The Neoliberals Seek Their Revenge For Questioning the Market God

This week, The New Republic's two editorials were both on the illegal immigrant debate, and how it's shaping the upcoming election. Peter Beinart, TNR's editor-at-large and pseudo-expert on Islamofascism (The Good Fight), takes the opportunity to take a jab at Thomas Frank, somewhat inexplicably, on this front.

"Who is the most left-wing commentator on mainstream television?" Beinart asks in this week's TRB column. "Keith Olbermann? Bill Maher? Not even close. I'm talking about a man who says both parties are 'bought and paid for by corporate America,' and calls lobbyists 'arms dealers in the war on the middle class.'"

Beinart goes on waxing poetic: "This latter-day William Jennings Bryan denounces the 'corporate supremacists' in Congress who write 'consumer-crippling bankruptcy laws, pass job-exporting free-trade deals, and raise the interest on college loans. He peppers his economic analyses with quotes from the labor-supported Economic Policy Institute. And he recently called the GOP's effort to link a minimum-wage hike to a repeal of the estate tax 'obscene.' I refer, of course, to Lou Dobbs."

Now, it should come as no surprise that, in the high-stakes ratings game of the 24-hour news networks' ongoing struggle for infotainment supremacy, an anchorman would stake out demagogic positions sure to appease the philistine masses eagerly eating up another day's worth of outrages. Anderson Cooper played the sensitive type at Katrina; Geraldo played badass in Baghdad; Bill O'Reilly tackles the real issues facing America (i.e., berating lawyers representing child sex offenders; does the guy even talk politics anymore? Did he ever?); so why should Lou Dobbs--formerly of Moneyline fame--be any different, and how exactly does this relate to Thomas Frank?

Apparently, because this is exactly the sort of person Thomas Frank has been demanding.

"For years, writers like Thomas Frank, author of What's the Matter with Kansas[?], have argued that what liberalism needs is a strong dose of populism. From Joseph McCarthy to George Wallace to Bill O'Reilly, the modern American right has defined itself against cultural elites. Liberals, Frank and others argue, must fight fire with fire: attacking economic elites with as much gusto as the populists of old."

Now, ever since the 1990s, The New Republic has repudiated its leftier past and embraced a Clinton-centric brand of neoliberalism: free markets, free speech, free elections. It's a perfectly valid philosophical position (and a much older one than Clintonism: Britain's The Economist was founded on the principle that free markets would help end slavery, and across the pond, "liberal" remains synonymous with free-market ideology), but sometimes--as Frank's own journal, The Baffler, has pointed out--the good-sense philosophy of liberalism gets wrapped up in an ideology every bit as compelling--and self-deluded--as Communism or Fascism. (Don't take the comparison too far, though: we're talking ideology, not its outcome; I don't want to overstate my case here.) And this is where Beinart is coming from: a paranoid, marginalized neoliberal front that is looking to lose--and lose hard--in upcoming elections, as the progressive wing of the Democratic Party starts flexing its muscles (Beinart used this same space back in August to defend Joe Lieberman against exactly this sort of payback). So Beinart here is really just fearmongering and smearing political opponents to his left as The New Republic's coterie struggles to survive in a rapidly changing political environment.

"So why aren't liberals cheering? Because, for Dobbs, taking on corporate America means taking on corporate America's thirst for illegal-immigrant labor. Dobbs is downright obsessive about the issue, and he isn't above nativist scare-mongering--calling Mexican illegal immigrants an 'army of invaders' who are bringing leprosy and malaria across the Rio Grande."

Sadly, as Beinart goes on to note, some are (Mother Jones, In These Times, but then who ever accused them of being good?). But the riposte to Frank is disingenuous.

As I've mentioned a number of times before, I find it strange how the political establishment responds to Frank; it's as if they can't accept that a liberal isn't a true-blue Democrat politico through-and-through. I don't mean to claim that Frank's some sort of visionary (What's the Matter With Kansas? is good, but not that good), but it's as if the commentariat refuses to accept that his book wasn't about what Democrats should be doing in order to win, so much as about trying to change the political discussion away from singing the praises of the free market and generating a healthy dose of skepticism regarding its shortcomings. Frank has plenty of scorn for Clinton, too; after all, it was Clinton and his neoliberal cohort that oversaw the rise of a faith-based market liberalism that Frank once dubbed "the God that sucked." Franks' thesis in What's the Matter With Kansas? had precious little to do with Democrats at all; instead, it was the story of how moderate (not populist) Kansas Republicans were overthrown by extremists. The extremists rose to power on the backs of the religious, blue collar right, but were beholden more to the rabidly anti-government, anti-tax, economic libertarian right. Frank argued persuasively that by using wedge issues to excite an evangelical base, right-wingers were overthrowing moderates while conversely working against the economic interests of their base and never actually coming through on their socially conservative promises to end abortion.

But when the D.C. commentariat read it, what with their inability to see politics as anything but an electoral struggle between Dems and Republicans, they saw it as a story of how Republicans were baiting-and-switching, and a call for Dems to appeal to economic populism to win elections. And given neoliberals' (like those at TNR) fear of retreat from economic libertarianism, that scenario was to be avoided like the plague. Hence Beinart's smug criticism of Frank's supposed populist position. Talking heads like Beinart fail to note that some of the heroes of Frank's book are moderate Republicans, honest politicians taken down by populist demagoguery and brutal electoral tactics (including anti-Semitic smear campaigns). And this is the same guy Beinart claims wants Democrats to engage in populist rabble-rousing? I think he confuses Populism with populism; Frank does have a lot of fondness for his state's Populist past (and it's true that the former more than occasionally engaged in the latter), but it stems largely from nostalgia for a time when the people stood up for economic equality against entrenched business interests.

So Beinart tries playing the immigrant card; good-hearted liberals, after all, are all on the side of immigrants, whilst economic populists, riled up by job-insecurity, are out for blood. It's an unfortunate fact that this is often the case, but not insurmountable for liberals of Frank's persuasion. The mistake Beinart makes it playing off electoral politics against questions of intelligent policy.

"[M]any Democratic challengers are staking out immigration positions to President Bush's right. And Democratic incumbents are doing the same thing. As The New York Times has noted, 62 Democrats backed the House's enforcement-only immigration bill this September, up from 36 who supported a similarly tough bill last year. And, in the Senate, a large majority of Democrats just voted to build a fence along the Mexican border. As Democratic pollster Stan Greenberg recently told The American Prospect's Harold Meyerson, the themes working best for Democrats this year among rural voters have 'a strong nationalist component,' particularly on 'trade and immigration.'"

For a neoliberal, it's bedlam, and for a decent liberal, it's disappointing to see the Democrats playing the race-card (no white Polish plumbers for us; the economic line here is also a skin-color one). But we need to be careful to distinguish intelligent economic policy that runs contrary to the neoliberals' agenda from simple demagoguery and race-baiting. In this case, the neoliberals are full supporters of immigrant workers to feed the economy's need for cheap labor. The magic of the New Economy, after all, was the juggling act between keeping growth high and inflation low, by making sure that the labor market never got too constricted so that it would push up wages. Neoliberals like Beinart love this stuff; folks like Thomas Frank and myself know full well that this magical agreement meant that the benefits of economic growth never made it to the majority of workers. In the last few years, we've heard a lot about the economic recovery (since the 1999 tech bubble bust) that denied gains to workers while stock prices and corporate profits exceed the halcyon days of the late 1990s. But that rests on the myth that the economic boom of the 1990s benefitted workers more than our current recovery. Increasingly, the reality that the boom of the 90s didn't pass on any real economic gains to most American workers is being established by academics like Jacob S. Hacker (The Great Risk Shift; a nice review appeared in the Times Book Review this Sunday). In fact, the real wages of American workers have remained stagnant since the mid-1970s, so our current lackluster recovery doesn't mark a shift from so much as an extension of the way the economy has distributed wealth across demographics for the last 30 years.

So what does that mean? Well, it means that immigrant laborers are being screwed by being paid lower wages than Americans (and sometimes lower than the law allows), and the average American worker is being screwed because our jobs are being lost to lower wage workers, who are, as before, being screwed themselves. Does that sound like we're on opposite sides here? The neoliberals implicitly accept the good deal we get from immigrant labor; certainly they want ro curb abuses of migrant workers and expect a living wage, but fundamentally their position is, "Demand for these workers exists for a reason; let's not be hypocritical and respect that economic demand." They may criticize the president's plan for worker visas as not going far enough, but they don't support labor's attempts to change up the system by forcing companies to pay a living-wage to immigrant workers--that, after all, would mitigate the benefit of having them in the first place.

So this really is a situation in which the little guy loses out and the companies make huge profits; politicians then play the little guys off one another to win elections, and the companies get off free. I say, put the immigrants on the same level as natural-born Americans, prevent exploitative labor practices, and the demand for illegals begins to drop and a competitive labor market exists that does workers a lot better than the system we have now, which to one degree or another the neoliberals support. Fine the hell out of companies for employing illegal immigrants (why always the double-standard when it comes to tough-on-crime tactics with regard to corporate America?) and stop American companies from taking advantage of migrants and, in the process, putting Americans out of jobs. Beinart can't--or doesn't want--to see this; he's in love with the fairy tale that magically, this horrid situation will wind up benefitting everyone. The way of equitable economic policy does not necessarily lead to nationalist demagoguery; it's a low electoral tactic and nothing more, and we shouldn't let neoliberals like Beinart convince us to throw the baby out with the bath water.