Making Sense of Neoliberalism under the Trump Administration

14560057_10100345869476981_6430778352779005552_oTimothy M. Gill
Tulane University

In the wake of the Republican electoral victory an autopsy of the Democratic Party has ensued, and neoliberal economic policies have recurrently factored into these discussion. Several individuals, including Naomi Klein and Bernie Sanders, have noted that the Democratic Party requires a more substantive economic message than what Hillary Clinton offered to voters. In particular, Klein has castigated the Democratic Party for its embrace of neoliberal economic policies and pointed out that it must relinquish this relationship lest it continue to lose elections.

What is more, some have understood Trump’s victory as signifying the death of neoliberalism in the U.S. Cornel West, for instance, has argued that “the age of Obama was the last gasp of neoliberalism.” With the election of Trump, he says, “neoliberalism in the United States ended with a neofascist bang … [as his] lethal fusion of economic insecurity and cultural scapegoating brought neoliberalism to its knees.”

Trump might have condemned trade liberalization, but his administration is – on all other accounts – ready to implement an intensive, neoliberal agenda.

It’s true that Trump campaigned against free trade, and has since promised to target U.S. corporations that relocate overseas by implementing a 35% tariff on their imports. Free trade, however, constitutes only one component of the neoliberal economic agenda that has taken shape over the last several decades. Neoliberalism generally involves the removal of the state from the affairs of its citizens, with the exception of the security state. In addition to free trade, neoliberal economic policies have specifically included deregulation of the economy, privatization of formerly state-run and public enterprise, and supply-side economic policies that reduce the burden of taxation on corporations and the upper-class.

Following his election, Trump released a video detailing his primary objectives come January. He declared that he “will formulate a rule which says that for every one new regulation, two old regulations must be eliminated.” Here I offer an overview of the neoliberal agenda to come, broken down into key areas.

Financial regulation. The Trump team has said that it wants to dismantle the Dodd-Frank Act, which was passed in the wake of the 2008 financial crisis. Steve Mnuchin, the incoming Treasury secretary, has made rollbacks of the legislation his number one priority, including stripping “back parts of Dodd-Frank that prevent banks from lending.”

Energy. Trump has vowed to eliminate regulations on energy production and encourage drilling. He has planned to diminish carbon and mercury emissions limits on facilities fueled by coal, endorsed the Keystone XL pipeline, and sought a way to remove the U.S. from the 2015 Paris Agreement, which aims to reduce greenhouse gas emissions in an effort to combat global warming. And, in the most telling sign of environmental times to come, Trump nominated Oklahoma Attorney General Scott Pruitt to head the Environmental Protection Agency (EPA). As Attorney General, Pruitt has legally challenged EPA regulations and has even sued the agency over its requirements.

Medicare and education. Although Trump vowed to strengthen Medicare on the campaign trail, he nominated Representative Tom Price (R-GA) as his Secretary of Health and Human Services. Price is an outspoken opponent of the Affordable Care Act and has stated that Congress will pursue Medicare privatization efforts within a year after the Trump transition. Trump has also nominated philanthropist and school choice activist Betsy DeVos as his Secretary of Education. DeVos has long supported a private voucher system and charter schooling instead of increased spending for public education.

Taxation. Trump and his incoming administration support supply-side economic policies. Trump has asserted that he will reduce the corporate tax rate from 35% to 15% in order to spur growth. In addition, he has planned to consolidate the existing tax structure into three tax brackets. In doing so, though, some estimate that most benefits will accrue to the top 1%, including around half of the tax cuts proposed by his new plan. And finally, Trump recently nominated fast food CEO Andrew Puzder for Secretary of Labor. Puzder has been a vocal opponent of the Obama administration’s moves to increase the federal minimum wage, and he has praised the automation of work.

Military and police. While neoliberals have championed a small state they have often beefed up, and sometimes heavily utilized, their security forces, including the military and law enforcement. Under Reagan, the U.S. invaded the tiny Caribbean island of Grenada, and, under Thatcher, the U.K. waged war with Argentina over the Malvinas/Falkland Islands. For his part, Trump has loudly proclaimed his support for police officers amid criticism headed by Black Lives Matters protestors, and he has routinely promised to bring “law and order” back to the country. Following his election, private prison stocks indeed surged. As Trump has promised to prioritize the deportation of undocumented immigrants and made “law and order” a centerpiece of his campaign, investors are speculating that Trump’s policies will require even more prisons and detention facilities. And although Trump initially supported a cut to the military budget, he called for increased military spending throughout his presidential campaign.

In the end, while Trump has criticized broad and encompassing free trade agreements his agenda largely champions fairly standard, neoliberal economic policies: deregulation, privatization, corporate tax cuts, and a disproportionate amount of benefits for the rich. Trump, of course, has repeatedly defied predictions, but his projected policies offer no indication that neoliberalism is dead. Far from it, neoliberal economic policies are poised to thrive under the new administration.

In most ways then, Cornel West is wrong in his assessment of the state of neoliberalism in the U.S. We might, however, consider how to theoretically make sense of Trump’s economic policies given some existing differences. Indeed, his policies do not mimic the Reagan and Clinton brands of neoliberalism that championed free trade, and most of his policies are certainly not post-WWII neo-Keynesian endeavors.

Perhaps one way to understand Trump’s economic program writ large is as a nationalist form of neoliberalism that stops at the border. At the same time though, Trump is surely not opposed to international business and foreign direct investment, as he himself has invested and built properties in countries all throughout the world. So what is it that we are now witnessing?

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6 thoughts on “Making Sense of Neoliberalism under the Trump Administration

  1. This analysis assumes that what Trump aid in the campaign will in some way shape his Administration. So far, based on his appointments, it seems he will be the Paul Ryan Administration with racism and repression. The populist elements of the campaign will matter only if they lead a significant share of his supporters to feel betrayed and then to mobilize. Otherwise his populist promises will end up being as empty as those of Bill Clinton and to a lesser extent Barack Obama.

  2. Thanks Timothy–a useful inventory.
    (And it very much complements my own narrower commentary specifically about trade:

    I agree with Richard’s comment that it will be fascinating (if gruesome) to see what happens as some of the people who voted for Trump as a champion of the downtrodden realize the truth.

    On the other hand, I think it’s unhelpful for Richard to suggest that Obama accomplished nothing of value from a populist (in the sense of progressive/egalitarian) perspective. Obamacare, the fiscal stimulus, relative international harmony, serious action on climate change… these are important, and certainly wouldn’t have occurred under McCain or Romney.

    I would also say that one needs to be careful in taking neoliberalism as the rollback of the state. (I realize you qualify this a bit.) See Wacquant for example:
    “Most analysts invoke [“neoliberal”] to refer to a set of policies … entailing the retrenchment and reduction, if not dismantling, of the state in favour of the market… I contend that this is the ideology of neoliberalism, not its sociology. ‘Actually existing neoliberalism’ entails everywhere the reengineering of the state, indeed the construction of a strong state.”

  3. Hi Richard and Malcom – thanks for the comments. I very much agree there that there will be tension between what Trump has proposed (namely changes to NAFTA) and what he will do. Malcom’s post insightfully covered much of this terrain. My overall point was to push back on the rather absurd claim that neoliberalism in the U.S. is dead. Both Trump and his appointees have voiced support for neoliberal policies, and I don’t envision support for the sorts of policies I described above to be anywhere near as controversial as Trump’s position on free trade. In the end, the Democrats should have an excellent opportunity to hold Trump to his claims and where he doesn’t follow through to win back support from individuals that voted based on some of the economic promises he’s made.

    I agree with Malcolm that many of the changes under Obama wouldn’t have occurred under McCain or Romney. It’s important to recognize the real differences where they exist. I would, again though, push back a bit on how progressive Obama’s legacy is: extensive drone usage, record-level deportations, push towards TPP, and no serious movement on the Employee Free Choice Act, among other issues.

  4. I too agree that some of Obama’s accomplishments should be seen as progressive. Obamacare did deliver health insurance to 20 million people, though in a way that reinforces rather than directly challenges neoliberalism. The popular opposition to Obamacare was in large part the result of racism and misinformation fostered by Republicans, but the way the program was set up, above all the requirement to buy insurance from private companies also spurred anger. Similarly, Obama’s unwillingness to restructure mortgages and the inability to send a single banker to prison was the main fuel (besides racism) of Trump’s elevation to the presidency. Of course, Obama was a significant improvement on what McCain or Romney would have delivered, and we will miss him more and more over the next four years. However, his presidency did little to challenge neoliberalism and the weakness of his electoral coalition is a sign of that.

    1. Hi Richard – I agree with you on Obamacare and its reinforcement of neoliberalism. What are your thoughts on how Obama could have challenged neoliberalism, not just in health care policy, but in other ways too?

  5. I don’t think there was a political opening for a different sort of health care law- Obamacare was the only way to maneuver past interest groups controlling veto points. He could have challenged neoliberalism in two ways. First, he didn’t need to push for more trade agreements. Second, he did have an opening to challenge banks at the outset, not necessarily by nationalizing them, but by making them absorb cram downs on mortgages. His Administration also should have been much more aggressive at indicating financiers whose fraud contributed to the 2008 crisis. I think the fact that bankers got off scot free after 2008 is the biggest contributor to the feeling that Washington is fixed, the font of crony capitalism, and a swamp that needs to be drained. Obama’s passivity toward bankers did more than anything to elect Trump, which of course will deepen neoliberalism as he signs off on the tax cuts, privatization and deregulation the Republicans in Congress have been hoping and planning for, but couldn’t realize under Obama.

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