The Democratic Party is having an internal battle over the "small" and the "large" infrastructure bills, but what's really at stake is the future of neoliberalism within the party. The smaller "bipartisan" bill represents the neoliberal worldview, including public-private partnerships and huge subsidies to for-profit companies, whereas the larger "reconciliation" Democratic Party-only bill hearkens back to the FDR/LBJ classic progressive way of doing things.
Milton Friedman began selling neoliberalism to America in the 1950s, and we fully bought into it in the 1980s. Most Americans had no idea, really, what this new political/economic ideology meant; they just knew it involved free trade, economic austerity/tax cuts and deregulation/privatization.
The free trade part, we were told, would bring about the end of great-power wars because countries that were economically interdependent wouldn't dare ruin their own economies by going to war with a significant trading partner.
The "McDonald's Theory" hatched by Thomas Friedman was argued on TV and in the newspapers: no two nations that had McDonald's fast-food restaurants, we were told (falsely), had ever gone to war with each other.
Free trade was also going to eliminate poverty in the world by giving every country an "even playing field" to compete for manufacturing jobs.
High-wage countries like the US and the UK would have to stop protecting their laborers with unions, whose wage and benefit demands were merely "drags on the economy" and prevented the "magic of markets" from working.
Low-wage countries would pick up much of that work, but over time their people would rise into the middle class, too, and everything would even out.
And, indeed, trillions of dollars of wealth were sucked out of the American working class as union membership plunged from around a third of workers to about 6% in the private marketplace today, all while China saw the fastest and strongest rise of a middle class in the history of the world. There are now more middle-class Chinese than the entire population of the US, as the American middle class sank below being half our population for the first time since the postwar era got seriously underway.
Austerity was supposed to end ghettos, crime and poverty in America by withdrawing the supports "lazy" people used to get by without having to work.
In the neoliberal story, Black people weren't isolated in their neighborhoods by redlining and racist designs for highways, power-plants and other polluting industries; they lived in "public housing" on "welfare" and made more and more money, the neoliberal story went, as they had more and more babies out of wedlock.
Reagan told the story of the "strapping young buck" in line at the supermarket upsetting all the hard-working white people when he whipped out his food stamps to pay for his steak and beer; it was the male complement to Reagan's Black "welfare queen" myth. Cut off his food stamps, the logic went, and he'll be forced to look for gainful employment"even if there were no jobs within miles and white employers wouldn't then hire Black people.
The occasional Black rags-to-riches stories, like Herman Cain or Ben Carson, were celebrated and held up as an example of how neoliberal austerity policies would "transform the 'hood" and bring about both racial and economic integration nationwide. Meanwhile, harsh prison sentences, mandatory minimums and three-strikes laws would end the scourge of "super-predators" on our streets.
And neoliberalism's tax cuts for the morbidly rich would incentivize them to start new businesses and "create jobs." Everybody would win!
Deregulation, we were told, would enable all of this "free market magic" to happen quickly, because businesses were more nimble and knew better what they needed to do to make their products than did "government bureaucrats."
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