Tuesday, April 11, 2017

Neoliberalism in the Driver's Seat: Trump and Ryan's Ruling-Class Schemes

House Speaker Paul Ryan looks on as President Donald Trump addresses a joint session of Congress on Capitol Hill in Washington, February 28, 2017. (Photo: Doug Mills / The New York Times)
By C.J. Polychroniou, Truthout | Interview
Donald Trump ran a campaign to "make America great again," promising the creation of high-paid manufacturing jobs and the restoration of the middle class. Yet, his economic policies will most likely make things worse for average American workers and deal a further blow to the environment, says economist Michael Meeropol, an NPR commentator and author of Surrender: How the Clinton Administration Completed the Reagan Revolution. Michael Meeropol is the oldest son of Julius and Ethel Rosenberg.
C.J. Polychroniou: Donald Trump's economic policies are not simply controversial; they constitute a neoliberal nightmare. His policies revolve mostly around corporate tax cuts, tax cuts for people with high incomes and investments, deregulation and selective protectionism. Assuming the Trump administration can succeed with these objectives, what, in your view, would be the most likely effects of these policies on the US economy?
Michael Meeropol: It is essential to separate Trump (the man) from the policies proposed by the Trump administration. Trump, the man, displays "bright shiny objects" that unfortunately divert us from the substance of the actual policies.... The national media and too many of the opposition are diverted by his outrageous lies, his grandiose promises, his bombast and his dangerous authoritarianism. These are the "bright shiny objects" but they have almost nothing to do with the substance of [his] proposed policies.
Your question brings focus where it should be -- the neoliberal content of his administration's proposals. With the possible exception of the selective protectionism he promised during the campaign, [his] economic policy proposals are extensions of traditional neoliberal policies that date back to Ronald Reagan. These policies were enabled by Bill Clinton (see my book Surrender and Bob Pollin's book Contours of Descent), expanded by George W. Bush and not forcefully countered by Barack Obama. The failure to include a public option in the Affordable Care Act is one glaring example.
The neoliberal content of the Trump administration's policies comes from Paul Ryan, the Club for Growth, the Heritage Foundation, the Chamber of Commerce ... this is the policy-planning apparatus of the American ruling class.
(Anyone who doubts what I just said, check out the Who Rules America? website. G. William Domhoff has been documenting who rules America since the late 1960s. Here is a recent piece with relevance today.)
In a recent Washington Post article, the first round of proposed budget shifting by the Trump administration is detailed -- a massive transfer of discretionary budget spending to defense and away from everything else. This is more extreme than the 1981 Reagan budget proposals. The failed "repeal and replace" for the Affordable Care Act was similar to efforts proposed in the past -- partial privatization of Social Security -- replacing the guarantees of Medicare with vouchers (called "premium support" in one of the "Ryan budgets" proposed during the Obama Administration). "Welfare reform" signed into law by Bill Clinton turned the old AFDC [Aid to Families with Dependent Children] program into a set of fixed block grants to the states. Changing Medicaid from a guarantee to a state-administered stingy block grant as in the failed Ryan "Trumpcare" proposal would have a similar impact -- reducing enrollment in one more means-tested entitlement program. All of these changes were efforts to dismantle the set of policies associated with the New Deal and Great Society.
Should this new set of neoliberal proposals be adopted, there is no way they will have a positive macroeconomic impact. Forty years of neoliberal policies since 1980 show that. But in terms of income and wealth for the top 1 percent, neoliberalism was a dramatic success. The well-known Saez-Piketty diagrams plotting shares of the top 10 percent and 1 percent of the income distribution show that reduced inequality (the top 1 percent [of people in the US] had 20 percent of income in 1929 and 8 percent in 1979) was successfully reversed in the neoliberal heyday: The [top] 1 percent's share climbed to 18 percent by 2007. In other words, it didn't matter that the economy as a whole did worse -- the "most important" people did better.
Concerning today's economy, so long as the political structures that support neoliberal policies are able to withstand the assaults of an outraged population -- here I am including both the Sanders campaign and many of Trump's (duped) supporters -- the policies will continue because they do keep large flows of income going to the top 1 percent and power firmly in the hands of corporate decision makers and their political enablers.

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