerity measures in the name of stability for the euro, the region’s common currency, rubber-stamped by captive and corrupt national politicians, protesters say.

“The biggest crisis is a crisis of legitimacy,” Ms. Solanas said. “We don’t think they are doing anything for us.”

Why Liberals Are Lame: McCarthyite Identity Politics as Cover for Bankrupt Policies

Yves Smith, Naked Capitalism

09/28/2011

The latest desperate strategy of Obama’s spin-meisters highlights the rot at the core of the Democratic party: the heavy handed use of identity politics as a cover for neoliberal policies that betray the very groups the party purports to represent.

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(A)s Obama’s economic policies have failed to pull the economy out of its crisis-induced deep malaise, he has done nothing different save get more pissy and double down on his failed strategy of selling out the middle class. His recent, and no doubt desperation-induced effort to rekindle the support of his badly abused base via gestures like a millioniares’ tax, are likely to go the way of past promises of change: they will be watered down to thin gruel so as not to ruffle his moneyed backers. It is remarakbly disingenuous for Harris-Perry to contend that dissatisfaction with Obama results from racism, as opposed to (among other things) ineffective policy responses to substantial and widespread economic stress.

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The left is obsessed with what ought to be peripheral concerns, namely, political correctness and Puritanical moralizing, because it is actually deeply divided on the things that matter, namely money and the role of the state. The Democrats have been so deeply penetrated by the neoliberal/Robert Rubin/Hamilton Project types that they aren’t that different from the right on economic issues. Both want little regulation of banking and open trade and international capital flows. Both want to “reform” Medicare and Social Security. Both are leery of a welfare state, the Republicans openly so, the Rubinite Dems with all sorts of handwringing and clever schemes to incentivize private companies that generally subsidize what they would have done regardless (note that Americans have had a mixed record in providing good social safety nets, but a big reason is our American exceptionalism means we refuse to copy successful models from abroad).

The powerful influence of moneyed interests on the Democratic party has achieved the fondest aims of the right wing extremists of the 1970s: the party of FDR is now lukewarm at best in its support of the New Deal. Most Democrats are embarrassed to be in the same room with union types. They are often afraid to say that government can play a positive role. They were loath to discuss the costs of income inequality until it became so far advanced that it is now well nigh impossible to reverse it. After all, that sort of discussion might sound like class warfare, and God forbid anyone on the mainstream left risk sound like Marx.

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So the Democratic party (and remember, our two party system makes the Democrats the home by default for the left) pretends to be a safe haven for all sorts of out groups: women, gays, Hispanics (on their way to being the dominant group but not there yet), blacks, the poor. But this is stands in stark contradiction to its policies of selling out the middle class to banks and big corporate interests, just on a slower and stealthier basis than the right. So its desperate need to maintain its increasingly phony “be nice to the rainbow coalition” branding places a huge premium on appearances. It thus uses identity politics as a cover for policy betrayals. It can motivate various groups on narrow, specific issues, opening the way for the moneyed faction to get what it wants.

It took most people far too long to get that Obama was a phony because the presumption that a black man would be sympathetic to the fate of the downtrodden is a deeply embedded but never voiced prejudice (and this bias is exploited successfully by the right in depicting Obama as a socialist). Other elements of traditional Democratic associations played into the Obama positioning: his Administration is chock full of technocratic Harvard wonks, and the last time an Administration was so dominated by technocrats was under Kennedy, the last Democratic Administration to have a strongly positive (indeed romanticized) image. (Yes, the Clintons also liked fancy resume types, but they also placed a very high premium on loyalty, and with the result that long-standing supporters often wound up in surprisingly senior roles).

These traditional iconic symbols of liberalism – secular urban elitism, blackness, technocratic skill, micro-issue identity based political organizing groups – have been fully subverted in the service of banking interests. Obama is the ultimate, but not the only, piece of evidence that these symbols are now used simply to con the Democratic base out of their support and money.