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Breaking From Neoliberalism: Why the Democrats Need New Leadership

The polls were wrong, the unthinkable has happened, and Donald Trump has been elected the 45th president of the United States, with a Republican Congress. The swing voters, as in most presidential elections of the past few decades, were white working class voters. It would be worthwhile therefore to think about how a large majority of this group ended up voting against their own interests.

Many liberals will blame the voters themselves, seeing them as racist, misogynist, and otherwise backward and ignorant. There is no doubt that Trump voters are worse than average in attitudes towards non-white Americans, immigrants, and women. After all, most of them are Republicans; about 90 percent of Republicans voted for Trump and that is the bulk of his base. The Republican party has, since at least the civil rights movement and legislation of the 1960s and its “southern strategy,” been a white people’s party. It has also engaged in a “war on women” before Trump took the stage to literally add a lot of insults to the injuries. So, no surprises there, even if he used a police whistle instead of just a dog whistle.

The more important question is what moved the swing voters. And here it must be acknowledged that while racism and sexism were factors, there were also millions of “protest votes.” Trump posed as an outsider and many of his supporters liked that he was giving the middle finger to people they didn’t like, including the mainstream media and politicians.

But to see how they might be angry enough to vote for someone like Trump — whom many did not even like — we have to look at the economic policies that Democrats and Republicans alike have implemented, and how these have ruined the lives and futures of so many Americans.

The media has focused on trade, partly because Trump opposed the Trans-Pacific Partnership (TPP) and other trade agreements and attacked Hillary Clinton for supporting them. Although Hillary took a position against the TPP in the campaign, she had previously supported it and there was reason to believe that she would do so after the elections. It certainly didn’t help that President Obama launched a serious effort, in the middle of the presidential campaign, to pass the agreement — aiming for the lame duck congress, where the swing votes would be unaccountable and many would soon be taking new jobs as lobbyists.

But the TPP and “trade” — the quotes are necessary because the most economically important features of the TPP agreement are not tariff reductions but rather rules that give corporations and patent and copyright holders new rights and privileges — are mostly stand-ins for a larger set of neoliberal policies that have hurt the majority of Americans over the past few decades. These include, for example, the country’s most important macroeconomic policies: fiscal, monetary, and exchange rate policies.

Trade is a surrogate because people often do not understand these macroeconomic policies. This is not their fault: the media does not tell them that when the Fed raises interest rates, as it will likely do next month now that the election is past, it is deliberately slowing job growth and wage growth for workers in the bottom half of the wage distribution. Or that the lack of job opportunities for millions of Americans could be remedied by increasing government spending, with no real cost to society since real interest rates are at zero. Or that an overvalued dollar is responsible for many more jobs going overseas than even the worst trade agreements. Or that the US Treasury can determine the value of the dollar, and therefore our trade deficit, no matter what China does or wants.

So “trade” agreements and “globalization,” as they are represented and misrepresented in the media, take on an outsized importance. Of course they have played an important role in the past in de-industrializing parts of the country and destroying good-paying manufacturing jobs. But today, they are the most visible manifestation of neoliberal economic policies that have destroyed the livelihoods, hopes, and dreams of millions.

The neoliberal structural reforms of Bill Clinton — NAFTA, the WTO, welfare reform, and financial deregulation did so much damage that there wasn’t much left for the next president, George W. Bush, to do.

When center-left politicians — in this case from the Democratic Party — abandon much of their base in important ways, they can end up voting for right-wing demagogues. We can see this in other countries: e.g., in the Brexit vote in the UK, or in France (where the right-wing National Front has made large gains in recent years). This can create a vicious circle, where the center-left dismisses such voters as “backward” or “xenophobic” and pushes them further into the hands of the right, rather than looking at their legitimate grievances and trying to do something about them.

Partly because of Bernie Sanders’ campaign, the Democratic Party produced its most progressive platform ever this year. But this was not enough to convince swing voters that Hillary, given her record, would implement it.

All this is not to ignore the fact that Republicans are reliant on voter suppression, and gerrymandering for the House of Representatives in order to get the power they now have. Without these anti-democratic tools, the Republicans would be a permanent minority party.  Voting reform is essential to a democratic transition for America.

But the Democrats will also need new leadership that is willing to provide an alternative to the past four decades of neoliberal failure.

This column originally appeared in The Hill.

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Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of  Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015).

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