The (neo-liberal) Third Way infestation continues

“Fresh thinking delivered to your inbox – Subscribe”. That is the message on the homepage of Third Way an American think tank (aka conservative propaganda machine) masquerading in the public space as a “centrist think tank”. The problem is that this particular ‘think tank’ does not seem to do much fresh thinking, if thinking at all. According to the Politico article (January 17, 2017) – Democratic Party rethink gets $20 million injection – largely aimed to reestablish the narrative that allowed Bill Clinton and then Barack Obama to be elected as President. In part, this initiative is to head off the likes of Bernie Sanders and Elizabeth Warren (neither who are mounting what I call a fully progressive agenda anyway) and claw back the voters who abandoned the unelectable (my judgement) Hillary Clinton in favour of the (shouldn’t have ever been elected) Donald Trump. The narrative that the Third Way organisation has been engaged in for years is hardly fresh. They attack fiscal deficits and call for retrenchments of pension entitlements and public health care funding, they oppose single payer health care and, thus, favour pumping billions of public funds into private insurance companies who offer inferior services, and are strong advocates of the deeply flawed Trans-Pacific Partnership. There is nothing progressive about this group nor fresh. They are mainstream central and the fact they are spearheading a Democratic Party initiative to win back political support tells me that the Party has learned next to nothing from last November’s Presidential election.

When the media talks about a ‘centrist’ organisation these days there is a tendency to think of this reflecting a median sort of view – at the centre of the possible viewpoints along the ideological continuum (Left-Right).

This is the way that it was sometime before neo-liberalism took hold when centrism was a meaningful term.

LEFT —————— CENTRIST VIEWS —————— RIGHT

After years of neo-liberal propaganda, what goes for ‘middle-of-the-road’ these days is nothing like the views that would have been considered ‘centrist’ sometime earlier (depicted in my sketch).

Now the whole continuum has become distorted. The Third Wayers (Blairites) and the rest of the faux progressives have not only dislocated the Political Left from the True Left but also skewed the distribution of views to the right.

The Political Left is close to where the Right used to sit (the scales on my sketch are meaningful) and as a result, what is now termed ‘centrist’, has shifted dramatically to the right of the distribution.

The Right is now much more extreme than it used to be (particularly on economic matters).

TRUE LEFT ———————————————— POLITICAL LEFT——— CENTRIST VIEWS — RIGHT

Any organisation that calls itself the Third Way has to be suspect from the start given the association of the term to Blairism in the UK – the same person that lied to justify invading Iraq, which has created much of the mess in the Middle East that is now spilling over into Europe and beyond.

But, in fact, the Americans started it all when the, now defunct – Democratic Leadership Council – was established in 1985 as a result of the Party’s fear that it was becoming too progressive.

They didn’t cast it in those terms – instead they wanted to reverse what it considered to be a shift to the Left from the Vietnam protest days of the late 1960s.

They even had the audacity to create the Progressive Policy Institute in 1989.

Far from standing up to the neo-liberal onslaught championed initially by the release of the Powell Manifesto in August 1971, the Democratic Party started to shift to the right.

Please read my blog – The right-wing counter attack – 1971 – for more discussion on the Lewis Powell intervention.

By the time, Reagan was in power, the DLC was advocating free market economics (a misnomer at best).

Bill Clinton became their pin-up boy.

While Blair paraded under his ‘New Labour’ banner, Clinton campaigned (and was elected) in 1992 under a ‘New Democrat’ flag and immediately set to work with his pernicious welfare to work initiative (attack on the poor) and his pursuit of fiscal surpluses that, ultimately, ended, as they usually do, in recession some 8 years later.

The DLC lobbyed hard for the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (the welfare attack), strongly opposed single-payer universal health care (which just meant the private insurance companies continued to rip everyone off), supported privatisation of social security, and pushed NAFTA.

As in the case of Blair, they were vocal supporters of the illegal invasion of Iraq in 2003 and gave political succour to George W. Bush’s and his lies about WMD.

There was a remarkable article written by a senior fellow at the affiliated Progressive Policy Institute, one Marshall Wittmann, published by the Blueprint Magazine, an official publication of the DLC.

Wittmann was a major propagandist for the DLC and is a former staffer for Republican John McCain and deeply conservative (in the right-wing sense).

The article (October 7, 2004) – Moose on the Loose – launched a major attack on the then Democratic President contender Howard Dean, who was contesting the primaries against John Kerry and John Edwards.

Dean was staunchly opposed to the invasion of Iraq. Wittmann vilified him (as part of the DLC strategy) for being “a socially liberal, anti-war candidate”.

Dean’s campaign was destroyed from within, in much the same way that the campaign by Bernie Sanders was clearly undermined by the Democratic Party establishment.

Regular readers will know that I think one of the problems that the Left faces is dealing with the torrent of material that is pumped out by the Right-wing think tanks, which are very well funded by ex Wall Street types and other wealthy interests. It is very hard competing with that torrent.

The Left has never had access to the same level of funding (not even close to it) and has to run research and advocacy groups on the proverbial ‘smell of an oily rag’. I have spent most of my career trying to get a few dollars here and there to keep my research group going.

So I should support institutions that are established on the progressive side to take on this torrent of right-wing lies. And I do.

But the DLC was one of many organistions was not such an organisation. Its embrace of the Third Way politics was never going to be a viable platform for progressive ideas.

All that it created was some aborted amalgam of some progressive ideas (for example, supporting gays etc) with the vigorous embrace of ‘free-market’ economics that tilted the playing field towards financial capital and away from workers (and industrial capital, if the truth be known).

They supported privatisation and cutting government spending on the poor.

Earlier this week (January 15, 2017), the US celebrated Martin Luther King Day in memory of the great Democratic Socialist (his birthday). While it is a national holiday (federal), it is not universally a ‘paid’ holiday, which tells you something about priorities in that country.

But associated with that was this quote from a speech entitled ‘To Minister to the Valley’ that MLK gave in Miami sometime around the end of 1967, when he shifted his advocacy towards advancing economic justice:

Whenever the government provides opportunities and privileges for white people and rich people they call it ‘subsidies.’ When they do it for Negro and poor people they call it ‘welfare.’ The fact is that everybody in this country lives on welfare. Suburbia was built with federally subsidized credit. And highways that take our white brothers out to the suburbs were built with federally subsidized money to the tune of ninety percent. Everybody is on welfare in this country. The problem is that we all too often have socialism for the rich and rugged free enterprise capitalism for the poor. That’s the problem.

He obviously didn’t foresee the attacks that neo-liberalism has mounted on the working poor whites in the US and elsewhere, which have taken the attack on the poor across racial divides.

But the point remains.

Wall Street is a massive recipient of corporate welfare – government bond issues – and the occasional bailout when they stuff up (as in the GFC).

The disaffection of the working class voters in the US towards the Democratic Party began with the operations of the DLC and its associated organisations.

The shift to Trump began in 1985!

On December 8, 2004, The American Prospect magazine, published an Op Ed from commentator David Sirota – The Democrats’ Da Vinci Code – which mounted a vehement attack on the likes of the DLC:

… which has pushed the Democratic Party to give up on its working-class roots and embrace big business’ agenda. These New Democrats, backed by huge corporate contributions, say that the party must reduce corporate regulation and embrace a free-trade policy that is wiping out local economies throughout the heartland. They have the nerve to call this agenda “centrist” even though poll after poll shows it is far out of the mainstream. Yet these centrists get slaughtered at the ballot box, and their counterparts — the progressive economic populists — are racking up wins and relegating the DLC argument to the scrap heap.

He posed two questions:

1. “will party insiders see the obvious and finally follow their real leaders?”

2. “Or will they continue mimicking Republican corporatism, thereby hastening their own demise?”

We know the answer. Obama was elected due to the incompetence of George W. Bush but maintained the sort of DLC agenda that made it increasingly difficult to tell the difference between the Republican and Democrat establishment. The rabid tea party right is another story.

Interestingly, Sirota wrote (remember it was in 2004) that:

In Vermont, Representative Bernie Sanders, the House’s only independent and a self-described socialist, racks up big wins in the “Northeast Kingdom,” the rock-ribbed Republican region along the New Hampshire border. Far from the Birkenstock-wearing, liberal caricature of Vermont, the Kingdom is one of the most culturally conservative hotbeds in New England, the place that helped fuel the “Take Back Vermont” movement against gay civil unions.

Yet the pro-choice, pro-gay-rights Sanders’ economic stances help him bridge the cultural divide. In the 1990s, he was one of the most energetic opponents of the trade deals with China and Mexico that destroyed the local economy. In the Bush era, he highlighted the inequity of the White House’s soak-the-rich tax-cut plan by proposing to instead provide $300 tax-rebate checks to every man, woman, and child regardless of income (a version of Sanders’ rebate eventually became law). For his efforts, Sanders has been rewarded in GOP strongholds like Newport Town. While voters there backed George W. Bush and Republican Governor Jim Douglas in 2004, they also gave Sanders 68 percent of the vote.

Which reflects, in part, my point.

Leadership is about communicating ideas to people that engages them into activity. There is a viable Left-agenda that can be successfully disseminated if the political leadership has the courage to break from the Third Way mould and challenge the neo-liberal orthodoxy at its elemental level.

But then these same politicians would have to forego the personal largesse they get from financial capital. For most, that is a bridge too far.

In relation to the DLC, Source Watch tells us that:

… some of the early funding came from ARCO, Chevron, Merck, Du Pont, Microsoft, Philip Morris and Koch Industries

A fine assortment.

Their source, in turn, was a Newsweek story from August 21, 2000 – The Soul And The Steel – about Joe Lieberman (a Democratic Vice-Presidential wannabee), which noted that:

His selection may also complicate Gore’s efforts to depict Bush as a patsy for big business. Since 1995 Lieberman has chaired the Democratic Leadership Council (DLC), the centrist think tank that eschews liberal dogma and promotes market-oriented approaches to policy. Like many similar groups, the DLC (of which Gore is a founding member) has never disclosed its funding sources. But last week, in response to requests from NEWSWEEK, it turned over a list of top donors. If Gore still hopes to score populist points by bashing Big Oil and pharmaceutical companies that oppose his plan to add a prescription-drug entitlement to Medicare, he may have some explaining to do. Among the DLC’s biggest benefactors last year (contributions of between $50,000 and $100,000) were ARCO, Chevron and the drug giant Merck. Other big underwriters include Du Pont, Microsoft and Philip Morris (which has kicked in $500,000 since Lieberman became DLC chairman) … the money has helped ensure an open door to Lieberman. “We’ve been able to have a dialogue with the senator and his staff,” said Jay Rosser, spokesman for another DLC benefactor, Koch Industries, an oil-pipeline firm that is also a big GOP donor.

Which takes us up to the current day and the Third Way.

The political Left lost its way when it embraced this movement.

The Third Way Think Tank was established in 2005.

Like the DLC, it is funded by all the known suspects. This Nation report from December 3, 2013 – GOP Donors and K Street Fuel Third Way’s Advice for the Democratic Party – tells us that:

… the think tank is merely defending the special interest groups that allow it to exist … Deutsche Bank, Intel, the Business Roundtable, Amgen, AT&T, the International Swaps & Derivatives Association, MasterCard, New York Life Insurance, PhRMA and the US Chamber of Commerce, among others.

Its funding broker – a company called Peck, Madigan, Jones and Stewart is “a lobbyist for the government of New Zealand on the Trans-Pacific Partnership free trade deal; Third Way aggressively promotes the deal. Peck Madigan clients push for entitlement cuts, and so does Third Way.”

And so it goes.

A major health insurance company gives Third Way money as part of its “Yearly budget spent on lobbying activity … as part of its strategy for increasing its profit-making political influence”.

Third Way board members (who are also hedge fund executives) gave large funds to support the election of Mitt Romney.

The Nation says that:

There is a long and storied tradition of corporate, right-wing interests seeking to shape the economic policies of the Democratic Party. The DLC, another Third Way-style group that folded in 2011, was funded by none other than Koch Industries. Richard Fink, a strategist to the Koch brothers who helped found what is now known as Americans for Prosperity, was on the DLC’s board.

The Third Way is just another cog in the prostitution of the Democrats to financial capital and its attack on the working class.

They call themselves a “big tent movement” (Source) but the only ones who go camping in the tent are the top-end-of-town, while the rest freeze in the rain and cold.

Third Way has been particularly vocal in its advocacy of fiscal cuts.

On June 30, 2010, the National Commission on Fiscal Responsibility and Reform, which was created by Obama “to address our nation’s fiscal challenges” (a biased remit if there ever was one), held public hearings.

Jim Kessler, Vice President for Policy at Third Way gave – Evidence – claiming he was a representative of a “moderate think tank” – euphemism personified.

You will read the usual banter:

1. “we cannot afford it” – in relation to maintaining a safety net as the society ages.

2. “we cannot have long term, sustainable, robust growth with the deficit and debt levels that are forecast” by the CBO (which always inflates the deficit forecasts anyway.

3. “If we stick to this trajectory, we are deciding that it is best for the United States, and for our children, that we have a federal budget that is dominated by entitlements and interest payments. That would be a dangerous and devastating decision – for our economy, our national security and for vital investments in younger generations.”

4. “Washington must lead by example, and take the first hit – by reforming the federal pension system (which is funded by an outlandish $14 of taxpayer dollars for every one dollar of employee contribution) and by stopping the ridiculous rifle-shot spending that is rife in appropriations bills and the tax code.”

5. “we must put aside some of our ideological and partisan urgings”.

The last of those quotes is telling and exemplary of the way in which the neo-liberal infestation of the major political parties has sought to conflate differences of opinion into some sort of consensual acceptance of ideas such that fiscal deficits are bad and fiscal surpluses are desirable.

The same line goes that the Left-Right distinction is old hat – we have to move to a Third Way.

Just as Kessler (who clearly knows nothing much about macroeconomics) said:

… if we are going to transcend ideological gridlock, the path forward will require a “third way” – balancing spending cuts, tax increases, and investments in growth.

And so it goes.

Conclusion

And so the Democrats are promoting this organisation (Third Way) replete with $US20 million “to study how the party lost its way and offer a new economic agenda for moving forward” (Source).

Their campaign will be marketed as “New Blue” and is designed to “help Democrats reconnect with the voters who have abandoned the party”.

One thinks that the horse might have bolted. People are starting to see through this establishment conspiracy to distort income distributions towards the rich.

They are realising the orthodoxy is dudding them. The problem is that there is no progressive leadership to fill the void. That task has been left to the populist Right like UKIP in the UK and now, Donald Trump in the US, although I do not really think Trump will break the Wall Street shackles.

All of this makes the self-serving “Fresh Thinking” banner, that Third Way promotes itself under, look very stale indeed

The series so far

This is a further part of a series I am writing as background to my next book on globalisation and the capacities of the nation-state. More instalments will come as the research process unfolds.

The series so far:

1. Friday lay day – The Stability Pact didn’t mean much anyway, did it?

2. European Left face a Dystopia of their own making

3. The Eurozone Groupthink and Denial continues …

4. Mitterrand’s turn to austerity was an ideological choice not an inevitability

5. The origins of the ‘leftist’ failure to oppose austerity

6. The European Project is dead

7. The Italian left should hang their heads in shame

8. On the trail of inflation and the fears of the same ….

9. Globalisation and currency arrangements

10. The co-option of government by transnational organisations

11. The Modigliani controversy – the break with Keynesian thinking

12. The capacity of the state and the open economy – Part 1

13. Is exchange rate depreciation inflationary?

14. Balance of payments constraints

15. Ultimately, real resource availability constrains prosperity

16. The impossibility theorem that beguiles the Left.

17. The British Monetarist infestation.

18. The Monetarism Trap snares the second Wilson Labour Government.

19. The Heath government was not Monetarist – that was left to the Labour Party.

20. Britain and the 1970s oil shocks – the failure of Monetarism.

21. The right-wing counter attack – 1971.

22. British trade unions in the early 1970s.

23. Distributional conflict and inflation – Britain in the early 1970s.

24. Rising urban inequality and segregation and the role of the state.

25. The British Labour Party path to Monetarism.

26. Britain approaches the 1976 currency crisis.

27. The 1976 currency crisis.

28. The Left confuses globalisation with neo-liberalism and gets lost.

29. The metamorphosis of the IMF as a neo-liberal attack dog.

30. The Wall Street-US Treasury Complex.

31. The Bacon-Eltis intervention – Britain 1976.

32. British Left reject fiscal strategy – speculation mounts, March 1976.

33. The US government view of the 1976 sterling crisis.

34. Iceland proves the nation state is alive and well.

35. The British Cabinet divides over the IMF negotiations in 1976.

36. The conspiracy to bring British Labour to heel 1976.

37. The 1976 British austerity shift – a triumph of perception over reality.

38. The British Left is usurped and IMF austerity begins 1976.

39. Why capital controls should be part of a progressive policy.

40. Brexit signals that a new policy paradigm is required including re-nationalisation.

41. Towards a progressive concept of efficiency – Part 1.

42. Towards a progressive concept of efficiency – Part 2.

43. The case for re-nationalisation – Part 2.

44. Brainbelts – only a part of a progressive future.

45. Reforming the international institutional framework – Part 1.

46. Reforming the international institutional framework – Part 2.

47. Reducing income inequality.

48. The struggle to establish a coherent progressive position continues.

49. Work is important for human well-being.

50. Is there a case for a basic income guarantee – Part 1.

51. Is there a case for a basic income guarantee – Part 2.

52. Is there a case for a basic income guarantee – Part 3.

53. Is there a case for a basic income guarantee – Part 4 – robot edition.

54. Is there a case for a basic income guarantee – Part 5.

55. An optimistic view of worker power.

56. Reforming the international institutional framework – Part 3.

57. Reforming the international institutional framework – Part 4.

58. Ending food price speculation – Part 1.

59. Ending food price speculation – Part 2.

60. Rising inequality and underconsumption.

61. The case against free trade – Part 1.

62. The case against free trade – Part 2.

63. The case against free trade – Part 3.

64. The case against free trade – Part 4.

65. Moving on from the post-modernist derailment of the Left.

66. The (neo-liberal) Third Way infestation continues.

The blogs in these series should be considered working notes rather than self-contained topics. Ultimately, they will be edited into the final manuscript of my next book due in 2017. The book will be published by Pluto Books in London.

That is enough for today!

(c) Copyright 2017 William Mitchell. All Rights Reserved.