The Failure of Neoliberal Politics: Appeasement, Triangulation & Rejecting Progressives

The Chicago Tribune reported on a speech given by former Obama campaign strategist and White House adviser, David Axelrod. The headline reads: “Axelrod warns Democrats against obstructionism under Trump.”

“I have a concern that we’re in this mad cycle of mutually assured destruction, and if our attitude is we’re not going to do anything — even if it’s meritorious because it might redound to the benefit of this president — I think that we are only going to increase the level of already very significant cynicism people have about whether the system can work,” Axelrod said. “If that happens, it’s actually Democrats who will suffer the most, because they actually believe in government.”

Appeasement

Appeasement, as evoked by Neville Chamberlain, the British Tory prime minister who, in 1938, signed the Munich Agreement with Adolph Hitler, is how progressives should regard some of the calls by prominent Democrats not to engage in retaliatory tactics against the GOP, now that it has all three branches of government under its control. This may seem like very strong language, but it is appropriate, given how low the Democratic party has fallen, how disconnected it has become from its membership, and why,

Appeasement, starting in the 1990’s, is what began the erosion of  public support by Democratic voters, as Republicans have steadily taken over governorships and state legislatures – to the almost complete present-day disintegration of the DNC party structures in southern states, and the loss of roughly one thousand elected positions, including governorships, state legislatures, the U.S. House of Representatives and Senate.

How, then, is a party that has lost so much of its power dealing with rebuilding? It isn’t. The media, the party leadership, and parts of our government, all are still mired in the destructive recriminations process, rather than dealing with how to approach the near and mid-term:

Russia

A former New York Times correspondent, David K. Shipler, wrote a very thoughtful assessment of the Russia hacking controversy:

“Did Putin authorize the hacking of the Democratic National Committee’s emails? The FBI, the CIA, and the NSA say yes; Trump said emphatic no’s until his press conference this week, when he acknowledged that Russia might have done it. But a small group of former US intelligence agents have organized to express their conviction that the emails were leaked, not hacked, and that the evidence of Moscow’s involvement was “thingruel,” as it was called by Ray McGovern, a former CIA analyst, and William Binney, a former ranking technical specialist for the NSA.

Still, the consensus in Washington and the press that Russia did the hacking raises the next question: Why? To damage Clinton and help Trump in the campaign? The intelligence agencies say yes, mostly citing open-source Russian media as evidence—plus some intercepted Russian cheers after Trump’s victory.

But one has to wonder if Putin is really short-sighted enough to prefer an impulsive, erratic US president with his hand on the nuclear button, a man who can switch on nastiness when offended. Putin may have despised Clinton for allegedly fomenting protests over ballot rigging in his 2012 re-election, but a smart Russian leader would have to recognize Clinton as a more stable and dependable adversary—tough, yes, but schooled in realistic assessments of the opportunities and limits of foreign policy.”

and

“But no adequate research exists to document that enough votes in the US were changed by the release of hacked emails. And even if they were, then the fingers that have been pointed at Putin should also be turned around and pointed at ourselves, at American voters too lazy or too biased to do any critical thinking, check sources, and drill into the truth. In the end, only American voters, not agents in Moscow, can be the downfall of American democracy.

Finally, how much truth—if any—is contained in the 35 pages of memos sent to the FBI by Christopher Steele, a former MI6 British agent who once worked under diplomatic cover in Moscow? Hired by a Republican opponent of Trump and then by Clinton’s campaign, Steele portrays a concerted effort, which he deems successful, to ensnare Trump in a web of wrongdoing involving sex, corruption, and coordination with Russian officials during the campaign. Trump heatedly denied any of it, and no news organization after months of trying has been able to verify a single piece of the story.

As anyone who has lived in Moscow knows, both during Soviet and post-Soviet times, the KGB, now the FSB, indulges routinely in tricks designed to entrap foreigners in compromising situations.”

There is nothing outlandish about Shipler’s assessment. It follows conventional wisdom and long-standing historical precedents in Russian behavior, predating the Bolshevik revolution. The history books are full of stories of the intrigue by various Russian rulers in maintaining and extending their sphere of influence in Western Europe and the British Isles. John le Carre’s novels were based on the scandals that roiled the U.K., with spies and Russian moles whose function was both to spy on the British government and influence it. Le Carre gave Democracy Now an interview about his Times essay, The United States of America Has Gone Mad:

But as Shipler points out, when one assesses both the WikiLeaks and Guccifer emails, there really was nothing earth-shattering in them. They weren’t altered in any way, nor were they contested or explained by the Clinton campaign. The latter is probably the most damning part of the WikiLeaks case. Had Hillary Clinton chosen to publicly discuss the content of the leaks and reassured voters, she indeed had moved from her more neoliberal positions, she would surely have won. Her silence confirmed for millions of voters that she would work against their interests. Russia had some influence but none of the polling done after the election points to the kind of influence that changes minds. There were indications of negative voter sentiment all throughout the primary campaign and after the Democratic convention. The media was proclaiming that the party was unifying when, in fact, there were no indications it was.

The Democratic establishment’s weeks old tantrum, amplified by a ratings-starved media, continues full-boar, with the public distracted away from the internal machinations and actions of legislators they should be watching. For example, like thieves in the night, the GOP scheduled a late-night Senate vote to begin the process of dismantling Obamacare on the night of Wednesday to Thursday January 12th.

The media dutifully alerted the public but very few were the mainstream outlets that also informed the public that 13 Democrats voted with Big Pharma and helped the GOP defeat Senators Klobuchar and Sanders’ amendment to allow the importation of less expensive prescription drugs from Canada. USA Today reports:

Sanders slams Democrats who voted with the pharmaceutical industry

“Sen. Bernie Sanders on Thursday blasted 13 Senate Democrats for lacking the “guts” to stand up to the pharmaceutical industry after they voted against a measure he pushed to help drive down drug costs by importing them from Canada.

The Vermont Independent and former Democratic presidential candidate said during a Thursday interview he plans to personally speak with the senators who opposed the measure — which failed 52-46 on Wednesday — and try to turn them around. A dozen Republicans voted in favor.

“The Democratic Party has got to make it very clear that they are prepared to stand up to powerful special interests like the pharmaceutical industry and like Wall Street, and they’re not going to win elections and they’re not going to be doing the right thing for the American people unless they have the guts to do that,” said Sanders, the leader of outreach efforts for Senate Democrats. “That 13 Democrats did not is disappointing. I absolutely hope that in the coming weeks and months you’re going to see many of them develop the courage to stand up to Pharma.””

So, who defeated this amendment?

Of note in the first half of the graphic, is that some Republicans voted for the measure. On the other side, however, leading the pack among those who voted against, is Senator Cory Booker. When detractors asked him on social media why he voted against the amendment, he made the following claim:

Grateful to you. Please know, a number of dems who voted no last night AGREE WE MUST IMPORT. But we believe basic FDA standards must be met. https://t.co/Xgpg5ISr1J

— Cory Booker (@CoryBooker) January 12, 2017

But as reported by the website, Death and Taxes:

“But while the issue is mostly being framed along partisan lines, there was at least one amendment that a handful of Democrats and Republicans switched sides on: One introduced by Bernie Sanders (D-VT) and Amy Klobuchar (D-MN) that would have lowered prescription drug prices by allowing the importation of cheaper drugs from Canada.

As it now stands, Medicare and Medicaid are prohibited by law from negotiating with drug companies for better prices, mainly because of expensive lobbying by the powerful pharmaceutical industry, which enjoys the highest profit margins in the world.”

Were it not for those Democrats who defected, the amendment would have passed. Booker, according to Jezebel, is the recipient of $275,000 in contributions from Big Pharma.

“Between 2010 and 2016, a handful of the Democratic senators who voted “nay” were amongst the top Senate recipients funded by pharmaceutical companies: Sen. Booker received $267,338; Sen. Patty Murray (D-WA) received $254,649; Robert Casey (D-PA) received $250,730; Michael Bennet (D-CO) received $222,000”

Senator Patty Murray, who also voted nay, is the second ranking Democrat in the Senate, elevated to that position by Chuck Schumer. Is that any way to lead the opposition? Is this any way to start the new legislative session and maintain the most united front with the tightest of parliamentary disciplines – just like the Republicans maintained throughout the last six years? I think not!

Politico’s headline caught my eye:

Schumer, McConnell talks ease confirmation standoff

Democrats had been threatening to delay Trump’s Cabinet picks — but private talks pave the way for national security picks.

Private negotiations between Mitch McConnell and Chuck Schumer are making it increasingly likely that President-elect Donald Trump will have a bloc of his Cabinet selections confirmed on Inauguration Day, according to lawmakers and aides.

Given the GOP’s immediate assault on Obamacare, why give McConnell what he wants? What’s in it for Democrats?

As I reported in my previous post, the dual messaging expressed by Schumer and Pelosi, about remaining faithful to progressive ideals all the while taking decidedly neoliberal action, is in a direct line with a long string of Democratic failures in the last six years, leading to the undoing of the Democratic party.

Progressives: Liberals Aren’t Into You. It’s Time To Move Out Of The Big Tent | Blog#42

In a Vox Media-sponsored town hall, President Obama blamed Sanders voters for the eventual defeat of Obamacare:

“And the third thing is that the polls — whenever you look at polls showing 40 percent are supportive of the law, 40 percent or so are dissatisfied, in the dissatisfied column are a whole bunch of Bernie Sanders supporters who want a single-payer plan. The problem is not that they think it’s a failure. The problem is that they don’t think it went far enough. That it left too many people uncovered, the subsidies were not as rich as they should have been, that there was a way of dealing with prescription drug makers in a way that would drive down those costs. All of those things meant that even after the law was passed, there were still going to be a lot of tough politics.”

The irony in these statements is that Obama is blaming millions of Democrats for wanting full and equal coverage for all Americans, as a matter of federal law. Had universal healthcare been passed, Republicans, today, would not be in any position to repeal the coverage of 320 million Americans.

But that is only one aspect of the right wing of the Democratic party continuing to focus its anger at progressives, all the while distracting the public with its obsessive pursuit of the Russian angle, in continued attempts to lay blame anyone but themselves for losing an election they should have easily won.

Another area that is being used to focus blame away from Democrats and squarely onto half of its voters is the economy, which an accommodating media continues to characterize as fully-recovered. Paul Krugman, in his most recent op-ed, made a claim that stimulating the economy now that it is essentially at full employment, could raise interest rates and inflation, and stunt private investment. Economist Jared Bernstein, in a critique of that op-ed, wrote:

“But is Paul right? Despite the fact that he invariably turns out to be so–i.e., correct–I’m not nearly so worried about interest-rate crowd-out resulting from the big, wasteful tax cut team  Trump and his Congressional allies will pass, I fear, sometime later this year. What I’m worried out is what their raid on the coffers of the US Treasury will do to the programs we increasingly need to meet the many challenges we face.”

and

“So is Paul making a mistake to continue to depend on the model that has heretofore served him—and anyone else willing to listen—so well? My guess is that deficit crowd-out is not likely to be a big problem, as in posing a measurable threat to growth, anytime soon, even if deficits, which are headed up anyway according to CBO, were to rise more than expected.

The global supply of loanable funds is robust and, in recent years, rising rates have drawn in more capital (pushing out the LM curve). Larger firms have enjoyed many years of profitability without a ton of investment so they could use retained earnings (the fact of unimpressive investment at very low rates presents another challenge to this broad model). And most importantly, while we’re surely closer to full employment, there are still a lot of prime-age workers who could be drawn in to the job market if demand really did accelerate.

(This, by the way, is the only part of Paul’s rap today that I found a bit confusing. He’s a strong advocate of the secular stagnation hypothesis, wherein secular forces suppress demand and hold rates down, even in mature recoveries. His prediction today seems at odds with that view.)”

That the oligarchy soon to ascend to power will raid the national coffers is a given. In fact, congressional Republicans have been busy laying the ground for exactly that the instant Congress went back into session last week. But to make such bold claims before even the first bit of legislation has been written, much less passed, takes away much of the credibility Krugman has garnered, especially during such crucial times as the Great Recession. To whose detriment, in the end, was that opinion piece? For the most part, it was precisely against those very voters the Democratic establishment claims it wants to bring back into the fold. Is this some kind of ironic coincidence? I don’t think so. Democrats who are still railing against the mythical “angry white voter,” have begun moving toward punishing him.

Robert Reich, whose advocacy continues to be invaluable, points this out about how Democrats in distressed areas voted:

This is in line with my reporting on who exactly was angry, and why, during the election season. In my June piece, profiling America’s angry voters, I concluded, based on newly released data, that anger was indeed manifesting itself, but not in the way the media was portraying:

Profiling The Angry American In This New Political And Economic Era | Blog#42

If jobs and the economy are at the core of much of the anger in the rust belt and elsewhere, where are we on jobs and should we really but the brakes on stimulating the economy? From Jared Bernstein’s commentary on the December jobs report:

“Over 2016, average hourly wage growth is up 2.9 percent, the fastest yearly gain thus far in the recovery that began in 2009. Coupled with low inflation, this means the job market is delivering real gains to paychecks.

JBs monthly smoother (average monthly gains over 3, 6, and 12-month periods) shows that the pace of job growth has slowed over the year, in part due to weaker GDP growth, but also as is characteristic of maturing recoveries. The Federal Reserve’s rate hikes, albeit small, may also be in the mix as they too are intended to tap the growth brakes.”

and

“The 2.9 percent increase in average hourly pay over 2016 is the fastest pace of wage growth since mid-2009, when the current expansion got underway. (Do not make a big deal out of the big monthly bump of 0.4 percent–that’s a bounce back from last month’s nominal wage decline.) While this number may spook some inflation hawks, it should not:

–nominal wage growth of 3-3.5 percent is considered non-inflationary by the Fed;
–after years of stagnation, wage earners have a lot to make up, and part of that should come from the non-inflationary source of shifting some national income from the profit to the wage side;
–there’s little evidence of wage growth bleeding into price growth in recent years; as wage growth has accelerated, prices have not;
–for 80 percent of the private workforce who are blue collar and non-managerial workers, pay is up 2.5 percent over the past year, so the gains may not fully be reaching all corners of the job market.

As noted, 2016 ended with the unemployment rate at a low 4.7 percent. While that measure is about what the Federal Reserve considers full employment (and thus a rationale for their December rate hike), other indicators, while also improved, are not there yet. For example, underemployment, a broader measure of labor market slack that includes 5.6 million part-timers who’d want but can’t find full-time work, remains somewhat elevated at 9.2 percent. Note that this is down from almost 10 percent over the year, and the lowest it’s been yet over the recovery.

The labor force participation rate ticked up slightly to 62.7 percent, the same level as a year ago and well below its pre-recession peak. Below, I discuss the recent history of this important benchmark. Also, the employment rate for prime-age workers (25-54) stayed constant at 78.2 percent last month. While this proxy for labor market demand for a core group of workers (who are generally non-retirees) is up almost 4 percentage points from its trough, it remains about 2 points below its pre-recession peak.

A final indicator that has significant room to improve is manufacturing employment. While factories added a welcome 17,000 jobs last month, jobs in the sector are down 45,000 in 2016 and were up a scant 26,000 last year, compared to being up over 200,000 in 2014. Part of that decline is due to a strengthening dollar making our manufactured exports less competitive, along with slower growth abroad. Given the salience of manufacturing in not just the political debate, but in the economic conditions and opportunities of many American communities, along with its important role in contributing to productivity growth, this is an area of weakness that demands serious policy focus.”

and

“The labor force participation rate remains historically low, about three percentage points below its level at the end of 2007. But note that it fell in the 2000s cycle as well (though not as fast). Part of the decline over these years has been due to weaker job and wage growth failing to pull workers into the job market, while part—most, according to most analyses—relates to aging demographic trends.

If the partisan political dust ever clears, President Obama will be seen as having presided over one of the sharpest labor market recoveries in modern history, a dramatic reversal, as seen in the circled part of the figure above. The actions of his administration, along with the Federal Reserve, helped to hasten a recovery that, once it took hold in the job market, has delivered consistent employment growth since 2010. Wage growth, as noted, was a laggard, and the low LFPR and high underemployment rate suggests there’s still some room to run in the labor market before we’ve achieved full employment.

But the job market that president-elect Donald Trump is inheriting is strong—the “trend is his friend.” Wise application of fiscal policy—investment in infrastructure, for example (one that doesn’t rely on tax credits and projects with user fees)—could help pull more sidelined, prime-age workers into the job market, and could perhaps even help to boost productivity growth, by, for example, improving the quality of transportation infrastructure critical to supply chains.”

and

“The labor force participation rate remains historically low, about three percentage points below its level at the end of 2007. But note that it fell in the 2000s cycle as well (though not as fast). Part of the decline over these years has been due to weaker job and wage growth failing to pull workers into the job market, while part—most, according to most analyses—relates to aging demographic trends.

If the partisan political dust ever clears, President Obama will be seen as having presided over one of the sharpest labor market recoveries in modern history, a dramatic reversal, as seen in the circled part of the figure above. The actions of his administration, along with the Federal Reserve, helped to hasten a recovery that, once it took hold in the job market, has delivered consistent employment growth since 2010. Wage growth, as noted, was a laggard, and the low LFPR and high underemployment rate suggests there’s still some room to run in the labor market before we’ve achieved full employment.

But the job market that president-elect Donald Trump is inheriting is strong—the “trend is his friend.” Wise application of fiscal policy—investment in infrastructure, for example (one that doesn’t rely on tax credits and projects with user fees)—could help pull more sidelined, prime-age workers into the job market, and could perhaps even help to boost productivity growth, by, for example, improving the quality of transportation infrastructure critical to supply chains.”

[Reprinted with permission from Jared Bernstein]

Democrats, whether in Congress or in the media, need to present a united front both in messaging and in action. Casting aside, again, millions of prime-age workers and their children by espousing dogma that is designed to protest Republican policies on their face, as a matter of principle, rather than strategically and in consideration of those who are still suffering from the remaining effects of the Republican Great Recession is not only unethical and unconscionable, but in the long run, political suicide for a party that is in deep trouble with nearly half its voters.

Democrats should have been busy rebuilding the party since November 9th. They’re not done lashing out at voters or the Russian Bogeymen. Other than saying they need to work their way back to blue collar voters, they remain unwilling to list the reasons why the election was lost, or reverse their positions on those issues.

Robert Reich has resumed calling for reforms within the party. All indications are those calls are calling on deaf ears and will continue to. The questions remain what will it take and how much longer the progressive leadership will wait before it concludes that the Democratic party is beyond salvation and it is time to move on?  Senator Sanders amassed much political capital during his primary run last year. Every day that passes without decisive action to give progressives a framework they’ve been demanding, that capital depreciates.

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