Gutless Democrats fear fights: Why triangulating neo-liberal Clintonites back big business over peop
As the Democratic primary heated up to the boiling point, one particular line of attack on Bernie Sanders had the distinctively Karl Rove-ian stench of attacking Sanders’ strength. Vox, Slate and AEI all bought the spin and struck the same theme: “If Bernie Sanders cares about poor people, how come he doesn’t want to trade with them?”
But even more than Rove, we can catch a distinctive whiff of Thatcherism here: There is no alternative; either we do trade on neoliberal terms or else we head back to caveman status. We can’t do things in a more equitable manner, we’re being told, even though history repeatedly shows that we can—replacing monarchy with democracy, abolishing slavery, getting rid of child labor, establishing equal rights for women. All these equalizing advances we’ve come to take for granted were unthinkable once: there was simply no alternative… or, again, so we were told.
Economist Dean Baker debunked the underlying argument on his “Beat the Press” blog as the attack on Sanders first appeared, and elaborated his critique more fully in a piece solicited by the Washington Post—which then declined to run it. Baker first noted that conventional economic theory calls for rich countries to run surpluses with developing countries—supplying the capital they need to develop—and that this pattern prevailed throughout most of the 1990s. “The United States had a modest trade deficit in these years, but Europe and Japan had large surpluses,” Baker recalled, but “This pattern was reversed in 1997 with the U.S.-I.M.F.’s bailout from the East Asian financial crisis.”
That bailout, “directed by the Clinton Treasury department and the I.M.F.,” came with very harsh terms, which led developing countries to decide they had to keep large foreign exchange reserves—meaning U.S. dollars—in order to avoid a similar fate. This in turn required running large trade surpluses, the exact opposite of what conventional, textbook economic thinking had previously assumed. “This was the period in which the U.S. trade deficit exploded, going from just over 1 percent of GDP in 1996 to almost 6 percent of GDP in 2005, a rise in the size of the annual deficit equivalent to almost $900 billion in today’s economy,” Baker noted. “This rise in the trade deficit coincided with the loss of more than 3 million manufacturing jobs, roughly 20 percent of employment in the sector.”
http://www.salon.com/2016/04/23/gutless_democrats_fear_fights_why_triangulating_neo_liberal_clintonites_back_big_business_over_people/
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