Saturday, July 30, 2016

The diminishing returns of neoliberalism and the rise of The Green Party

A few days ago, I happened upon this meme:

The obvious implication of conservative economic policy is that it tends to make more people broke and a tiny fraction of them very, very rich. We are a country steeped in extreme inequality as a result of our hard turn to the right since the 1980s. To get an idea of just how bad it is here, watch this video:

There are some who want to blame the conditions we contend with today upon one party or one person. The effort expended to get here was tremendous, very well organized and assembled rather sneakily. Another word for conservative economic policy is "neoliberalism". It's not like they were openly selling neoliberalism as a philosophy. Over time, conservatives, also known as neoliberals, found ways to insert their way of thinking into college courses on economics. Although they tend to justify this philosophy on ideological grounds, there is very little empirical evidence to show that neoliberalism actually works to grow economies, in the long run.

To put it very simply, neoliberalism was adopted in American economics not because there was any merit to it. It was adopted because politicians blindly followed the money rather than using their sense of discernment to see if it would actually work. Really, they've been telling us that neoliberalism works for at least 30 years and that we just need to give it more time so that everyone can see the benefits. But anyone familiar with the business end of it knows that all it really does is generate vast asset bubbles. Asset bubbles are wonderful "accidents" that allow for massive and rapid transfers of wealth, if you happen to have the knowledge to be in the right place at the right time. Neoliberalism has given us the bubble economy we live in today.

I believe that neoliberalism has brought us to the place where we are right now. Neoliberalism permits multinational companies to shift costs and labor around the world while withholding the gains in productivity from the people who do the work. But when you take money away from the people you serve, essentially bankrupting your customers, you have to look somewhere else for money. If you're a business, you look to the government. If you're a politician, you spend a lot of time calling those people with the money.

It's kind of like this. We went from a nation of industrialists who made money building things here, to a nation ruled by industrialists who build things in other countries and try to sell them here, to people with no money. To pump their profits, they've engineered wage stagnation into the economy and force people to buy things on time with credit and debt.

Over time, dependence on big money in politics becomes more than a habit, it becomes a necessity. Worse, politicians begin to look at the money behind a bill or even a trade agreement before they look at the merits of whatever it is they want to pass off as rational public policy. This explains why people like Barack Obama, Hillary Clinton and even Tim Kaine will hide their support of the TPP until the election is over. Then when the election is over, they will dive head over heels in support of the TPP. There is a huge amount of money riding on that agreement and they want to be sure that the Democratic Party gets their share of it, progressives be damned.

The folks at Naked Capitalism have noticed this drive for the money in spades. For enlightenment, they have republished an article by Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. Hudson makes the following observation about the Democrats and the southern states and Bernie Sanders:
The DNC designated these “neglected” states to come first in the presidential primaries. They were the ones that Hillary won. Sanders won most of the swing states and those likely to vote Democratic. That made him the party’s strongest nominee – obliging the DNC to maneuver to sideline him. His criticism of big donors and Citizens United threatens to dry up the source of funding not only for Hillary but also for the DNC. They are going after the money – whose chief providers are Wall Street, neoliberal corporatists and New Cold War neocons.
They sought to deny Sanders not for his progressive views, but for his severe criticism of big money in politics. Senior Democrats are scared out of their minds that with Sanders, the big money will dry up. During this election, those big donors sort of went into hiding until Sanders quit running as a Democrat. The day after he named Hillary as nominee at the convention, he returned to his independent status.

While Sanders was proving that a run for president was possible without big money donors, the Democrats were running scared, uncertain of their future. Establishment resistance to populism belies their claimed support of economic and social justice. Sanders was trying to save the Democratic Party, but they would have none of that. Hudson in his article, goes on to make the following point: "The solution is not to save the Democratic Party, but to replace it."

He's not the only one. In Hillary’s Economic Justice Incompatible with Her Corporate Relationships, Bill Curry, former adviser to the Clinton Administration is seen on Real News video pointing out the following:
“In response to Hillary Clinton’s acceptance speech, Bill Curry, former counselor to Bill Clinton’s White House, says that progressives must focus on building an independent political movement.” ~ The Real News
This is the second post I've seen in the same day suggesting that the goal is not to save the Democratic Party, but to replace it. I'm sure there are more, but I believe that the rapid rise of interest in the Green Party is a sign of a growing consensus that the Democratic Party is no longer the progressive party that it once was. We must acknowledge that progressives must replace it with a truly progressive and independent party that does not accept large donations from wealthy donors.

Over the last three decades, we have witnessed the consolidation of wealth to the point that, according to Harvard professor and former presidential candidate, Larry Lessig, a mere 132 Americans financed 60% of the SuperPAC spending in 2012. During this same time, we went from a nation that builds the things we buy to a nation ruled by oligarchs who make most of their money by rent seeking. The TPP is a trade agreement with an aim to maximize rent seeking. Isn't it a nice coincidence that a recent report shows that 74% of billionaire wealth accrues from rent seeking?

When we let the wealthy put their money in politics, we allow them to write the rules and as we have seen, that has not worked out so well for the rest of us. If the Democrats are not willing to represent us, then they must be replaced by a party that is willing to represent progressives and do so, honestly. That party is The Green Party. I've seen their platform and by my reading, they are a political party of economic, social and environmental justice.

It's time to replace the Democrats with the Green Party. Unless Democrats decide to change, I just can't see any other way to restore our democracy.

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