Bloomberg: Middle-class Americans were "fleeced" by neoliberalism


#1

Originally published at: http://boingboing.net/2017/07/05/dont-get-fooled-again.html


#2

A big duh for anyone actually paying attention. As a gen-xer I never really thought I had it made that is for sure.
Also @doctorow once again I love the actual text for the link vs. the article title.


#3

He makes some good points, but I think he overestimates the number of Americans who participate in financial markets. From his perch on Wall Street it’s an easy mistake to make, but half of us have been harmed in entirely different ways.


#4

It’s never clear to me how much of the change in the net savings rate is due to some people changing their SAVING and how much is due to other people changing their BORROWING. Optimists borrow money. REAL optimists lend to them. Certainly when the savings rate went up during the RE bust, it looked like the causes were banks not approving new cash out refis and downgrading HELOCs as well as foreclosures in non-recourse states. But that was small counter current to the general trend that the more wealth is concentrated by the wealthy, the more that they are looking for “returns” on their wealth, so that lending it out looks more and more attractive. Now that the RE market looks less safe than it did, we’re seeing a spike in student loans, because that can’t be discharged in bankruptcy.


#5

Bloomberg: Middle-class Americans were “fleeced” by neoliberalism

And nothing will ever be done about it, gave up on that long ago.


#6

Yeah, I think Gen-X wasn’t so much fleeced, we just, stoically or cynically, got along however we could.


#7

According to Kim Stanley Robinson, it takes us until 2140 to finally overthrow predatory neoliberalism. That timeline was the most depressing thing about his latest book.


#8

That sounds like fleeced to these ears.


#9

If you voted for it, you were fleeced. If you didn’t, you were just fucked.


#10

“financial deregulation, tax cuts and a lax attitude toward consumer protection and antitrust.”

So, actually conservatism.


#11

To be fleeced, you need to believe the promises. Gen-X never believed the promises. Gen-X has the highest rate of entrepreneurism of all the current generations. I think that’s because many of us decided that the traditional path to success was closed to us.


#12

No one voted for those fees.


#13

The article suffers from the common problem of using “neoliberal” to mean “economics I don’t like.” To say the problem is neoliberalism is to say nothing terribly specific. The problem isn’t inherently neoliberalism as much as it is the manipulation of government policy to benefit a select few.

For example, an attempt to limit executives’ compensation backfired; corporations got around that by paying executives through stock options or other alternative means rather than through a straight salary. And thankfully, capital gains on these alternative arrangements are taxed at 15 percent, rather than the 30+ percent they would be as wages.

The answer to this question

Why did U.S. households save less and less during the neoliberal era?

Is answerable by “credit.” Middle-class households (even upper-middle-class households) were sold, and accepted, a lifestyle they couldn’t afford on wages alone. So they resorted to borrowing, either through credit cards or against the equity in their houses.

Some of the problems of the last 40 years have had to do with neoliberalism, like tax cuts and deregulation – although in some industries have benefitted from deregulation (which is why your airplane ticket is half as much as it would be, in real dollars, if the airlines were still regulated like they were in the 1970s). A lot of the economic problems, though, have less to do with neoliberalism and more to do with wealthy people finding loopholes and encouraging government action (the opposite of neoliberalism) that benefits them.


#14

[quote=“G_r_ld_z_n_r, post:11, topic:104052”]
traditional path to success
[/quote] always a good one. a friend stated there actually were leave it to beaver families and that vets rec’d free houses in the 50s and whites were never arrested for duis or rape. make it great again


#15

The amount of wishful thinking in the air in the 90s and 00s could have had beggars riding for a thousand years. But no one likes a Negative Nelly and politicians are cowards so the take-it-home-today-pay-for-it-tomorrow idiots are always the clever ones at any given moment.


#16

I see this gif is gonna get a lot of use:


#17

It’s worth re-visiting this classic podcast on the roots of the global financial crisis. Not much has really changed fundamentally.

There’s a lot of money floating around out there looking for investment returns. A lot more than most people can honestly comprehend ($70 Trillion dollars!). It’s the concentration and velocity that lands like a nuclear bomb on a market and eventually destroys it. Then like a massive cloud of locusts it goes on looking for new prey.


#18

I’m not convinced.

Very, very few people actual stand on principle to implement some pure version of something like “neoliberalism”, so the definition on wikipedia doesn’t really tell us what it is in practice. Communism was supposed to be rule by the scientists (not really, but people were supposed to make good decisions based on evidence available) and instead it was rule by the guy who will have you killed if you don’t do what he says. Neoliberalism in practice is people with money buying regulators. We could instead say that neither communism nor neoliberalism have been properly tested in the real world if that suited us better, but it wouldn’t change what people did in the name of those things.

Unrestricted free markets seem to concentrate money. Money is power and power accumulates. Once money is concentrated, using that money to buy political power is inevitable. In the mean time the mantra of society is “there is no such thing as society” so we excuse what would previously be thought of as crass or greedy behaviour by calling it “human nature”.


#19

Does this mean we can finally eat the rich?

I’m getting hungry.


#20

Modern economic systems aren’t an example of unrestricted free markets though. And nobody worth paying attention to thinks that such things are a good idea either, especially not the actual founders of what is correctly referred to as neoliberalism (e.g. Hayek and Friedman, the more radical liberals of that period, like Rothbard and Mises, had little or no impact on public policy). @fitzador is right, but I’d go further, the common usage of ‘neoliberalism’ is of no value in modern political debate, it’s little more than a leftist bogey word devoid of any real meaning.