(this post will repeat stuff I've said before; it's one of those posts where I am stuck on something, where something I think I've known seems different or new or inflected in a way I didn't get before)
Our time is like the seventies.
In the seventies, Keynesianism collapsed. According to Judith Stein: the seventies is the only decade after the ends wherein Americans ended up poorer than they began. "The decade featured the deepest recession since World War 11, growing and permanent trade deficits, anemic productivity, rising oil prices, and high unemployment and inflation..." In the face of these challenges, policy makers "traded factories for finance," that is, they replaced assumptions that capital and labor should prosper together with an ethic that claimed that promoting capital would ultimately benefit labor.
As Stein emphasizes, the story about the seventies that matters is not one of increasing conservativism on the part of white workers. Rather, it is one of a polity in conflict, people and policies in deep turmoil and upheaval as the old consensus broke down and a new one forced itself into the picture.
2008-2011: the turmoil expressed in market turbulence, Tea Partiers, Republican devolution into pure bat-shit crazy, Standard and Poors debt rating, the stand off over the debt ceiling, policies that go in opposite directions, unemployment, etc is the turmoil of the decline of neoliberalism. Obama is governing as a neoliberal--feeding finance--when that approach is not working. It's not generating the soothing yet superficial boosts and bubbles that it has since the 90s.
As in the seventies, we are in the midst of a legitimation crisis--as is relatively apparent in all the poll data regarding confidence in government. People don't think that government can help not simply because of the stand off but because the stand off is a symptom (not a cause). It's a symptom of the absence of an approach to politics and the economy that makes sense. The initial trigger on this was when Greenspan said that his whole world view had collapsed.
Just like Keynesianism was attacked from left and right, so is neoliberalism. The left attacks it for its unfairness, for the rise in inequality, for the loss of jobs. The right attacks neoliberalism it for its continued reliance on the state (the neoliberal state had been supposed to further competition as well as subject itself to market logics) and for its weak but remaining social welfare provisions.
There is no middle ground because there is no common ground, no common language, no set of shared assumptions. Obama said a couple of times during the debt ceiling fiasco that they were not coming up with an approach that both sides could agree on. And the right said that they could not deal with Obama (whose legitimacy they have denied from the beginning).
Similar scenes are playing out in the EU and UK in the conflicts over austerity, debt, and unemployment. In the UK it's most dramatic in the struggle around the narrative of the riots--economic outcry or greedy, vicious, lazy products of a welfare state. Because the last 30 years have witnessed the pull back of the welfare state, this second story is unlikely to be convincing (at least for long). But everything depends on the strength of left vision. On our capacity to make the communist alternative clear, compelling, the only alternative to hopelessness and inequality.
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