If I should ask what the most prominent single feature of American politics is today, I suspect most would say it’s polarization, perhaps dangerous polarization. I would agree. It was with some pleasure, therefore, that I read in a recent article in The New York Times, “A New Centrism Is Rising in Washington,” about one major issue that Democrats and Republicans are actually coming to agree on.

The issue is neoliberalism, the dominant ideology in U.S. politics since the end of the Cold War, if not since Ronald Reagan, and specifically its faith in free trade. Free trade and smaller government, went the theory, would make Americans ever richer and create a new world order based on liberal values.

It didn’t quite work out. Only a few at the top are getting ever richer and the world has become more illiberal. Both parties are now recognizing the ideology’s failure.

During the 2016 presidential campaign, while Donald Trump exploited the fear and anger that neoliberalism had created, President Obama was negotiating yet another free trade agreement. Trump rode the mistrust to victory and trashed Obama’s plans. He then went on to rage against free trade and impose tariffs on friends and foes alike, with a particular antipathy toward China.

President Biden brought a more rational voice on trade, but has retained many of Trump’s policies on China and added both new policies and new tariffs. He has also brought to a screaming halt the neoliberal era of small government. He has spent massively on post-Covid stimulus, rebuilding infrastructure, climate change initiatives and promoting manufacturing. His policies have been highly successful in stimulating manufacturing construction by the private sector, as the graph on the right illustrates. Unemployment is at its lowest rate in 50 years with hundreds of thousands of new workers joining the workforce.

Trump’s rejection of neoliberalism not only didn’t hurt him politically, it boosted his popularity and made it easier for other Republicans to change their positions.

Americans may lean to the right socially but they lean left on economic policy. They support restrictions on trade, higher taxes on the rich, a strong safety net and policies that create good-paying jobs. When Washington’s free trade and small government policies didn’t deliver, large swaths of the electorate felt alienated. Biden and the Democrats are responding, and even many Republicans are getting the picture. Neopopulism is replacing neoliberalism.

Unfortunately all too much of the populism is of the right-wing variety, as exemplified by Donald Trump, who threatens to win this year’s presidential election. How ironic, and how tragic, if the political rewards for all the jobs and prosperity provided by the new manufacturing Biden’s policies are creating was ultimately realized by Trump.

Leave a Reply

Your email address will not be published. Required fields are marked *