Wagenknecht and Bidenomics: Paradigm shift from neoliberalism to a New Keynesian Deal?

Wagenknecht and Bidenomics: Paradigm shift from neoliberalism to a New Keynesian Deal?

In her new book“The self-righteous”(Die Selbstgerechten)  Sahra Wagenknecht paints the 1970s as the home of common sense. And chase the left-liberal ghosts of today. Everything was better beforeWith her book, Sahra Wagenknecht seems to be steering forward into the past The US theorist Nancy Fraser has identified a prerequisite for the rise of right-wing populism in the alliance of neoliberalism and left-wing liberals. A “roaring permanent discourse about diversity”, according to Fraser, has suppressed the demands for social equality. The left must turn to social justice again, but without forgetting minority rights. Sahra Wagenknecht is also concerned with the question of why the social left is no longer capable of a majority. In her pamphlet “The Self-Righteous” she ties in with Fraser’s criticism and radicalizes it beyond recognition. Because with her, the poisonous neoliberalism and the only apparently philanthropic left-wing liberalism are almost the same. “The left-liberal narrative is nothing but a pimped up repackaging of the messages of neoliberalism. In this way, egoism became self-realization, flexibilisation became a variety of opportunities, and irresponsibility towards the people in one’s own country became global citizenship. ”Wagenknecht does not want to combine social justice and minority rights. Minority rights appear here as a left-liberal quirk that interferes on the way to the goal. It is a socially and ethnically homogeneous society with a lot of common sense. Left-wing liberalism, the toxic effects of which are extolled here, remains a vague phenomenon. Sometimes it is equated with radical identity politics, sometimes with urban milieus, sometimes with all center-left parties. This is how all cats turn gray. Even Gerhard Schröder appears as the progenitor of the lifestyle left, who combined „hypersensitive consideration in language issues“ with the „unleashing of profit making“. The EU as a useless agency of neoliberalism The ex-Chancellor, who considered women’s politics to be bogus, is doing at least half an injustice.

Wagenknecht throws a panoramic view of the state, democracy and the economy and asks how the bad present can become a bright future. The EU appears to be a useless agency of neoliberalism and is to be reduced to a “confederation of sovereign democracies”. This choice of words is reminiscent of right-wing conservative EU skeptics. Even the song of praise for the nation-state as the only vessel in which common sense can flourish has overlaps with conservative ideas. The same applies to the rejection of migration, which, according to the thesis, would cause damage in both poor and rich countries. In the world that is recommended to us here as better, nation states have the say, the economy functions more nationally than globally. And there is hardly any migration. Wagenknecht’s Arcadia is a republic without mosques, gender politics and quotas and is very similar to the Federal Republic of 50 years ago. The dutiful comment that the slogan “Back to the Seventies” is not really a “future blueprint” does not change anything. How much the author is drawn to the past is shown by her picture of the change from an industrial to a service society. In the golden age of industrial capitalism, useful products were still being made and virtues such as “work ethic, thoroughness, restraint and discipline” reigned. The creative economy, on the other hand, is „useless and often harmful“ and only produces marketing and surveillance technologies. Conservative narrative of decline and criticism of inequality So decay everywhere. In the orderly 60s and 70s, real people’s parties still ruled, and “measure and middle” was still something. Everything perdu. In this deformation narrative, the 68ers don’t come off well either. They were „wealthy middle-class children“ who made „the concept of achievement contemptible“. This repeats right-wing conservative criticism of the student movement. Conservative narratives of decay and criticism of inequality merge into a retro vision of communitarian community. It seems quite paradoxical that the common sense, which is invoked here as a remedy against divisions, is armed with a caustic, even divisive rhetoric against left-wing liberalism. It is completely out of sight that the negotiation processes in an individualized society, in which a quarter of the population has a migration background, must be more complex than in the FRG in 1970. Wagenknecht is an eloquent author. But even what is worth thinking about, such as the sketch of a market economy with strictly regulated property rights, is drowned out by a whistling whistle of self-righteousness. If we follow the ex-head of the left-wing faction, minority politics and a horde of moral apostles, who have hijacked the Greens, the SPD and, since their withdrawal, the Left Party, block a successful social left. “Fridays for Future” and “indivisible” are mocked as ridiculous feel-good movements by middle-class children as they pass by, while corona protests are treated with friendly words. This distribution of sympathy is astonishing for a top politician of the Left Party. Incidentally, one movement is missing – „Get up“(Aufstehen). This movement, which Wagenknecht helped initiate, came close to its social-communitarian program and failed miserably. Why? There is no word on this on 345 pages. The book is called „The Self-Righteous“. If you delete the plural, this is an appropriate title. In my opinion, Wagenknecht is right on some points, as criticism against neoliberalism, globalism, the EU, Islamism, gender language and political correctness . migration policy ala “Open borders for all”is legitime, but she goes definitly too far, and cannot explain why her own movement „Get up (Aufstehen)“ failed so brutally or why the workers at Amazon have now refused to found a union. Is it all just neoliberal confusion and result of multicultaralist identity politicans?  In any case, Wagenknecht has the wrong thrust when it attacks movements like Black Live Matters or Friday for Future as movements of only affluent middle-class children of a luxury class, but sees in the Covidiotic “Querdenken”movement the potential for a new movement. Sounds totally confused stuff of a angry not even really white woman. Wagenknecht wants back to the 60s or 70s, Meuthen to the 50s, Höcke to the 30s.

It would be interesting to know what Wagenknecht thinks of the new Biden adminisitration. Wagenknecht already critizised his foreign policy and for her he is just another US imperialst and war monger. However till now she has not commented how Biden combines diversity/identity policy and ecology with social policy and tries a synthesis and doesn´t perceive this poles as a contradiction and antagonism as Wagenknecht is doing. Biden´s economic program is as fundamental as Roosevelt´s New Deal, maybe a paradigm shift from neoliberalism back to Keynsianism. First there was talk of an economic stimulus package worth 1.9 trillion US dollars. Now another 2.2 trillion should be added, as Joe Biden recently announced – to spice up America’s infrastructure. The third coup will follow shortly – then the government will mobilize between one and two trillion to promote schools and health. Dizzying. What the new US president announces in his first few weeks actually has it all in sum – and some seem to worry that all of this could become far too expensive; or even lead to inflation because the country does not have that much capacity to implement these expenditures anytime soon. Maybe for a short time. However, the odds and ends are compared to what is hidden behind the big announcements – at least since Treasury Secretary Janet Yellen promised on top of all this this week to promote an international minimum tax for companies. There seems to be much more to all of this than just spending money somehow – rather a more fundamental turning point and an attempt to systematically address the long-term consequences left by the liberal free-market economic dogma with which Ronald Reagan began 40 years ago. Now, with the current US President, a philosophy of economy and globalization could replace an old one: Bidenomics instead of Reaganomics.

What Ronald Reagan started in 1981 in the wake of the British market preacher Margaret Thatcher has long had a lasting effect as a leitmotif: that the state cannot be small and slim enough, regulation disrupts, competition basically regulates everything, globalization is good because it creates pressure, and that people simply cannot perform properly without pressure; which is why only financial incentives or withdrawal help – and (almost) everything that is social only prevents you from performing. Nowhere has this been implemented as consistently as in the USA and Great Britain, the top models from market-liberal weddings. Taxes had to go down, at least on capital, because that was shy as a deer; States should compete for investors with ever lower tax rates – and tax havens were great because they increase the pressure. Wherever possible, it was important to privatize public services because private individuals can do something better and better. And to use the market against climate change – with high prices for CO₂-intensive management. There were, logically, social benefits to be deleted, because that supposedly makes people more willing to perform. And to disempower the unions so that the downward pressure on wages also increases and companies have more money for investments – which should ultimately benefit everyone. Promises  like lowering taxes on the rich, because the rich then do more for the poor people. Governments are of course not allowed to interfere when old industries go bankrupt, whether through new technologies or global cheap competition – if that causes social disruption, the market should regulate that too, and those affected should simply be flexible and mobile. Failed economic ideology Not that none of this had a positive effect here and there. It is only likely that there has not been a non-communist economic ideology for a long time that was so wrong at the same time and caused such dramatic damage. And which still fails miserably when faced with new challenges. Then the tax competition degenerated into that fiscally ruinous race to the bottom that the US Treasury Secretary described this week – and in which Ireland, the Netherlands and islets like Bermuda have enriched themselves as tax discounters at the expense of the others by global corporations with mini-taxes attracted. In the USA, according to Yellen, this race has resulted in companies paying less taxes than ever since the Second World War, as a percentage of economic output – a disaster for the common good.

Which in turn should explain why the USA – next drama – 40 years after Reagan’s start, relegated to the third-class country when it comes to public infrastructure. Whoever exempts so much taxes, of course, has no more money for anything else. Allianz Research estimates that $ 866 billion in public money would be needed to bring the US rail network up to the standards of the Netherlands, for example. And a good 300 billion to secure the power grid – greetings to Texas. All in all, the state would have to invest 1.4 trillion dollars in the infrastructure. One of the catastrophic consequences of Reganomics is that the share of the richest percentage of Americans in total income in the US has doubled from 10 to a good 20 percent since the early 1980s – while the proportion of the bottom half has doubled from 20 to around 13 Percent reduced: what a disaster for a dogma, according to which patting the rich via „trickle down“ should have led to the good of all.

The market doctrine also seems to have failed when it comes to climate protection – where it has meanwhile become clear that it is not enough to simply bet and hope for higher CO₂ prices. A lot of government investment is missing here too. Systematic processing of the damage list seems to be Bides economic program.. Then the plans act like a fairly systematic processing of the damage list. This should be ensured by the two trillion who are now going to improve the infrastructure – in roads, bridges, ports and rail lines. Allianz estimates that the money would be enough to close the gap by 2030. This also includes massive investments in charging stations for electric cars (however you could discuss if electro mobility is really so green) or more climate-friendly electricity – around half of the investment package that Biden is planning is classified as green by the experts. This is also a change of times, especially compared to the predecessor you-know-already. Various plans should help to close the gap between rich and poor again or at least not to let it grow further: whether through universal child benefit, which could soon act like a kind of guaranteed basic income for families; or the massive promotion of care jobs, debt relief for students, a far higher minimum wage and higher taxes for the particularly rich – or Biden’s declared commitment to ensuring that workers again organize themselves more strongly in unions in order to reduce the extent to which the weaker are exploited. What is new is Biden’s endeavor to create instances that are supposed to prevent whole regions from going bankrupt after the China shock, as was the case in the Rust Belt, and many people from falling socially. Keyword: industrial policy. According to the original doctrine of the Reagan masterminds, this is also an absurdity.

Janet Yellen has made it clear how much all of this is part of a departure from Reaganomics by declaring that the USA will raise taxes for companies and also advocate minimum international taxation – in order to reduce tax competition and the many tax havens which, like hardly anything else, reflected the slipped conservative-liberal dogma of sacred competition. It is still unclear whether all of this will come through – and how many compromises Joe Biden will have to make with those in his own party who are (still) reluctant to change. Even the huge sums of money should not be enough to make America as little unequal again as it was in the post-war period – before the Reaganomics came. It’s not just about state money, but also about better taming the financial markets. There were times in the United States when every additional dollar on extremely high incomes was taxed up to 90 percent (without communism breaking out or the world ending). Despite these limitations, Bloomberg columnist Noah Smith suspects, the tenor, breadth, and pace of Biden’s economic ideas strongly suggested „that we have begun a new paradigm“ – an era that could have as far-reaching as the one to them Reagan and Thatcher once stood. Just one that might end much better for people, the climate and the economy, because it corrects the historical nonsense of a mantra that was all too state neurotic and one-sidedly aimed at the privileged anyway. Bidenomics stop. As a replacement for Reaganomics. However, Biden shows how a left can combine social, ecology and identity policy and it would be interesting how Wagenknecht would comment this. However it remains to be seen if this is a lasting paradigm shift or if the Republicans or Trump or Pompeo (who is now commentator in Fox News and gets hyped by parts of the Republicans as new US presidential candidate for 2024) return and roll back the whole Biden program and return to neoliberalism or if in the event of a war only an arments Keynesianism remains and the social justice program is canceled as Lyndon B. Johnson´s Great Society during the Vietnam war.

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