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Conservative Economics of the Republicans; Neoliberalism of the Democrats!

Ever since the period of stagflation (slow growth and high inflation) in the 1970s, Keynesian economics and the role of government have been in decline. Economic theories emphasizing the importance of unfettered, entrepreneurial "free enterprise" replaced the role of government as the supposed engine of high growth, low inflation and low unemployment – all of which were thought necessary to remain competitive in the world economy. Variants of these theories were embraced by the business-oriented Republican party, and more conservative, business-oriented Democrats. These variants of Republican "conservative economics" and Democratic "neoliberalism" remain the dominant overall economic theories influencing Jimmy Carter, Ronald Reagan, Bill Clinton, both Bushes and Barack Obama (neoliberalism US style; neoliberalism towards other countries is much harsher). These "supply side" theories are dominant today, even though the financial bust of 2008, and the resulting "Great Recession" in 2008, temporarily brought Keynesian "demand side," massive government deficit spending back with a vengeance to try to deal with the continuing deep recession.

Giving free reign, with virtually no regulations, or only modest regulations, to capitalists, in order to maximize their profitability, even at the expense of gutting the US manufacturing economy, and dislocating millions of American workers, is now standard fare with both Republican and Democratic administrations.

Republican "conservative" economics and Democratic "neoliberalism" have much in common; and to some degree they differ. In outline form, you can decide whether there’s more than "a dimes worth of difference" between the two parties; or whether, in economic theory and policy, in essence, the two parties are basically "tweedle-dee" and tweedle-dum."

In this case, you can decide whether the two parties ultimately just represent the interests of big financial and corporate interests, at the expense of the rest of us, or whether one party places the interests of the average "Main Street" American, over the interests of "Wall Street."

Similarities/Differences: Conservative/Neoliberal Economics

Reaganism (conservative economics) – emphasizes free trade, deregulation, and protecting the rights of capital to exploit the lowest paid workers anywhere in the world; in the US, as a result, there’s been de-industrialization on a large scale, particularly in the "rust belt," with many premier companies always ready to move to countries with the lowest pay scales; this de-industrialization has resulted in large-scale unemployment, a corresponding significant reduction in wages for workers that are still employed; an industrialized working class once had wages that placed them in a secure solidly middle-class way of life, now the remaining working class struggles on significantly reduced wages and benefits, no longer even assured of a decent pension after a lifetime of hard work.

Conservative economics results in capitalism being given free reign in the upswing of a business cycle (with a corresponding privatization, of course, of profits); during the downswing, the crisis stage, the government may let companies fail (as happened, e.g., in the Savings and Loan meltdown in the early 1980s) or it may decide to bail out the most powerful financial institutions (Bush’s Secretary of the Treasury Paulson (formerly head of Goldman Sachs) giving Congress an ultimatum to bail out the largest banks, and investment firms on Wall Street (with the government, and the US taxpayers socializing wall Streets’ losses) – witness the Troubled Asset Relief Program (TARP); workers, on the other hand, are basically forced to fend for themselves as unemployment rises, and unemployment benefits remain small, and the time frame for workers to receive these benefits remains fairly short; under Republican conservative economics there is no real safety-net for workers (in a quite literal sense, workers are forced into a Darwinian survival of the fittest).

Conservative economics – exploitative capitalism without much of a human face

Clintonism, Obamaism (neoliberal economics) – also emphasizes free trade, deregulation (in post-financial crisis, and post-BP/Gulf crisis reintroduction of some regulations), protecting the rights of capital to exploit the lowest paid workers anywhere in the world. Just as supportive as conservative economics of "free tade," with little regard or enforcement of decent labor or environmental standards; resulting in de-industrialization in higher-wage countries; capitalism given free reign in the upswing of a business cycle (privatization of profits); during the downswing, the crisis stage, the state bails out the most powerful financial institutions and multinational corporations, witness Obama’s policies toward Wall Street (socialization of losses).

Neoliberal economics, as opposed to conservative economics, rather than workers having to fend totally for themselves, is willing to provide a basic safety-net of unemployment benefits, food stamps, job retraining, or college asssistance for jobs that may never come back to the US, the right to now access health-care, if you can afford it, or, depending on income, accessing health care with government subsidies.

The state will be used to try to mitigate crisis (stimulus, deficit spending, e.g.); but the state doesn’t challenge the right of capitalists to cause inevitable crises in the first place.

Neoliberal economics – exploitative capitalism with a more human face


Current neoliberal orthodoxy (with a reluctant return to bastardized Keynesian economics during the latest economic crisis – so that capitalism can quickly get back to "free market" principles once again) is minimumly preferable, given the fact that there are no other current alternatives to choose from, to "conservative economics" – if for no other reason than neoliberalism is prepared to deal with some of the negative effects of "free-market" capitalism on workers/the middle class (but, again, neoliberalism doesn’t challenge, and in fact encourages the workings of the so-called free-markets that caused/causes the crisis in the first place); while conservative economics is all about letting unfettered capitalism be, well, unfettered capitalism – to do, pretty much, whatever it pleases.

But let there be no doubt about it, both of the dominant Democratic and Republican economic orthodoxies continually prioritize the interests of capitalists/big business/the wealthy to run roughshod over the rest of us.

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