How Neoliberalism destroyed the Democratic Party

In politics and history, past is prologue. To quote Mark Twain “History doesn’t repeat itself, but it rhymes. As the Democratic Primary continues to heat up, looking at the last three Democratic Presidents is instructive on how we got to this point in US history, and what may happen if another Democrat is elected.

Put simply, the last three Democratic Presidents turned their backs on the people they were supposed to champion. Instead they became proselytizers in the cult of neoliberalism-an ideology so bereft of popular supporter it has led to the rise of populism worldwide. It all started in Iowa with a Peanut farmer running for the Presidency in 1975. This is the story of how Neoliberalism took over and defined the Democratic Party.

Jimmy Carter

Jimmy Carter campaigned as a conservative outright, stating he was more similar to Dwight Eisenhower than a “New Dealer”. In his stump speech and ads he stated “I believe in balanced budgets. I believe in eliminating programs that have outlived their usefulness. I believe when there is a choice to be made between government and private industry, I’d go with the private industry. This is a kind of concept that is generally considered to be conservative.” Carter often described himself as a fiscal conservative and campaigned on balancing the federal budget. Carter was also one of the first candidates to actively campaign on his religiosity as a major selling point.

Carter supported Indonesian as a Cold War ally against the Soviets, giving them weapons and training in 1977. (A continuation of Republican Gerald Ford’s policy). They committed a genocide in East Timor which left 80,000 slaughtered. In 1979 Carter armed the Mujahideen to fight the Soviets in Afghanistan, a group which later led to the creation of Al Qeada. In doing this, the US gave money and training directly to Islamic fundamentalist terrorists including Osama Bin Laden.

Carter had a massive Democratic Congressional majority, but completely squandered it. Carter had a Democratic Congress that had a filibuster proof majority and nearly 70 percent of the seats in the House of Representatives. Plans were being drafted in Congress to do major progressive action. Bill were written to create a National Health Insurance system, a Negative Income Tax, Statehood for Washington DC, a Federal Jobs Guarantee, bans on assault weapons, a form of universal Basic Income, massive infrastructure programs, progressive tax brackets for capital gains and dozens of other left wing ideas still being fought for today. None of these were passed. Instead, Carter began the Democratic Party’s embrace of neoliberal economics and neoconservative foreign policy.

Jimmy Carter’s main economic drive was deregulation. He deregulated air travel, commercial trucking, rail shipping, beer manufacturing, banking and the oil industry. The main economic stimulus he pursued as President was a 16.7 billion dollar tax cut in 1977. He ended an attempt by the Congressional Black Caucus to pass a version of a federal jobs guarantee in 1978. He sided with the economic classicists over Keynesians by prioritizing addressing inflation over unemployment. To this end he enacted an austerity program via executive order in 1979. In terms of programs, Carter adopted the generally conservative position of block granting money to states whenever possible.

In 1977 Carter enacted Social Security cuts and unveiled a plan that would have gutted welfare similar to the reforms later enacted by Bill Clinton. The bill failed in Congress. He increased defense spending every year he was in office Signed into law the 1978 Civil Service Reform Act which severely limited collective bargaining rights. He also favored the anti abortion Hyde Amendment.

The fallout: Carter cost Democrats 15 Senate seats, 47 House seats and 10 governorships. It led to the election of Ronald Reagan.

Bill Clinton

Under Bill Clinton domestic policy took a rightward turn, despite the election of a Democratic President after 12 years of GOP rule. The prison population doubled in a decade because of the 1994 crime bill, Gay Marriage was banned at the federal level, a systemic gutting of welfare took place and the biggest media consolidation in history took place due to a 1996 telecommunications law. The Clinton administration marked the first cuts to Medicare by a Democratic President. Death Penalty cases rose 40%.

Economically neoliberalism previously championed by conservatives was pushed by Clinton. Clinton signed the largest Wall St. tax break in history in 1997 and followed it up with massive deregulation of the financial services industry in 1999. New multinational structures were put in place to spread neoliberalism worldwide through the creation of the WTO and passage of NAFTA. Through signing the Religious Freedom Restoration Act, Clinton gave corporations legal 1st amendment protections, another tool that allowed for corporate America to exert political influence. He signed a public works law in 1998 that prevented thousands of pieces of art and media from entering the public domain. In 1996, the Clinton administration quietly conducted the first. bailout of the modern era for the Savings and Loans industry. Clinton kept Reaganite Alan Greenspan as chairman of the Federal Reserve and had supply siders Larry Summers and Robert Rubin as his Treasury Secretaries.

Troubling foreign policy decisions were made that bolstered neoconservatives during the Clinton era. The first private military contractors were legally allowed to exist under the Clinton administration, sanctions put on Iraq left 500,000 dead according to UN reports, which Sec. of State Madeline Albright said was “worth it”. There were a total of 6 foreign interventions, and plans to bomb Iraq were drawn up in 1998,

The fallout: Clinton lost the House for Democrats for the first time in 40 years. He cost Democrats 10 Senate seats, 60 House seats and 11 governorships. It led to the election of George W. Bush.

Barack Obama

In 2009, the time was right for a liberal restoration. Democrats had never had more political power. In terms of sheer numbers, the Congressional majorities were as robust as they were in the 1960’s, and only enhanced by the annihilation of the Dixiecrats. Republicans were blamed for the worst recession in 80 years and George W, Bush had the lowest approval rating of any President in history. There was a popular liberal mandate. Unfortunately President Obama continued the trajectory started by Carter and Clinton.

Obama largely continued the policies of the man he most explicitly ran against in 2008-George W. Bush. Under Obama, 95% of the Bush tax cuts were made permanent. Obama adopted Bush’s troop surge strategy in Afghanistan, pushed to stay in Iraq even longer than Bush’s timetable, and relied on military tribunals for terror suspects. He continued and expanded the Bush administration’s extrajudicial killings of terror suspects, renewed the Patriot Act, and expanded the number of countries being bombed under the AUMF to seven. Like Bush before him, Obama used the Espionage Act of 1917 to silence whistleblowers, but Obama used the Act more than all other Presidents combined. While keen to prosecute whistleblowers, Obama’s DOJ didn’t hold anyone involved with torture or the financial crash legally accountable.

Obama continued Bush’s bailout of financial institutions, and even kept many Bush officials on in his administration. None of the Bush holdovers were worthy of the titles they held, and included the likes of Stanley McChrystal, James Comey, Ray LaHood and Robert Gates. Half of the holdovers would publicly criticize Obama after leaving office.

Obama did more than just continue the policies of George W. Bush. He went much further in some cases, like when he ordered the assassinations of an American citizen found not guilty of any crime, set records for deportations, militarized the border, and offered cuts to Medicare and Social Security to Congressional Republicans. Obama’s signature achievement was the conservative Heritage Foundation’s health care reform initiative. It solidified the private system, did little to reign in costs, and managed to bring in many new customers to the industry. Even Obama’s Supreme Court picks were to the right of those they replaced, (Sotomayor was even considered by Bush).

Economically Obama continued the neoliberal program enthusiastically adopted by Bill Clinton. He proposed a trade agreement that would have given record windfalls to corporations and exempt them from vast swaths of international regulation. He blocked legislation that would have allowed for importation of prescription drugs, and weakened the funding mechanism of Social Security and Medicare from 2009 to 2014. Over the course of his Presidency he enacted 1.6 trillion dollars in stimulus spending that was essentially reflected a supply side philosophy 50% consisted of tax cuts 26% consisted of corporate bailouts while just 24% was spent on Keynesian public works projects.

The fallout: Obama cost the party 12 Senate seats, 63 House seats, and 16 Governorships. It led to the election of Donald Trump.

Unless a truly transformational candidate is selected, we have a good idea of what happens if an establishment Democratic candidate wins the Presidency based on this history. We can expect this future President to win by a comfortable margin, and with a mandate to enact change from the American people.

The President will then get a modest victory of something non-controversial. This will likely be an infrastructure project, small raise in the minimum wage, or new tax credit for working families. Then in the midterm they will lose their governing majority and enact policies a moderate conservative might make. They’ll make more concessions than they need to, and then do what they can through executive orders (all of which can be undone). By the time they leave office, statistics suggest they will have lost 57 House seats, 12 Senate seats, and 12 Governorships. They’ll say hello to President Tom Cotton on the way out the door-an even more dangerous demagogue than Cruz or Trump. Projected with today’s numbers, Republicans would then have a 65–35 Senate majority, a 257–178 House majority and 43 of the nation’s Governorships.

Libertarian Socialist who writes about politics, economics, philosophy religion & history. Former Newspaper Columnist.

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