Neoliberal Way

The Clinton family on the White House lawn in 1998. Photograph via U.S. National Archives.

From The Nation:

Early in his presidency, Clinton developed what would become the key feature of his politics: Recognizing that the New Deal coalition between Southern Democrats and the Northern working class had fallen apart, he set out to win over those people who voted for the GOP. This required triangulation, especially in a context in which the free-market right had won a near consensus over the perceived failures of the welfare state. As Tomasky argues, Clinton was genuinely concerned with improving the lot of working-class Americans. Yet all of his policies to that end were hemmed in by a neoliberal framework that had been embraced by both sides of the aisle by the 1990s. Sometimes this was against his wishes—when discussing his first budget, Clinton famously complained, “You mean to tell me that the success of my economic program and my reelection hinges on the Federal Reserve and a bunch of fucking bond traders?” But it also became a central feature of Clintonism.

This economic straitjacket was the result of a fight that had started decades before. After the Great Depression and the Second World War, classical laissez-faire economics had been profoundly discredited, and the Democratic Party had come to accept that strict controls on the markets and protections for workers—in the form of pro-union legislation, the regulatory state, antitrust policy, and so on—were needed to moderate the ruthless swings of capitalism.

But many still hated the New Deal—and that included a faction within the Democratic Party. When, in the mid-1970s, the United States suffered the twin problems of high inflation and high unemployment—or “stagflation”—these anti–New Dealers pounced. Blaming the problem on New Deal structures, they insisted that only deregulation, union-busting, and tight money would restore growth and stabilize prices. Under the direction of Al From and his Democratic Leadership Council (DLC), of which Clinton was a charter member, this group of “New Democrats” consolidated in the 1980s and gradually rooted most of the old New Dealers out of leadership roles in the Democratic Party, and eventually out of the party altogether.

Democratic presidential candidates from 1976 on were, on the whole, increasingly neoliberal. Clinton’s victory proved that they could win, and his reelection—the first Democrat reelected after a full term since FDR—cemented the idea that the New Deal was dead and buried. By the late 1990s, only a handful of stubborn populists—for example, Paul Wellstone and Howard Metzenbaum—clung to the New Deal tradition.

“Somewhere in Between: The rise and fall of Clintonism”, Ryan Cooper, The Nation