Excerpted from here (The Current Moment):
An excellent recent piece by Glenn Greenwald reminds us that Obama has always wanted significant cuts in social spending, and more generally been a champion of ‘entitlement reform.’ (Greenwald supplies the bulk of the evidence here). The key point is that Obama was not just pushed by nutty right-wingers, he has been a supporter of significant revisions to social programs for a long while.
Of course, the plan may not exactly have been to Obama’s liking. And we can debate just how much Obama conceded versus got what he wanted (the best version of this debate is here), but most of this debate is besides the point. This budgetary compromise did not come to be in a vacuum. It is not just Obama but the entire Democratic Party that has been unable to provide convincing responses, and for good reason. For the past twenty years, the Democratic Party has been the part of austerity. The Clinton years have been celebrated as years of fiscal responsibility, whose crowning achievement was a balanced budget. The 1996 welfare reform entrenched the view that Democrats, too, thought there was a problem with the ‘culture of entitlement,’ and that individual households need to be more ‘responsible.’ The New Democrats also attacked the ‘old left’, echoes of Obama’s recent attack on the ‘professional left,’ and especially their tax and spend attitudes.
Additionally, although it was Clinton who said ‘it’s the economy, stupid,’ it was the New Democrats who argued for a restructured role for the state in the economy. Their post-Cold War savvy told them the government should not try to do too much, correct market failures, alter incentives, but never compete with private industry (think recent health care reform and the rejection of the public option) and certainly forget about something as ambitious as a jobs program. No wonder the Democrats were unable to mount a very convincing case against the Bush era tax cuts, against cutting social spending, and against the stupidity of austerity on the brink of a double-dip recession.
The neoliberal chickens of New Democracy have come home to roost. The political economy of New Democracy was, in fact, oddly contradictory. It was, on the one hand, the dream of a frictionless economy, spurred by the heady, speculative, but deeply inegalitarian dynamics of the ‘New Economy’ (whose myths have been decisively dispelled in After the New Economy). The post-industrial economy could grow on symbols, credit and knowledge alone. On the other hand, it promoted an ethos of limits: don’t expect the government to do what it once did, collective solutions to political problems are possible only on the margins, the individual must manage more with less. The government’s job is to keep things reasonable, like a balanced budget.
The New Economy crashed (twice), and the Democratic Party was left holding the sputtering torch of its post-political economic theory. All that remains is its political (and funding) alliance with the new financial class, and decline of its former political basis in organized labor. No wonder, then, the Democrats have found themselves outmaneuvered. They have spent the last twenty years arguing against the ideas they suddenly hoped to trot out now – indeed against the very possibility of dramatic collective solutions to serious economic problems.
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