NeoLiberal Democrats on the Economy

NeoLiberal Democrats on the Economy

Overview

Kevin Drum hates the term neoliberal.  Yet I find that it matches his brand of thinking very well, and is emblematic of the status quo (e.g. Hillary) wing of the Democratic Party.  This is where I come from, although I moved to the Bernie camp last year (progressive), and the two groups are having major arguments these days.

Drum has a large following at Mother Jones, and I am a regular reader of his blog, although I frequently disagree with the folks there and am something of an outsider now.  Anyway, in the last couple of days, he has made a couple of comments regarding the economy which are representative of my disagreement with Drum and his wing of the Democrats.

Financial Sector is Healthy

Drum:

On a variety of measures, financial sector performance is cranking along this year at the very-healthy-but-non-bubble values of 2003.  

Sources: Employment via Bureau of Labor Statistics; stock performance via Financial Select Sector SPDR Fund via Google Finance; earnings via Yardini Research.

My instinctive reaction, based upon long standing disagreements with Drum and the consensus, is that something is wrong in an economy where stock prices grow much faster than the economy.  Drum uses "employees" as a proxy for the economy, which is probably not the best choice.  To show that stock prices are reasonable, he shows that they are in line with earnings.  I also disagree with this logic.

I hope to revisit this later, but for now I still disagree vehemently with Drum’s assertion that the financial sector is healthy.

Death of Malls

Drum:

For some reason, the death of malls is suddenly an obsession of newspapers everywhere. I’m not sure why

He goes on to point out that electronic commerce growth is accelerating.  I find it odd that he questions the newsworthiness of the death of malls.  Surely this is a big deal in terms of employment, use and value of real estate, and has many societal implications.

My Worst Nightmare

I'm not a big fan of the NY Times -- take a look at this and let me know what you think:  Lee Camp: How to Write Propaganda for the NY Times – As Demonstrated in an Article About Me

With regard to the specifics regarding Trump and the Republicans, my opinion is that they are both headed for electoral disaster.  As Leonhardt (Weak Trump, Strong Paul Ryan) and Chait (why Republicans won’t impeach Trump) make clear, Trump has abandoned many of his campaign promises to the relatively numerous working class.  Tomasky (the backlash in Kansas) points out that the Republican Kansas legislature has just overridden Governor Brownback's veto and passed a sizeable progressive tax increase.  And today we read that Austerity is over, May tells Tories:

Theresa May is poised to bring to a close seven years of austerity after Tory MPs warned that they would refuse to vote for further cuts.

Republicans and Tories like power, and generally this is attained by cozying up to the wealthy.  But, occasionally, maintaining power requires more populist measures.  We may find ourselves confronting big-spending Republican budget busters -- my worst nightmare.  While Dems are consumed (unproductively) with Russia, Republicans may take the political high ground.

So Leonhardt's missive is encouraging in the sense that Republican legislators seem to think that passing tax cuts for the wealthy is a winning electoral strategy, and they are probably wrong in that regard.

All opinions expressed above may well be wrong (c:

Progressive Tide About to Come In

Progressives are knocking on the door to governance in the U.K. (Corbyn), U.S. (Sanders), Spain, Italy, and France.  Trump is a last gasp for the conservatives, and the centrist social-democrats are weak everywhere (Clinton, UK Labour, French Socialists, etc.).  In my opinion, it's only matter of time before the dam breaks and change sweeps across the western world.