There weren't "consensus liberals". A new generation of Democrats in the 1960's screwed up economic policy. FDR and the New Dealers bequeathed to the next generation an economy that served as a power force creating a middle class nation out of a highly stratified nation before 1929.
They did this by putting monetary policy into the hands of the Treasury Department working alongside the Federal Reserve via the Gold Reserve Act of 1934. In October 1979 Democrats formally abdicated any responsibility for economy and handed it over the Fed. The Fed are *bankers* they work for the financial class, and since then our economy has been operated with financial interests first and foremost.
The reason Democrats did this was they failed to take their economic management job seriously.
As a result they lost the FDR dispensation under which the New Deal Order was built. In 1980 Reagan was elected and the 1988 election confirmed he had established a new dispensation.
Democrats were crushed in the 1984 and went on to lose in 1988 and had become a laughingstock. In response the Democratic Leadership Council (DLC) was formed. In the terminology oif Stephen Skowronek's Political Time model. the DLC was Democrats realization that a new dispensation was here and they needed to start playing the politics of preemption if they ever wanted to be political relevant again. Republicans had made this same adjustment after their surprise defeat in 1948. Their next president (Eisenhower) strongly asserted that Republicans could not except to under the New Deal (an acknowledgement of the power of the FDR dispensation) and would have to be moderates (i.e play the politics of preemption). Clinton did the same thing, even acknowledging at the time that he was boxed in, forced to be "fucking Eisenhower."
This is no consensus. it is acknowledging *defeat*.
You write "Their basic economic insights weren't wrong—markets do generate prosperity, innovation does solve problems, global trade does create value"
I would point out that we already had markets and innovation before 1980. And as for global trade, why is creating value (i.e. stock market capitalization) preferable to rising living standards for all, which was the previous objective of economic policy?
You write "The neoliberal reforms of the 1980s and 1990s weren't inherently wrong. Many government regulations had become inefficient and counterproductive. "
Yes they were, but the relevant aspects of neoliberalism have little to do with regulation, and much more to do with tax policy. Tax rates affect economic *culture* as well as their short-term economic effects (i.e. what economists study). Higher tax rates have a short-term negative effect on growth, leading people to believe that lower taxes promote growth. However higher tax rates can have a longer-term positive effect on growth due to cultural shifts, which manifested during the postwar years.
There weren't "consensus liberals". A new generation of Democrats in the 1960's screwed up economic policy. FDR and the New Dealers bequeathed to the next generation an economy that served as a power force creating a middle class nation out of a highly stratified nation before 1929.
https://mikealexander.substack.com/p/some-observations-on-the-election#:~:text=Working%20class%20voter,class%20(WC)%20wages
They did this by putting monetary policy into the hands of the Treasury Department working alongside the Federal Reserve via the Gold Reserve Act of 1934. In October 1979 Democrats formally abdicated any responsibility for economy and handed it over the Fed. The Fed are *bankers* they work for the financial class, and since then our economy has been operated with financial interests first and foremost.
The reason Democrats did this was they failed to take their economic management job seriously.
https://mikealexander.substack.com/p/how-the-new-deal-order-fell
As a result they lost the FDR dispensation under which the New Deal Order was built. In 1980 Reagan was elected and the 1988 election confirmed he had established a new dispensation.
https://mikealexander.substack.com/p/my-take-on-the-election#:~:text=I%20have%20been,one%20in%201932.
This gave us the Neoliberal Order, which is very much NOT over.
https://mikealexander.substack.com/p/why-i-dont-think-neoliberalism-is
Democrats were crushed in the 1984 and went on to lose in 1988 and had become a laughingstock. In response the Democratic Leadership Council (DLC) was formed. In the terminology oif Stephen Skowronek's Political Time model. the DLC was Democrats realization that a new dispensation was here and they needed to start playing the politics of preemption if they ever wanted to be political relevant again. Republicans had made this same adjustment after their surprise defeat in 1948. Their next president (Eisenhower) strongly asserted that Republicans could not except to under the New Deal (an acknowledgement of the power of the FDR dispensation) and would have to be moderates (i.e play the politics of preemption). Clinton did the same thing, even acknowledging at the time that he was boxed in, forced to be "fucking Eisenhower."
This is no consensus. it is acknowledging *defeat*.
You write "Their basic economic insights weren't wrong—markets do generate prosperity, innovation does solve problems, global trade does create value"
I would point out that we already had markets and innovation before 1980. And as for global trade, why is creating value (i.e. stock market capitalization) preferable to rising living standards for all, which was the previous objective of economic policy?
https://mikealexander.substack.com/p/what-is-neoliberalism-an-empirical#:~:text=Neoliberalism%20is%20not%20about%20economic%20growth%3B%20it%20is%20about%20growth%20of%20financial%20wealth
You write "The neoliberal reforms of the 1980s and 1990s weren't inherently wrong. Many government regulations had become inefficient and counterproductive. "
Yes they were, but the relevant aspects of neoliberalism have little to do with regulation, and much more to do with tax policy. Tax rates affect economic *culture* as well as their short-term economic effects (i.e. what economists study). Higher tax rates have a short-term negative effect on growth, leading people to believe that lower taxes promote growth. However higher tax rates can have a longer-term positive effect on growth due to cultural shifts, which manifested during the postwar years.
https://mikealexander.substack.com/p/how-economic-culture-evolves
https://mikealexander.substack.com/p/why-progress-seems-stalled#:~:text=The%20question%20is%2C%20why%20have%20things%20evolved%20in%20this%20way%20since%20the%20advent%20of%20the%2021st%20century%3F