- What is neo-liberalism?
Neoliberalism is a policy model of social studies and economics that transfers control of economic factors to the private sector from the public sector. It takes from the basic principles of neoclassical economics, suggesting that governments must limit subsidies, make reforms to tax law in order to expand the tax base, reduce deficit spending, limit protectionism, and open markets up to trade. It also seeks to abolish fixed exchange rates, back deregulation, permit private property, and privatize businesses run by the state.
Liberalism, in economics, refers to a freeing of the economy by eliminating regulations and barriers that restrict what actors can do. Neoliberal policies aim for a laissez-faire approach to economic development.
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Let’s begin by rewinding to 1992. After 12 long years of Ronald Reagan and George H.W. Bush, Bill Clinton was elected president with Democrats in charge of both houses of Congress. Trifectas like that had once been commonplace. Throughout most of American history, it was more common to have them than to have divided government. But from 1968 up until Clinton’s 1992 election, only Jimmy Carter’s four years in office had seen a unified government. So Clinton’s trifecta was a big deal, and he was ambitious to get things done. Unfortunately, one of those things was NAFTA.
In fairness, Clinton didn’t dream up NAFTA. Ronald Reagan did. He didn’t negotiate or sign it. Bush did. But he did get it passed through Congress, twisting scores of Democrats’ arms as a symbol of his “pragmatism” in moving the Democrats back to the so-called center. (It’s worth recalling that billionaire H. Ross Perot, who ran for president as a pragmatic centrist independent, opposed NAFTA as one of his central campaign planks.)
The irony here was twofold: First, in the real world, Democrats clearly occupied the political center during the Reagan-Bush years, dominating the House as well as a majority of state legislative bodies and retaking the Senate in 1986. What’s more, NAFTA was deeply unpopular with the Democratic base and their representatives. In the House roll call vote, Democrats opposed the treaty, 156 to 102, while Republicans overwhelmingly supported it, 132 to 43.