May 23, 2016 (San Diego) This year has been so unpredictable, and will remain such, due to the long term trends in the United States. Many members of the professional commentariat, as well as both party elites, continue to scratch their head. Why is it that Donald Trump secured the Republican nomination, and why is it that Bernie Sanders still has a chance, albeit one that is near impossible? What is more, there is this belief that once the primaries are settled things will become more predictable.
We at Reporting San Diego don’t expect this year to be predictable. We were among the earliest in media to believe this was an outsider election. So now we would like to explain what in our mind is going on. Mind you, this unpredictable brush fire did not start today. It has been ongoing for over 2 decades. The seeds of a lot of this economic and social malaise do go back to Ronald Reagan, but were magnified by the Bill Clinton administration and the adoption by both parties of economic neoliberal policies.
Neoliberalism is defined as follows:
What is ‘Neoliberalism’ Neoliberalism is a policy model of social studies and economics that transfers control of economic factors to the private sector from the public sector. It takes from the basic principles of neoclassical economics, suggesting that governments must limit subsidies, make reforms to tax law in order to expand the tax base, reduce deficit spending, limit protectionism, and open markets up to trade. It also seeks to abolish fixed exchange rates, back deregulation, permit private property, and privatize businesses run by the state.
Liberalism, in economics, refers to a freeing of the economy by eliminating regulations and barriers that restrict what actors can do. Neoliberal policies aim for a laissez-faire approach to economic development.
So what does this mean for the average worker that has been affected by these polices in the United States, or for that matter Mexico? After all, the North American Free Trade Agreement (NAFTA) is a perfect example of these policies. In effect it is giving preference to the market than regulations, and allowing the market place to externalize the consequences.
First, what does 19th century economics have to do with with BAFTA? Quite a bit actually. The agreement, like all other free trade agreements, is predicated on the idea that the market place will determine things like wages. Why these agreements actually weaken labor and encourage transnational companies to move production form the United Staes to first Mexico and now even lower paid and regulated markets. This is also pushing to lower the standard of living of American workers to that of many foreign markets.
While what I just described is rather technical, NAFTA was not the beginning of this. What economist call the decoupling of productivity and wages started in the 1970s. This chart tells the story very well.
This was the first moment American workers started to get hit by this. In the 1980s the market became king, and greed became good. What was happening is that government was maligned by conservatives who kept telling Americans that they did not need to rely on it. At the same time, Democrats kept losing pace in electoral office, and then came 1992, and Bill Clinton.
He was the new face of the democratic party, the third way, the neoliberal that wold help restore the true place of the market within the global economy. He accomplished many of the long standing goals of the republcians by triangulating the living daylights of policy. Therefore, crime reform was put in place. This crime reform led to an interesting detail. Job growth among minorities was through the roof, but only becuase many economists ignored that many people of color were behind bars, and not counted in economic productivity numbers.
Employment-population rates adjusted to include inmates suggest that only 26 percent of young black, male dropouts were employed in 2008, while over 37 percent were in prison or jail. Over half of the joblessness of young, black, and male dropouts is linked to incarceration. Accounting for penal growth suggests that the black-white employment gap is now significantly wider than it has been since 1980.
So when one add this to the mix, the picture is not that rosy. We are not even dealing in this article with the rest of it. One reason why work, good jobs, disappeared in places like Detroit, is precisely the job flight to other countries in a globalized economy. This has led to poverty rates that are stubborn.
While this is a Heritage chart, similar ones exist and this is census data.
This is no accident, and it is also directly related to the collapse of unions and the rise of right to work laws in the United States. The other issue that continues to be quite stubborn is food insecurity, which goes hand in hand with poverty rates. At this point 48 million of your neighbors do not know where their next meal is coming from.
Americans usually do not speak in these terms. Instability is something that happens somewhere else. But we have seen instability in the United States due to these conditions. You could even say that the first to get it, were auto workers who destroyed some Toyota vehicles back in the 1980s.
That image sent shock waves, but that was the first time that workers realized their good paying, union jobs, were at risk. They took it out on a poor Toyota vehicle, not on the right targets, the policies that allowed for that trend to start. They did not start with Democrats. They started with Republcians. NAFTA< while signed by Clinton, was the brain child of the George Bush Senior administration, but it was approved by a democratic hill, and singed by a newly sworn in Democratic president.
This though was the beginning of some resistance to what was coming down the pike. The second moment was what came to be known among anti-globalization activist, as the Battle of Seattle. It was a battle against the World Trade Organization, and it taxed the police. It also lead to some images that later on would become familiar around the world.
At that moment it was not seen as more than just some white rich kids rioting against the police. At least that is how the United States major media presented this. The idea that there was a cause or a reason for these young people to riot never was asked. This is common in the coverage of these protests, they are coming from a rise in income inequality, which is placing civil society at risk.
We have had three other major markers, some of which have coincided with revolts against neoliberalism abroad. The first was the student revolt in Berkeley. Ok, revolt is not quite the word to use, but it got hot. In 2009 student rates (again) went up. College is almost out of reach for middle class students, and it is definitely quite out of reach for working class people. This is part of a neoliberal agenda. So students protested and the UC system actually retreated.
The second one, and it coincided with the Arab Spring and the Indignado movement in Spain, was the Occupy Wall Street movement. This was a global spring as it were, and one that demanded changes, and it was organic. Some of the themes that ran the gamut of languages were austerity policies and lack of opportunities for the youth. Specific to the United States, there was clear anger at the bank bailouts, not because they saved the economy. The argument can be made that without them a far worst economic depression would have occurred. They were stimulative. What angered people was that those who caused the crisis, were never brought to account. In fact, the same the same conditions that led to that crisis remain in place.
Demands from Occupy included issues is income inequality and access to health care, as well as fair trade. Remember the WTO protest? That came back with a passion. The media never asked why are people occupying plazas though. That was an inconvenient question.
So we come to the current race for the presidency. Common thought has it that people will accept whoever emerges as the president elect. This has happened every time. But this is a change election. People are not thinking this short term. Activists, know that the future is still in the field of peaceful protest. This is a long standing trend and it will not stop the day after the election. It started with workers pounding on a Toyota Celica. People know the system is rigged agains them. It is now a pattern, and one that is now multi-generational.