On the Title
Oprah projects through pop culture – “Anyone can be Oprah.” The American dream of limitless resources must be true for people of color because Oprah exists. She embodies the post-racial politics of Neoliberalism.
An Introduction To the Series
Racism is significantly a struggle over scarce resources. Neoliberalism is an economic religion that believes we live in a world where scarcity is a matter of inefficient markets that are not allocating resources properly. “Government is bad,” for example, because it misallocates resources. If “markets are free,” we will achieve the “promised land” wherein growth continues for everyone.
The inconsistency of arguing ongoing growth in a free market where resources are scarce is often lost. If resources are scarce, how can the pie grow forever on a finite earth? The Neoliberal denies the zero sum nature of living organisms. At base, this is a denial of scarcity itself although most Neoliberals would deny these characterizations.
Scarcity is everywhere in history. Slavery, for example, grew out of the scarcity of labor.
LINK
Early in pre-colonial America, there were White indentured servants.
LINK
Indentured servants were bound for a limited-time under contracts to provide free labor. However, slavery represented an “innovation.” Ownership of Black slaves provided free labor for life, and, thereby, freed the “employer” from the constraints of contracts.
That slavery was an act of pure evil does not change the cold logic of the economic transaction, which is part of the reason my political economics professor would always say, “Capitalism thrives without democracy.”
It became economically feasible to engage in the commercial production of cotton. This provided the incentive to clear vast tracks of land in the southern states and much larger numbers of slaves were imported for the task.
The more slaves there were, the more money was tied up in them and the greater resistance to the idea of eliminating the institution. At the point the Constitution was adopted, slavery was still legal in all states. However, in the North where they were few in number, it was politically feasible to phase into abolition.
The rationalizations of Bible, Social Darwinism and paternalism justified the value of retaining free labor as property rather than as a contractually limited period of control over free labor. This is not to say cultural racism doesn’t exist or that it has not become a means to its own ends. It is a point about why, in its deepest roots, it exists. Race provided a mechanism by which one could easily identity the “property.”
Indeed, Native Americans were used as slaves:
The Atlantic Slave Trade was the result of, among other things, labor shortage. Native peoples were at first utilized as slave labor by Europeans, until a large number died from overwork and Old World diseases.
LINK
The Wiki article points to other factors for the labor shortage.
What was originally, a means of addressing labor shortages, today, is a means of dividing up the economic spoils of our society. This is not to say that Whites are not suffering under Neoliberalism. Indeed, they are. It is just that they are now suffering in ways that people of color have always suffered. They are finally coming after you rather than just us. White voters, having ignored the realities of the economic policies, are now facing a race to whether people color have been for generations.
Addressing resource scarcity and allocation continues to this day. Yes, we overcame slavery. Yes, we overcame Jim Crow. We did not escape scarcity and race still exists. It is in the light of scarce resources and the realities of race that one should examine Neoliberal economic ideology rather than in the fanciful notion that people of color can be like Oprah.
You may be asking, “What exactly is Neoliberalism?”
We can start with this basic definition:
The term Neoliberalism is used to describe a political-economic philosophy that had major implications for government policies beginning in the 1970s – and increasingly prominent since 1980 – that de-emphasizes or rejects positive government intervention in the economy, focusing instead on achieving progress and even social justice by encouraging free-market methods and less restricted operations of business and "development". Its supporters argue that the net gains for all under free trade and capitalism will outweigh the costs in all, or almost all, cases.
LINK
More succinctly, in actual practice, one can describe Neoliberalism as the following end-goals:
- The rule of the “free market”
- Reducing government expenditures on social services
- Deregulation
- Privatization
- Gutting the notion of “the public good.”
I shall return to these end-goals throughout this series. While the end goals are easy to identity, Neoliberal tactics are legion.
A brief list of those tactics includes: regulatory capture; weaken legislation; judicial appointments and interpretation; direct privatization; privatization of key portions of programs; legislation lacking enforcement mechanism; legislation lacking proper funding; regressive tax policies or tax policies designed to starve the government of revenue for fiscal progressive policy making goals; commoditizing rights or social goods such as health care or education and liberty (the prison industrial complex); the privatization of enforcement (FDA inspection of foods); destroying social safety nets; creating crisis that require Neoliberal “solutions”; manufacturing consent (higher unemployment as the new “normal”); immigration laws;a race to the bottom regarding the cost of labor by forum shopping between various countries for the one with the weakest labor or environmental laws; allowing banks to be too big to fail and ignoring moral hazard, a historic reason for government action; shifting risks to the middle class from the wealthy class; unfair trade policies that favor multiple national corporations; reinforcing the central narratives of private actors at the expense of the public good; and much, much more.
They are legion.
One has to think several moves ahead to understand the impact of any given tactic toward the eventual Neoliberal end-goals. When Grover Norquist speaks of drowning government like a baby in its bathwater, he’s not discussing a single event in time.
He’s playing the real 11-dimensional chess that has implemented many derivative tactics since the 1970s. If you can’t, for example, weaken or end a law directly, you use regulatory capture or weakened regulations to decrease the impact of the law in actual practice on the private sector or you so under fund enforcement agencies so that the practical affect again is no enforcement at all.
Norquist, for his part, is advocating a process of starving the government over time of tax revenue that would in turn create deficits and debt that would lead to cuts in funding progressive action.
In looking at Neoliberal strategy one must ask: Will the tactical moves on any given policy battle increase the likelihood of long term Neoliberal strategies, which in turn increase the likelihood of Neoliberal end goals? Indeed, when bloggers speak of narratives, many are likely discussing Neoliberal policy as the end goal.
This series will cover many aspects of this issue. However, to start off the series, this diary will focus on African-Americans in particular as far as the economic data over the last 30 years.
Many will want to frame this as a partisan squabble of Republicans versus Democrats. However, Neoliberalism is, in fact, the only bipartisan endeavor in Washington, and, in fact, Neoliberalism, itself has come to be called internationally the Washington Consensus. Across Democratic and Republican administrations and Congresses, the Neoliberal ideology has moved inexorably forward as the defining party of DC.
In other words, many of the policies that impacted people of color as far as race and Neoliberalism are concerned are in fact policies developed over multiple administrations- both Republican and Democratic.
To begin this discussion, let me first suggest you watch this video explaining Neoliberalism:
Part 1
Part 2
The video presents an experiment that provides a visual way to understand what Neoliberal policies mean. Here's another way to see the big picture:
In the best of times, many African American communities are forced to tolerate levels of unemployment unseen in most White communities. The 2001 recession pushed the White annual unemployment rate up from a low of 3.5% in 2000 to a high of 5.2% in 2003. During the same period, the Black unemployment rate shot up from 7.6% to 10.8%.
LINK
And now? Unemployment rates last month for Whites stood at 8.5 %. Unemployment for Blacks was 15.8 %. I should point out that Latinos are fairing poorly as well. I will attempt to discuss the Latino and Latin American experience in separate diaries regarding Neoliberal policies. For Latinos, unemployment is at 13 %.
LINK
In other words, things are getting worse. For example, when you read about economic inequality, part of that picture is a racial one:
Across a range of economic indicators including measures of employment, poverty, housing, income and wealth, Blacks were much worse off than Whites. If Whites scored 100 percent on such measures, Blacks scored just 56.8 percent...
Three times as many U.S. Blacks as Whites live below the poverty line, defined as an income of $20,000 for a family of four. The disparity between the races on unemployment narrowed slightly, but Blacks were still twice as likely to be jobless.
LINK
Some may point to the 90s regarding race to demonstrate that Neoliberalism has not harmed people of color. In the late 90s, we were making gains. However, the gains seem to be related to other historic trends rather than being caused by Neoliberalism.
For example, the 90s saw the first full generation after Jim Crow had fully been dismantled. Moreover, I suspect this is because of issues like educational gains as described in this link, which were longer term processes:
Since Dr. King's death, the African American high school graduation rate has increased by over 214%. At this rate, African Americans will reach equality with White Americans by 2018.
LINK
Neoliberalism was not yet fully having its effects on the economy. Additional factors of historic transition provided a more likely cause for growth rather than anything that’s actually repeatable under fully realized Neoliberal policies.
What was clearly having an effect was the Internet growth that was a result of government policies from several decades earlier. Both the initial real boom, and later the bubble caused by Wall Street speculation. In addition, the Cold War had ended so the U.S. was the dominant super power of the decade. Finally, oil prices were extremely low, especially compared to now, where we face a challenge in keeping cost down due to the growth of China as an economic power.
There were so many forces at play in the economy at the time that attributing short term gains to Neoliberalism seems unlikely and more likely that the 90s were a one-off as far as the confluence of historical shifts all happening at once and providing a boost for African-Americans is concerned. The 90s are not likely repeatable. And, what we think of as the booming 90s were a correlation rather than caused by Neolibral policies of Reagan, Bush I and Clinton. If someone wants me to dig deeper into this argument, that can be the subject of a different diary.
This is not to say Clinton and the Democrats had no effect on the economy. “Far Leftist” Clinton probably had a great deal of impact on lower classes when he raised taxes on the highest income earners. This meant a fiscal policy that included surpluses and greater economic stability.
However, Neoliberal Clinton probably had a long-term net negative impact. First, NAFTA, the long term effect of which we are currently experiencing in the form of our failing jobs economy, was a major advance in the Neoliberal chess game being played on our economy. Second, his Neoliberal deregulation binge of the late 90s, set up the crisis that Bush II would later contribute to from 2001-2008.
Indeed, for African-Americans, Clinton touted the deregulation as a way for Black homeownership just as Neoliberal policies now are being pushed as a way to help the unemployed. One of the unfortunate long-term tactics of Neoliberalism is to use the very economic crisis that it likely created to justify more Neoliberal policy advances.
This is the point where the ideology becomes a faith. Neoliberalism can never fail. We can only fail Neoliberalism.
Clinton’s deregulation ticking time bomb would a decade later become the subprime market. This market became a way for banks to discriminate against Blacks with loans that were designed to fail. The policy offered to “help” people of color became a force that would harm both people of color and harm the greater economy. (I will cover Subprime Racism in a later diary).
This crisis created by Neoliberal deregulation became an excuse for further Neoliberal advances like allowing too big to fail to continue and furthering tax cuts that had not previously produced economic growth. Both of which ensure future crisis that I am sure will require further Neoliberal policies. This is the long game.
For more on the subject of using crisis, one should read Naomi Klein’s Shock Doctrine.
These Neoliberal failures followed by more Neoliberal policies do not require a great conspiracy. It merely requires that one is a true believer who will follow the doctrines of the Neoliberal faith consistently regardless of outcome of prior attempts to follow the policies. If the only “serious policy” choices are Neoliberalism, then it creates it own scheme or inertia for moving forward. That’s the “efficient” elegance of our present political predicament.
To fully, understand the longer term impact of Neoliberal policies, it is important to perhaps look at the picture over the last 30 years versus focusing on one 8-year period during which Neoliberals were enacting their policies.
To this end, one should read the following diary by Paul Rosenberg at OpenLeft:
LINK
In one of his graphs, he points out Median House Hold Net Worth from 1982 to 2004 based on race: (a) In 1982, for Whites, it was $82,900 and for Blacks, it was $5,500; (b) In 2004, for Whites, it was $118, 300, and, for Blacks, it was $11,800.
I did not check to see if these figures were in real dollars. It is unlikely that it is. Some of these differences, as I previously mentioned are historical. Paul Rosenberg explains the historical trend.
(1) The pre-existing racial disparities in wealth and income dating back to the pre-Civil Rights Era.
(2) The sharp break between pre-1975 liberal economics and post-1975 conservative economics, after which economic advancement was sharply concentrated amongst the more affluent, and particularly the super-rich.
(3) The concentration of wealth-promoting policies on those who need it least-those who are already among the most affluent of all Americans.
LINK
The key thesis here is that even as Blacks were just about to make strides after the end of Jim Crow, the Neoliberal economic assault was just gearing up. Thus, gains that may have occurred were killed off in their infancy.
In the article, Rosenberg also posts data regarding the Clinton era that substantiates my view that his era was a one-off rather than something repeatable in the long run because Neoliberal policies make such a long term unlikely to happen rather than more likely. This theme- more destabilization rather than less- is one that will repeat itself throughout this series.
Indeed, the White middle class is finding itself being consumed by Neoliberal policies although they have not yet identified the culprit. Having come for people of color, White middle class voters are next. But, that's the subject of another diary. This diary does not do justice to the complicated subject alone. It is meant as an introduction to the issues. Indeed, a full accounting and review would require several books. For example, what will happen to people of color as Neoliberal policies squeeze the White middle class?
If you are to take one thing from this diary, it is that scarce resources results in harm to people of color. This seems to be a a fact both historically, and as data demonstrates, in recent history. One may question whether Neoliberals are at fault for this, but one can not question, I believe, that fundamental argument about scarce resources.
Consequently, if Neoliberalism harms the economy rather than helps it in the long term, the result of such policies plus scarce resources, would be to harm people of color. Oprah or no Oprah.
I would like to thank Richard Lyon for our multiple email exchanges over the past few months on economic issues.
Next Diaries:
Katrina: A Perfect Neoliberal Storm
Subprime Racism
Latin America in the 90s, Latin America Now!
And more.
Additionally:
Richard Lyons and I authored a series of diaries about capitalism as an inherently unstable system. I posted the first diary, Canaries in a Coal mine, Capitalism is Inherently Unstable, the Introduction, on Sunday. I hope you will drop into check it out as well as the upcoming article on Employment