Everyone Hates Neoliberals, So We Talked to Some

[LWolf]

46. Ms. Peyser put out a call to the wrong people.

If she wanted to talk to neoliberals, she should have been calling up economic think tanks, Wall Street, the heads of multinational corporations, and economists. The term itself is just now moving into more mainstream awareness, so it's not surprising that she wasn't getting a clear picture.

The term "neoliberalism" goes mainstream:

A recent text written by three important economists at the IMF, titled Neoliberalism: Oversold?, has drawn a lot of attention in the past days. Perhaps the most impressive matter that should be highlighted about the text is in its very title: the use of the word neoliberalism, so far mostly used by critics of this agenda that gained strength in the 1980s and generally associated with a sort of “conspiracy theory”. Besides that, the findings of the text should come as no big surprise to non-mainstream economists: instead of economic growth, neoliberalism has brought financial instability and increasing inequality.

This is due to two main pillars of the neoliberal agenda: capital flows liberalization and government fiscal consolidation. Freedom of the capital accounts was expected to bring about a more efficient allocation of resources in an international level. Both developed and developing countries would reap benefits from it: the former by obtaining higher returns on capital investment and the latter by receiving the necessary savings to finance capital development.

https://theminskys.org/a-sinking-ship/

Neoliberalism brings about greater income inequality.

When Oxfam’s 2016 Davos Report revealed that 62 people own half of the global wealth many were shocked by this finding and attributed it to high poverty levels in low-income countries. However, wealth inequality is also a problem in rich countries like the US. The OECD found that the wealthiest 10% of US households own 76% of the total wealth, while those at the bottom 40% of the distribution have no wealth at all. To make matters worse, the 2008 Great Recession wiped out the wealth of many American families, and they failed to regain it in the ensuing recovery. Research done by Levy Institute’s Pavlina Tcherneva found that in the aftermath of the Great Recession, real incomes of those in the bottom 90% of the US income distribution have fallen, while those in the top 10% have enjoyed all the gains of the recovery. T

These trends are the result of neoliberal “free-market” policies implemented since the 80s, which emphasized tax cuts, deregulation, and weakening of labor protections, all under the guise of increasing efficiency. Trade deals, while not the sole culprit, have played an important part in the downward pressure on wages for American workers and the loss of numerous domestic manufacturing jobs. The rise in global trade has created severe competition for many American workers, many of whom have lost their jobs or been forced to accept pay cuts. Trade agreements put in place by the US offer corporations the necessary legal protections to safely relocate their business overseas. While proponents of trade agreements continue to insist these will create new jobs for American workers, the opposite has been true. For example, the Economic Policy Institute estimates that almost 700,000 jobs have been lost as result of the North American Free Trade Agreement (NAFTA), despite it promising to create 200,000 new jobs for American worker.

https://theminskys.org/the-trans-pacific-partnership-trade-deals-and-income-inequality/

Not just here, but abroad as well.

Macron’s platform consists of neoliberal platitudes that espouse values such as tolerance and acceptance of immigrants, while advocating for austerity and dismantling of social protections under the guise of increasing efficiency and “modernizing” the French economy. Macron pledged to reduce France’s deficit below 3 percent, as mandated by the EU, while also cutting taxes. To achieve both goals, Macron would undoubtedly have to slash government spending, which would most likely have a negative impact on the economy overall.

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Considering the shortcomings of neoliberal policies imposed by the EU, perhaps Melélnchon’s “Plan A,” to push for EU-wide reform is not that “extremist” after all. Rather than crucifying him, he should have been given the chance to advocate for reform. The current direction taken by the EU is one that through austerity measures is slowly dismantling the European Social Model, which has traditionally been characterized by a strong safety net. As long as the EU imposes and encourages a platform that hurts people, far right politicians like Marine Le Pen will continue to tap into those anxieties and gain popularity. The success of the Brexit campaign should serve as impetus for the EU to reevaluate its policies.

Politicians like Macron, who chose to ignore the flaws of the eurozone and advocate for more of the same unsuccessful policies may win popularity now, but set themselves up for failure in the long run. Macron’s unconditional praise of the EU’s virtues is somewhat similar to Hillary Clinton, who under a backdrop of suffering and social crisis, responded to Trump’s slogan “Make America Great Again,” by stating “America is already great!” This strategy failed and Clinton lost, with areas where jobs were under the most severe threats swinging towards Trump.

For the European project to succeed and continue bringing peace and unity to Europe, economic policy reform is necessary and austerity needs to end. Ignoring the economic struggles of the bloc and refusing to recognize the role of EU policy in exacerbating them will continue to fuel the rise of extremist right wing politicians. Calling those who advocate for socially inclusive reforms “extremists” is a strategy bound to backfire.

https://theminskys.org/denouncing-the-flaws-of-the-eu-is-not-extremist-its-necessary/