Prometheus 6

Kuttner takes on four pillars of neoliberalism: the preference for balanced budgets and modest-size government; free trade; economic austerity as a condition for development aid; and financial-market deregulation. In each case, the evidence suggests neoliberal policies were either irrelevant or downright disruptive.

Doesn't that sound Republican? It definitely sounds Clintonian...they are neoliberals. Maybe our problems have more to do with being "neo" than with being "con."

The Clintonites spent the ’90s negotiating one trade deal after another. But once the dust had settled, the laissez-faire approach appeared to have accelerated the decline of American industry. What the Clintonites (and, to be fair, this commentator) missed was that clearing aside trade barriers can leave you dangerously exposed when many of your trading partners — especially in East Asia — don’t reciprocate.

Perhaps the most disturbing story involves financial markets. It’s no surprise that an administration staffed with Wall Street refugees would view New Deal-era restrictions on banking and investing as excessive. What’s surprising is that the Clinton White House would champion deregulation with so little regard for the consequences.

It’s the Politics, Stupid
By NOAM SCHEIBER

This July, when the Democrats John Edwards, Barack Obama and Hillary Clinton all proposed closing a tax loophole that saves hedge fund managers hundreds of millions of dollars each year, it wasn’t immediately clear what to make of it. On the one hand, it was the sort of proposal you’d expect from the party of working people. On the other, these three presidential candidates had stayed silent on the issue for months — while raising gobs of money from wealthy financiers. Why would they turn on them now?

Only later did we get some hint of an explanation. The New York Times reported that Charles Schumer, the Senate’s third-ranking Democrat, had spent June assuring Wall Street donors that the loophole would remain intact. This made the pronouncements a victory for everyone involved. The Democratic candidates could take the high road publicly, while their contributors could rest easy knowing those tax breaks were safe.

In “The Squandering of America,” Robert Kuttner says financial elites have too much sway over the Democratic Party — and, as a result, over public policy. Judging from the tax-loophole episode, it’s hard to disagree.

Kuttner, co-editor of The American Prospect and a columnist for The Boston Globe, won’t wow you with the novelty of his arguments. Liberals like him spent most of the 1990s groaning about Wall Street’s grip over the Clinton White House, and about the “neoliberal” agenda that resulted. (In his own book, Gene Sperling, once an economic adviser to Bill Clinton, recalls facing off against “the Three Bobs” — one of them Kuttner — during the bruising internecine fights of that decade.) The strength of Kuttner’s latest effort is that, with seven years’ distance from the Clinton era, his arguments now look emphatically right.