“The Changing of the Guard:” The Prescient 1980 Book That Foretold the Democrat Love Affair With Neoliberalism

Yves here. Even though it’s conventional to pin the rightward shift in the US on Ronald Reagan, the effort to tear down the New Deal and other social programs was well underway more than a decade earlier. Businessmen associated with the John Birch Society and other extreme conservative groups began collaborating loosely on how to turn the values in the US to the right in the late 1960s. The Powell Memo of August 23, 1971 codified their efforts. As we wrote in ECONNED:

For instance, wealthy conservative lawyer and later Supreme Court justice Lewis Powell wrote a memo to the U.S. Chamber of Commerce in 1971 that galvanized the right wing. He argued that corporations needed to launch a coordinated and sustained attack to discredit liberals. Among the key elements was the creation of a well-funded effort that looked like a “movement” to press its cause with the media. Generously financed “scholars, writers, and thinkers” would demand fair treatment and “equal time” as the wedge for forcing the press
to treat them seriously. In turn, they would recast issues, with the aim of reshaping opinion from the elite to the mass level.

Jimmy Carter accepted some of their world view by embracing deregulation because major companies were harping that regulations had produced a decline in innovation. Again from ECONNED:

By the middle of the decade, a large body of research on innovation found that small entrepreneurial companies were the locus of new practices. In fact, the more big firms an industry had, the less innovative it tended to be. Ironically, government intervention could promote new developments, for instance, by requiring cars to meet new standards (the changes needed to meet
the new demands often spurred other advances). And while experts agreed
that innovation and growth seemed to be linked, there was no consensus on
how to foster it.

Indeed, the boosters of a new hands-off posture toward business were never
able to prove a decline in innovation, much less that regulation was responsible. In fact, the supposed problem was (in a remarkable bout of candor) frequently characterized as a “perceived lag.” However, the science advisor to the White House, Dr. Frank Press, had been co-opted despite the lack of real evidence and backed the corporate agenda.

This post describes how Democrats, in particular Bill Clinton, eagerly jumped on the neoliberal bandwagon as if it were their own.

By NewDealDemocrat. Originally published at Angry Bear

About a month ago I read the synopsis of an interview in which Thomas Frank described the near evisceration of the Democratic Party.  Here’s his simple version:

[T]he Democrats have, what happened is that some years ago they decided they didn’t want to be the party of the people anymore. They didn’t want to be the sort of traditional Democratic Party that I grew up with, the party of Roosevelt, Truman, Kennedy, Johnson. That’s not what they wanted to be.

They wanted to be something different. This involved … It was an enormous transition in the Democratic Party all through the seventies, all through the eighties, all through the nineties until they are what we see them as today. They are a party that represents a group of very affluent white collar professionals. That’s who leads the party. That’s who they speak for. That’s whose issues they care about. That’s really who they are….

[T]he Democrats, as they moved away from their old working class base and they treated them very poorly and they did the same with other essential elements of their constituent groups, minorities for example … [W]hen they did things like got NAFTA passed which was really hard on working class people, when they did those things they used to have a saying. They’d say, ‘Well you know we don’t have to worry about that. Those people have nowhere else to go.’ Nowhere else to go. This was a Democratic saying in the 1990s.

“Trump gave those people somewhere else to go.”

This critique rang a bell, not because I have read similar requiems before, but because I read it as a foretelling nearly 40 years ago, in the late David Broder’s “Changing of the Guard.”  Broder described the worldviews of a bunch of technocratic Democrats — and some Republicans — then in their 30s and 40s, people like Gary Hart, Jerry Brown, and a guy named Bill Clinton, who … well, let me turn the mike over to the right-wing  Commentary Magazine, which said in its review at the time:

For anyone still perplexed by the Democratic party’s recent [in the early 1980s] misfortunes, a careful look at these interviews … suggests that the much-heralded collapse of liberal ideology is a more serious problem than even the election debacle would indicate. The conventional analysis is that liberalism’s dilemma stems from a failure to advance beyond the policies and attitudes embodied in the career of Hubert Humphrey: a reliance on economic growth as the principal means of curbing poverty, a generous and ever-expanding system of social-welfare benefits, and a foreign policy stressing containment of the Soviet Union and aid to the developing world. But it is important to keep in mind that many new-generation liberals have consciously rejected the Humphrey tradition. “We are not a bunch of little Hubert Humphreys,” Gary Hart declared upon winning election to the Senate in 1974 ….

They speak with pride of having promoted more open and efficient government, of being more accessible to the public, of maintaining their “independence” from the established party organizations, and of their opposition to the spoils system.

That was exactly my recollection of the then-young Democrats described in the book. They eschewed New Deal style economic programs, and the unions and big city machines that delivered the electoral victories that made  those programs possible, in favor of social equity, and an economically “efficient” streamlined government, that would produce a  meritocracy which would be accepted as fair by all.

As it happens, I still have my copy of “Changing of the Guard,” so I went back and re-read parts of it, especially the interviews with people like then-Governor Bill Clinton who went on to more prominence.  (Obama was a teenager in high school in Hawaii at the time, so no interview with him!) Keep in mind that all of the quotations you read below are from almost 40 years ago.

Broder begins with a telling overture to economic complacency and political restlessness (pp. 43-44):

The oncoming generation of political leaders is the product of a period of rising independence in our politics ….

A [ ] basic reason has been the mass movement from the cities to the suburbs …. The old fashioned political machine was a product of the big city …. That kind of machine is disappearing ….

A[nother] basic change is that as the country emerged from the Depression and World War II into a period of sustained postwar prosperity, the sharp economic and class lines that marked the New Deal period began to erode ….

Organized labor found itself falling out of comfortable collaboration with other elements of the New Deal coalition [over social justice issues].”

Younger readers may not know this, but one of the chief sources of that falling out was that nepotism was rampant in trade unions. An older member getting a spot for his son or perhaps a nephew or two was not uncommon. Affirmative action or racial quotas meant that some of those family members were rejected in favor of African American applicants. Older union members bristled, to say the least.

To be sure, the young Republicans interviewed were repulsed by what they deemed “over-regulation” by the federal government (pp. 99-100):

[T]he young Republicans’ aversion for federal policy making was more than just a rhetorical bow to [conservatism]…. Both of the men who served as Jerry Ford’s White House chief of staff, Donald Rumsfeld and Richard Cheney, said they had become more conservative in their outlook as a result of what they had seen in Washington.

… Cheney said … “I saw how difficult it is to have government programs well designed to achieve any significant results ….  There are all too often unanticipated consequences” ….

Rumsfeld echoed the same skepticism….

[GOP Delaware Governor Pete] DuPont [had] an argument with then Secretary of Energy James R. Schlesinger, who had demanded to know what had happened to the ‘moderate, thoughtful Congressman’ he had known ….

“I said, ‘I’ll tell you what’s happened to me,’ Du Pont said, ‘I’ve had to go back to Delaware and live under this federal bureaucracy, and I think it has made me very much more hardheaded, considerably more conservative and very antagonistic to what the federal government is constantly forcing me to do. My schools are being run by a federal judge. My prisons are being run by a federal judge. Construction for a new hospital … has been delayed a year and a half because of federal judges’ fiddling around with various lawsuits…. I mean the red tape and the morass and the harassment from Washington is endless ….’”

But if GOP aversion to intervention by the federal government was perhaps only to be expected, they weren’t alone in what Broder described as “public dissatisfaction with the performance and the cost of government” (p. 46):

But the people pressing for change were not only Republicans. Many of the younger Democrats were as impatient with the formulas of the New Deal-Great Society era as any GOP critics…. [lambasting the older generation of Democratic politicians] for not confronting … the need for improved government efficiency  and relief from the ‘overregulation’ of society.

Epitomizing that impatience was Gary Hart:

Hart was cold-blooded in rejecting the New Deal policies of the past… in what turned out to be an accurate preview of the economic and social-policy revisionism of many of the young Democrats elected to Congress in [1974].  They have been far less sympathetic to organized labor, and far more concerned about middle-income taxpayers.

Surprisingly, neither Al Gore nor John Kerry get any significant mention at all in the book, but a discussion of the then-described “New South” dwells at length on a young Governor named Bill Clinton, including a mention that (p. 381):

He is married to an ardent feminist who has kept her maiden name, Hillary Rodham, and her own law practice in Little Rock.

Of Bill Clinton,  Broder writes:

[T]oday’s Southern politicians have moved beyond the race issues that have been dominant in the past …. They are young…. They are well-educated. Most of them have graduate degrees in law or other studies. They bear out Terry Sanford’s contention that the commitment to education which began in his generation of Southern leaders will be accelerated in this new generation ….

Clinton [was] elected as governor[ ] in 1978 on [a] platform[ ] stressing … measures to improve the laggard education systems in their states.

Southern politicians see conservative fiscal policies and sound management as a precondition for gaining public support for the social-welfare programs they espouse.

Clinton said:

“In Arkansas […] there’s probably a hard-core thirty percent that is always going to vote for the more conservative of the two candidates.  But the election can still be won by a more progressive candidate if you can persuade people you’ve got a center core* they can understand and relate to and trust’ …. [E]conomic conservatism is more important than social conservatism,” he said.

[*In hindsight, it might be said that if you can fake that ‘center core,’ you can get elected President!]

Of the then-young Democratic and GOP leaders in the South, Broder says (p. 382):

The new politicians of the South are [not] birds of a feather…. Rather, they are competitors for control of a region whose political future is, more than almost any other part of the nation, up for grabs in the Eighties and Nineties.”

“On the surface, the populist Democrats like Clinton seem at the opposite pole from the conservative Republicans like … [Trent] Lott …, who stress their criticism of the expanding role of the federal government…. But in reality, the voters … seem equally receptive to either appeal….  What is important is simply that the candidate place himself on the voters’ side against some of the big, unresponsive bureaucracies….

At least some of the older generation of Democrats were aware of the change. Here’s former Governor Pat Brown, Jerry’s father (p. 17):

[T]he real change is that after the New Deal, the Fair Deal, the War on Poverty and the Great Society, the whole Democratic Party has retreated into conservatism.

Alas, Pat Brown also thought that the conservatisim of Proposition 13 in California would be a passing fad. And former democratic Governor of North Carolina Terry Sanford and young democrat-turned-republican Mississippi Senator Trent Lott both swore that the issue of race in the South was over.

In contrast, one young State Representative in Massachusetts,  Barney Frank, described his still very relevant signature issue (p. 457):

..the corrosive effect of interstate competition for industry. … [T]he economy has become more national, but the political system hasn’t, so business can play the states off one against the other.

But portentiously, Frank described himself as one of the few remaining leftist liberals.

In his conclusion, Broder accurately forecast the large-scale dismantling of populist  government intervention in the economy (p. 473):

The products of the “baby boom”* [*actually, since most of the politicians interviewed were born before 1946, they were not Boomers] … are all rebels against … [bureaucratic] mass culture and huge institution…. The bipartisan drive for deregulation of the economy and decentralization of the government decision making is a secular force that seems almost certain to gain momentum as this generation gains power.

Even now, two generations later, as we have seen that when you take economic equity for granted it goes away, Chuck Schumer in 2016 and Mark Penn this year have continued to laud a strategy grasping for suburban Republicans and eschewing the traditional Democratic urban working class.  As it turned out, bill Clinton had the priorities of voters fundamentally wrong: social conservatism was categorically more important to a critical mass of (especially white Southern) voters  than economic conservatism.

But the ideology that Bill Black spoke of in June was already flowering 40 years ago — the turning away from traditional Democratic power centers, and from broad government programs anchored in economic populism, in favor of social issues and a commitment to lower taxation and more efficient fiscal prudence — espoused by a group that grew up in the post-war middle class suburbs and sought to appeal to those suburbanites first and foremost, taking for granted that the broad prosperity that those programs forstered would continue.

How much the country has suffered from how wrong they were.

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51 comments

  1. nonclassical

    …most castigation of Carter administration centers upon (Koch Bros) libertarian propaganda focusing upon railroad deregulation; however, Carter faced either bailing out railroads recently bailed, or deregulation. Libertarian think tank propagandists know this perfectly well…

    Actual impetus for “neoliberalism” is defined here: https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

    “Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

    Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump. But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?

    Inequality is recast as virtuous. The market ensures that everyone gets what they deserve.
    So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.

    Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

    Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

    The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

    In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

    With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal international”: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

    As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency.”

    1. Yves Smith Post author

      Um, the deregulation of trucking and airlines were the two most important deregulatory moves that Carter took. Many economists contend that together they were more important than anything Reagan did. And there was no necessity pretense there.

      1. upstater

        Railroads and electric utility industry bearing Carter’s imprint…

        The 1980 Staggers Act deregulated railroads, resulting in more than halving of employment, abandonment of tens of thousands of miles of infrastructure, turning away carload freight (used by smaller manufacturers) in favor of single-commodity unit trains or containers, the disappearance of transparent, regulated pricing of services into secret contacts and the creation of of a privately-owns system consisting of basically 4 regional monopolies or oligopolies.

        Staggers was a WV democrat and the act that bears his name was passed by a democratic con-gress and signed by Carter.

        Much of the deregulation of the electric utility industry began under Carter, too. The Public Utility Regulatory Policies Act in 1978 allowed for “merchant generation” and unbundling of vertically-integrated regulated rates. This has created the “market” in which Enron flourished and then crashed, and where the investment banks game the markets today.

        1. nonclassical

          ENRON was a direct result of Texas republican Senator (Senate Banking Chairman) Phil Gramm, who authored “Gramm-Leach-Bliley Act”, repealing Glass-Steagal, for which his wife Wendy earned seat on board of ENRON:

          “As chairman of the Senate Banking Committee from 1995 through 2000, Gramm was Washington’s most prominent and outspoken champion of financial deregulation. He played a leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act, which separated commercial banks from Wall Street. He also inserted a key provision into the 2000 Commodity Futures Modernization Act that exempted over-the-counter derivatives like credit-default swaps from regulation by the Commodity Futures Trading Commission. Credit-default swaps took down AIG, which has cost the U.S. $150 billion thus far.”

      2. Carolinian

        As it turned out, bill Clinton had the priorities of voters fundamentally wrong: social conservatism was categorically more important to a critical mass of (especially white Southern) voters than economic conservatism.

        Exactly. And the New South could be worth talking about. It’s certainly no coincidence that Carter had been governor of Georgia with Atlanta the vanguard and anchor of the so-called New South extending up through a corridor of smaller satellites such as Greenville, SC and Charlotte, NC. The New South philosophy said that race was holding the South back and that the region should transition into a kind of business friendly libertarian Arcadia. While elite control of the old agrarian south depended on race competition as a wedge the new wedge would be religion and culture. The Republican takeover of the south–spearheaded by Strom Thurmond’s switch to Republican–certainly had a lot to do with resentment of desegregation but it was just as much about abortion and fear of liberal secularism. Carter, a businessman as well as a born again Christian, was the embodiment of the Dem version of this trend.

        1. Olga

          Was it really “categorically more important,” or were those people manipulated into believing that social conservatism was more important? If one believes Thomas Frank in What Happened to Kansas, repubs in the South (mainly) focused on and promoted soc-con issues as an easy way to distract people from destructive econ policies. It worked wonders – as we know.

      3. nonclassical

        “Following the massive bankruptcy of the Penn Central in 1970, Congress created Amtrak to take over the failed company’s intercity passenger train service, under the Rail Passenger Service Act. Congress passed the Regional Rail Reorganization Act of 1973 (the “3R Act”) to salvage viable freight operations from Penn Central and other failing rail lines in the northeast, mid-Atlantic and midwestern regions, through the creation of Conrail. Conrail began operations in 1976.”

      4. sgt_doom

        I believe he also deregulated the natural gas industry (recall that the head of the National Geological Survey, a scientist and non-political appointee, was asked by a reporter if there was a natural gas shortage, and he answered in the negative and was shortly fired by Carter), also killed the federal anti-usury federal regulations which allowed for the Reagan administration to bring those ARM, or Adjustable Rate Mortgages, into law.

        1. nonclassical

          “President Carter hinted broadly today (1977) that he would keep his campaign. promise to ask Congress to end Federal regulation of some natural gas prices but would also take steps to prevent gas producers from making “unwarranted profits.”

          The President did not specifically mention a tax on gas producers in discussing the energy policy his Administration was shaping, but it was plainly implied by his remarks at a news conference. “I am going to make sure that oil and natural gas companies and others that produce don’t derive unwarranted profits when we cut back on consumption and when we encourage production,” Mr. Carter said.

          Mr. Carter’s advisers are known to feel that deregulation would not yield big increases in natural gas supplies and that producers should not be permitted to reap large profits from a shortage that is expected to persist.

          Well‐placed sources said that a tax could be imposed on windfall profits of producers (as former President Ford recommended when he sought to end price controls for oil) or on gas production. Either way, the end result of deregulation combined with a tax would be higher prices to consumers but diversion of some part of the extra revenue from producers to the Federal Treasury.”

          http://www.nytimes.com/1977/02/09/archives/carter-hints-deregulation-of-gas-plus-ban-on-unwarranted-profits.html

  2. nonclassical

    ..libertarian (Koch Bros.) propaganda aside, “neoliberalism”, defined:

    “So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.

    Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

    Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

    We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.

    Never mind structural unemployment: if you don’t have a job it’s because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you’re feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it’s your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.

    The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

    In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

    With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal international”: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

    As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency.”

    https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

  3. UserFriendly

    How much the country has suffered from how wrong they were.

    Understatement of the year.
    Quick, let’s go repeat the race riots of the early 1900’s so everyone is too busy blaming each other while the oligarchy laughs all the way to the bank.
    Nothing will ever change, part of me is praying the idiots from versaille on the potomac manage to get us nuked and put us out of our misery.

    1. Marco

      Is it a stretch to say that the neoliberal takeover of Team Blue described above would not have been possible without the corrosive influence of identity politics? And where youthful energy only seems to be invoked when protesting confederate flags and transgender bathrooms. I long for the day when we see violent protests outside Apple stores and on the main strips of our nations most exclusive shopping districts…or “private” streets in SF’s Presidio where wealthy and feckless Democratic politicians once resided.

      1. makedoanmend

        Should “identity politics” be framed solely in terms of liberalism or liberalist viewpoints? (I personally care not as I don’t tend towards liberalism nor towards of the attitudes of the current bunch who deem to call themselves conservatives – their own conservatism, in my view, simply meaning to conserve their wealth and priviledge to the cost of society, culture and the environment.)

        Those who wish to flaunt their convictions in the face of anti-confederates or to overtly display their dislike of transgender facilities surely want to become an identifiable group in and of themselves.

        Identity politics, I would contend, is in the eye of the beholder.

      2. NotTimothyGeithner

        I would call it a perversion of identity politics. Feminism has traditionally been about an equality where people especially women are free from having to make choices to submit (ex. Tolerating sexual harassment, not being able to leave a partner). The neoliberals have twisted feminism into living vicariously through Hillary and so forth.

        Nazis marching through the streets and the need for safe places for the Transgender (Nazis are on the march) are problems and need to be addressed.

        The neoliberals themselves used Satruday’s event in CVille asan opportunity to attack lefty types anyway. The energy on display scares them.

        1. makedoanmend

          That’s an interesting take about identity politics morphing.

          What you say certainly rings true to my view of events, especially the forces that tend to shape the mediums and messages that are allowed to emerge within very strict definitional boundaries at any given point in time.

          It’s rather strange how the message flowing currently tends to blame liberals for everything these days whilst not that long ago everything was the fault of Bush mark II and his buddies. Meanwhile the poor get poorer and the wealthy get wealthier.

          Funny how that works.

        2. Enquiring Mind

          Equality of opportunity seemed to be a mask for the intended equality of result. The former is defensible, at least to most reasonable humans. The latter is not.
          Much of the Dem and neolib program seems designed to convince people to embrace counterfactuals, real or imagined.
          Until the Dems can rid themselves of that fanciful thinking then they will just be Rep lite with the attendant malignancy.

          1. jrs

            noone seriously almost noone (but I am sure you can find some political junky somewhere who does) argues equality of result. What people argue for is that making sure everyone has their basic needs met is the ONLY way to ensure anything even approaching equality of opportunity. Otherwise it’s kind of a sham. Because see in real life adults even if we were to accept they “get what they deserve” in terms of results, are also often parents etc.. and their kids will not have opportunities if their parents can’t even meet their basic needs.

          2. bdy

            I side with the equal outcomes crowd, and mistrust “equal opportunity” as part and parcel to the meritocracy regime. Opportunity doesn’t mean much when I’m living paycheck to paycheck, or facing the financial ruin that will be guaranteed should I ever have to watch a family member die slowly.

            I much prefer a boring job I can count on with a decent pension, good medicine, healthy food, and some time to keep house and have fun with my kids without having to borrow. Reasonable expectations, and nobody gets them. Nobody is good enough for even those — the equal results that some Dems used to stand for. Hello concrete material benefits. Unless I misunderstand your comment, being handed them freely is apparently not defensible to most reasonable humans.

            Paraphrasing Comrade Detective on opportunity:

            “He went to America and they made him start his own business. A car wash. That’s right. Capitalists are so lazy they can’t even wash their own cars. They make the poor do it for them.”

            “Opportunity” worships small businesspeople with little regard to their precarious positions relative to market vagaries and private debt. Without the safety net of a rich dad or a welfare state, to exercise opportunity is to dangle over the void of ruin. We may trust that our grips are strong and secure, but have no say in maintaining the rope.

  4. bwilli123

    “..In 1974, young liberals did not perceive financial power as a threat, having grown up in a world where banks and big business were largely kept under control. It was the government—through Vietnam, Nixon, and executive power—that organized the political spectrum. By 1975, liberalism meant, as Carr put it, “where you were on issues like civil rights and the war in Vietnam.” With the exception of a few new members, like Miller and Waxman, suspicion of finance as a part of liberalism had vanished.”

    https://www.theatlantic.com/politics/archive/2016/10/how-democrats-killed-their-populist-soul/504710/

    1. JBird

      Rather like with vaccines. My parents, grandparents, older teachers and acquaintances all had deep experiences with infectious diseases. We you see someone crippled from polio, or some childhood disease the possibility that the vaccines used today might somehow maybe cause a problem is craziness. The world that they grew up was so full of fear and suffering that the risks are unimportant.

      Just like my parents, grand relatives, and great grand relatives all suffered directly from or raised directly under those who lived through the Great Depression who lost everything because of it. The idea that government regulations especially of the banks and the stock market would be crazy talk also. The that people were saved from actual starvation because of government programs also made the government important. Or the fact that unregulated local monopolies charged too much for electricity and telephone service until they became regulated in the the Depression. (Sound familiar?) All of that would have made neoliberal policies of today also crazy talk.

      It would not matter what their social or political views but what they lived through. But most of them are dead and their ignorant descendants are either learning or are going to learn from experience. And all they had to do was cracked open some books or ask why the programs and regulations and unions and socialism had been created in a poorer more conservative society in the first place. Our ancestors weren’t stupid.

      1. Amfortas the Hippie

        aye. I seem to be alone in my cohort in that my grandparents(and that whole generation in my family, and indeed, some surviving members of the generation before(my great grandma was a flapper,lol)) they told stories…and I , strange child that I was, listened…and remembered.
        learning a lifelong trade in the CCC, then filling it out in WW2(all the while, growing and cultivating a sympathy for one’s fellow Americans, and therefore, a belonging), and then being able to own a home…even land…and afford a bunch of kids…
        and other stories about being on the farm in the 30’s and hearing of the “depression” on the radio, and wondering what it was all about…
        These things stuck with me, and I feel fortunate for it.
        I don’t remember any of my generation speaking of these things….or comprehending when I would do so.
        and of course, none of that is in the history textbooks my kids bring home, nor in the woefully…almost hilariously…incompetent “econ” text book that they use for the semester in one’s senior year.
        I have made certain that my boys, and all their buddies…hear those stories(what are campfires for, after all?)

    2. Enquiring Mind

      Suspicion of finance should be a daily activity based on the money in politics and the lack of accountability. The benefits to society as a whole from what may be called legitimate finance (capital raising, allocation, transaction media, investment, etc) gets undermined by the illegitimate side.

      You see the headlines and themes in history books, from the Robber Barons on down through all those Masters of the Universe from the 1980s (seems kinda quaint, now, Milken, Boesky and such) to the TBTF group that holds the country hostage. Their motto may as well be: “Don’t regulate us, we’ll go bust and kill the host. Instead, just look away. Oh, a shiny object.”

      1. nonclassical

        Gretchen Morgenson, NY Times Sunday business editor documented Wall Street “speculation” driving
        gas prices from $1:00 per gallon, 2001 end of clinton, to nearly $4.00 per gallon over first 4 years of “W” ad. They sold off – crashed the market, September 2004, prior “W” re-election…could have – should have cost republicans 2004 election cycle…

        Wall $treet owned nearly 50% of all world oil futures, were not “end users”, and were selling futures (time dated) back and forth to one another to manipulate prices, in return to “pork bellies” manipulation of commodities, 1800’s. Commodities remain manipulated…(check out food prices today, around world)

  5. Livius Drusus

    Re: nepotism in trade unions, I find it hypocritical that such practices were seen as such a problem while nepotism runs rampant in the white-collar world as well. Chelsea Clinton anyone? The Trumps? The Kennedys? The Daleys? Sofia Coppola?

    On a smaller scale I have seen plenty of law firms hire the children of partners right out of law school. I have stories of business owners giving their children jobs within their companies. I honestly don’t have a problem with this. Who doesn’t want to help their friends and relatives? That is part of living in a free, organic, human society. It comes natural to us. But I find the class-based double standard infuriating.

    When working-class people seek to help friends and family it is nepotism and corruption. When affluent people do it we call it “networking.” The same thing can be said for the big city machines. Yes they were corrupt but were they any more corrupt than the incestuous relationship between the modern Democratic Party, Wall Street and Silicon Valley? What about the revolving door of politicians and bureaucrats who move from government “service” to lucrative corporate jobs and lobbying gigs?

    People sense that this double standard exists and it probably helps to explain why there has been a recent populist backlash against the elites. When you have an overclass that preaches meritocracy but practices nepotism it makes people angry. I prefer the honesty of the old aristocracy that was blatant in their favoritism. Unfortunately, instead of abandoning meritocracy as an unattainable ideal that would probably lead to a dystopia if it could be implemented (see Michael Young’s satirical book The Rise of the Meritocracy that popularized the term but was sadly taken seriously and not as satire by most people), most Americans seem to double down on the idea. I have no problem with patricians as long as they support policies that I like. FDR was a patrician and I would take the British One Nation Conservatives over most liberal, social democratic and labor parties today, to say nothing of parties on the right.

    A final word on meritocracy. Chris Dillow has written a number of good blog posts critiquing the concept. Here is a link to one such post: http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2016/06/beyond-meritocracy.html

    1. Yves Smith Post author

      Similarly, sons of Wall Street firm partners were similarly guaranteed partnerships unless they were terrible. I was only at Goldman a short time and even in my era, 2 men in the only 250 person Investment Banking division were sons of management committee members. Both became partners. It is seldom mentioned that Steve Mnuchin is the son of another management committee member, Bob Mnuchin.

    2. John Wright

      I believe a good example of this is the job seeking email of UC Berkeley ( and Democratic Party aligned) economist Brad DeLong to Neera Tanden at the Center for American Progress Democratic think tank.

      He’s worried about “someone with better connections” getting chosen over his son.

      I’d suspect that DeLong has better connections than most of America, but he is still looking for an edge.

      ***********************************
      From:brad.delong@gmail.com
      To: ntanden@americanprogress.org
      CC: john.podesta@gmail.com
      Date: 2015-07-31 15:42
      Subject: So my 25-year-old Michael DeLong has applied for a Firearms Safety Policy job at CAP…
      Dear Neera (and John)—
      So my 25-year-old Michael DeLong has applied for a Firearms Safety Policy job at CAP…
      I think he is a very, very strong candidate on the merits, given what he has been doing in Portland at
      Ceasefire Oregon in the three years since he graduated from Reed College, and how effective he has
      been there. But I find myself somewhat anxious the somebody already in Washington and with better
      connections might crowd him out…
      May I beg you to reassure me?
      Yours,
      Brad DeLong

      J. Bradford DeLong
      http://equitablegrowth.org/blog
      http:delong.typepad.com

    3. Michael Fiorillo

      Indeed, it was both a hoot and source of unending exasperation to me that many liberal/ Left academics of that era decried the racism of unions (usually in the building trades, which did have extensive father-son practices) that at their worst were far more integrated than the academic departments from which the criticism arose.

  6. Jeff S.

    One thing that’s overlooked is the bitterness people like Hart and Jerry Brown felt towards non-UAW unions because of Vietnam. Labor was a big booster of the war, and of Humphrey against McCarthy and RFK, and of undermining McGovern. This bitterness carried over to domestic policy, unfortunately.

    1. Amfortas the Hippie

      I recently went on a sort of minor research frenzy into that very era(beginning with :”one bright shining moment”).
      a case in point was LBJ. hard assed good man, willing to fight for all manner of good things…but=== Viet Nam….Domino Theory.
      Seems that “liberals”/”Progressives”/”whatever” have always screwed themselves with a disconnect between foreign policy and domestic….and, too often in the past, being willing to leave out a large portion of their own folks(women, POC, etc).
      After delving in everything from Jerry Rubin’s letters to the utterances of SDS and the damned Powell Memo, it seems obvious that the Non-elite need to get together, and on a global scale. Capital, after all, has escaped the Nationalist fence.
      How that could ever happen, I don’t know.
      Most non-teabilly folks I know at the moment are still arguing over whether or not Hillary is “progressive” and/or was unjustly denied her crown.

      1. Olga

        Didn’t Marx already advocate that? Except, he called them proletariat (not the modern “non-elite”).

      2. Carolinian

        While you call yourself a hippie I think you’d be hard pressed to find many young people during the 1960s who would call Lyndon Johnson a “good man.” The young Republican types of course hated him while the lefties were focused on Vietnam. Johnson did push through the civil rights laws but it would still take decades of conflict for the races to approach anything like comity. Most of his Great Society programs flopped or were subverted.

        Vietnam was an act of hubris that changed the country and will be Johnson’s legacy far more than civil rights. As Robert Caro makes clear in his books LBJ was a deeply flawed character and his insecurities led to mistakes and deceptions that we may never get over. The current drive to rehabilitate Johnson’s image likely show the desire among current Dems to repeat those mistakes and deceptions.

        1. OpenThePodBayDoorsHAL

          How I wish “Vietnam changed the country” in any but temporary ways, today we have Vietnam X 100 and everybody either just ignores or profits. Back in the day pictures of naked napalmed girls running in fear from American Death From Above struck a cord, today “swipe right” seems to sooth any remaining vestiges of morality and humanity and conscience

          1. nonclassical

            …the difference between General Westmoreland policies in Vietnam war and subsequent General Creighton Abrams could not be more stark:

            “Thunderbolt: General Creighton Abrams and the Army of His Times”, by Lewis Sorley:

            “Lewis Sorley is one of the better writers of military history and one of my favorite authors on the Vietnam War. In line with this book, “Thunderbolt: General Creighton Abrams and the Army of His Time”, he is also the author of “Vietnam Chronicles: The Abrams Tapes, 1968-1972 (Modern Southeast Asia Series).” Another book by the author that is well worth the read is “Westmoreland: The General Who Lost Vietnam,” which is almost a word for word rebuttal of General Westmoreland’s Autobiography “A Soldier Reports.”

        2. Amfortas the Hippie

          lol.
          I knew I’d get called on that bit.
          I adopted the moniker after the first 20 years of being called that.
          May as well own it…make it mine.
          As for LBJ…I live up the road(that he got paved, btw) from his ranch. His history is all over the place around here.
          as I said, the war(and the imperialism it was embedded in) proved inimical to the domestic things he was, at the very least, trying to do.
          The museum there in Stonewall, paints a rather rosy picture, of course…but there’s a lot to like about the guy, imo. I suppose Washington was as damaging/distracting as the war/imperialism.
          One must sift the wheat from the chaff. Jefferson owned People. and Gandhi slept naked with young girls to test his celibacy.

          even with all the bad, I’d rather have an LBJ than the crop of “democrats” we enjoy, today.

  7. jackiebass

    This seems to be the MO for policies like neoliberalism.There is a planning stage followed by implementation. So change isn’t noticed by ordinary people, the change is implemented over a long period of time.A big part of selling these kind of changes is to use a propaganda campaign over a long time. The anti union propaganda, government can’t do anything right are two examples. The newest target ,education, is going full speed ahead. The propaganda against schools and teachers has been going on for decades. I believe the campaign against schools is ending up harder to win. Part of the reason is the group targeted is better educated than the general public. Educators don’t simply accept something without evidence. They will and are fighting back. Republicans won’t change even if the evidence contradicts their beliefs. What we need is reform in the democrat party. The Clinton democrats need to be purged from the party. Send them back to the republican party where they belong. They aren’t traditional democrats. I see a glimmer of hope, but the base needs to continue to push back against the Wall Street democrats that control the party. For short term gain they destroyed the democrat party, making it easy for republicans to win elections.

    1. nonclassical

      ..clinton ad. intended move goalposts to “center”, to co-opt – push republicans further right…to economic fundamentalism. (see today-trump)

      Our Poly Sci Prof, Eugene Peterson, PhD, Oberlin, was inside clinton ad.

      However, Koch Bros. – libertarian think tank propagandists intend scapegoat clinton for economic deregulation. Even NAFTA was not clinton program, as documented here, prior clinton ad.:

      (George HW Bush signs NAFTA)

      https://www.youtube.com/watch?v=mMo-Kvj0bjE

    2. Olga

      Interestingly, some of the biggest opponents of charter schools and education privatisation in Texas are the conservative rural legislators. They seem to have understood that their districts wld be first to lose their schools.

  8. Disturbed Voter

    But for much of the initial neoliberal ascendency, the Cold War was still on. How much of this was an intelligence agency/CFA plot to control the underlying culture? And post Cold War … “exceptionalism” has led us into one imperial misadventure after another. To what extent are all major political candidates vetted by the intelligence agencies?

  9. allan

    Cheney said … “I saw how difficult it is to have government programs well designed to achieve any significant results …. There are all too often unanticipated consequences”

    There are millions of people living (and dead) in the Middle East
    who would agree with these words of wisdom from Mr. They Will Greet Us As Liberators.

  10. MichaelSF

    I just finished Frank’s “Listen Liberal” and he goes into great detail about the Clintons and others in that time deliberately moving to the right though campaigning somewhat to the left (at times). His thoughts on professionalism are interesting, and he demonstrates what a tight-knit/incestuous group has held power in the last couple of Democratic administrations.

    I’m about half way through his “What’s the Matter with Kansas” book and it too is proving very interesting.

  11. Sound of the Suburbs

    Neo-liberalism, a debt fuelled disaster.

    Neoclassical economics doesn’t look at private debt.

    The UK and US looked economically successful as the private debt built up out of sight.

    The US:
    https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.52.41.png

    The UK:
    https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.53.09.png

    You can only saturate an economy in debt once.

    Well the US has done it twice and it took them along time to forget the Great Depression before they did it again.

    It relied on the thing it hid (debt) to work and now we’re full up on debt.

    2008 is when the debt that was hidden became visible.
    Debt saturation, the Minsky Moment.

    1. Sound of the Suburbs

      The 1920s saw productivity reach levels where supply exceeded demand and extensive advertising was needed to shift the excess.

      Businesses didn’t want to increase wages and they used credit to maintain demand. They didn’t understand how debt based consumption maxes. out and debt fuelled speculation leads to Minsky Moments.

      Keynesian redistributive capitalism ushered in the era of the consumer society and provided a sustainable system not maintained with debt.

      Rinse and repeat.

      1. nonclassical

        …in today’s business refusal to increase wages-while opting for credit, retirement benefits were offered rather than wage raises…retirement benefits now being eviscerated in courts.

        Obama signed legislation considering retirement benefits NOT “guaranteed” (in budget bill), having guaranteed Wall $treet retirement benefits, bonuses, and perpetrated “quantitative easing” of $40-$80 billion per month over 7 years; NOT coincidentally number of years-statute of limitations for much fraud perpetrated by Wall $treet CDO’s-CDS.

  12. John k

    Dems don’t have a love affair with neolib. They love donors money, and donors want neolib, and that’s that.
    Pay em to love social benefits, and they will turn on a dime and love that.

    Money talks, pols of both parties listen very carefully to what money says.

  13. RBHoughton

    What an appalling example of Judicial irresponsibility that Lewis Powell was! He’s supposed to sit above society and be exclusive of it. It used to be the case that the community of judges forced appropriate standards on all its members but apparently not any more since at least 1971.

    Congratulations to NC and YS for publishing Econned and warning us of the real dangers.

    The whole article should be included in Economic History courses – to be learned by heart.

    1. JBird

      What you say about Justice Powell has some truth. I would note that the times were very tumultuous. A war, social movements, riots, assassinations, a very fluid time.

      He was worried that the social and economic left would overwhelm society which might have been a bad thing. It is obvious now that there was a conservative social and economic backlash already starting. The rich conservative elites had been funding it since the 50s. But if that was not obvious, you could make the argument that he had a responsibility to speak out. The Bill of Rights especially the First Amendment applies to everyone.

  14. Claudia

    We might all decry bureaucracy without reason and red-tape without end. But I was disappointed that this article forgot to mention the effects of personal ambition and general mercilessness that have taken root in the Democractic party.

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