Behind the Left’s Tax Cut Freakout

Pity the poor liberal Democrats. Once upon a time leading Democrats understood the need for tax reform. It’s not necessary to go back to John F. Kennedy or even the bipartisan tax reform of 1986 to see this. If you paid close attention to Hillary Clinton ten years ago when she was still in the Senate, she noted publicly that our corporate income tax system needed reform, and even Obama declared that he thought the corporate income tax rate should be lowered to around 25 percent. But he never pursued the idea, even though it would have been an easy bipartisan achievement for him. What explains this resistance?

The mystery deepens when you realize that if even eight or 10 Democratic senators had decided to support tax reform and bargain with Republicans, they might well have been able to keep the state and local tax deduction beloved of insolvent blue states everywhere, and probably the Obamacare individual mandate. One thing a handful of Democrats would easily have preserved is the prohibition on oil exploration in the Alaska National Wildlife Refuge (ANWR), which has been the holy grail for environmentalists for nearly 40 years. By their intransigent opposition, Democrats were completely routed. What explains this shortsightedness, if not political incompetence?

The sudden liberal concern with the federal deficit is not to be credited, of course. And it’s long been true that liberals only like tax changes that are “targeted” at their favored interests, which is why they don’t like across-the-board tax cuts. A more likely reason is the political calculation that full-on “resistance” to Trump is a good political strategy if not a necessity. This is sound on the surface for two reasons: first, the increasingly leftist Democratic base would punish severely any Democrat who cooperated with Republicans on tax reform. Second, intransigence is seen as the best path back to power in the next election, and in the short term this calculation may prove out. Next November’s mid-term election may well be a Democratic wave for all of the usual reasons along with the unpredictability of how Trump’s unusual personality and performance play out.

But I think there’s a deeper reason emerging for why liberals have become intransigent and have moved even sharply to the left. Unfortunately you need to be embedded, as I am, deep in the cocoon of academia to make it out. If you hang around the intellectual left for very long, you discover they are obsessed today with “neo-liberalism.” Now, at first you might think that “neo-liberalism” is the left’s equivalent of “neo-conservatism”—that is, an updated form of liberalism adapted to new circumstances. In fact there was a self-conscious effort in the mid-1980s for give birth to a “neo-liberalism” that would be the counter to newly influential neo-conservatism. Charles Peters, the long-time editor of the Washington Monthly, edited a short book entitled A Neo-Liberal Manifesto, which was mostly warmed over Gary Hart speeches.

In fact the “neo-liberalism” that the left discusses today is an object of complete contempt, and is quite different from what Peters and other smart liberals meant 30 years ago. The term has well-neigh replaced “the bourgeoisie” in the lexicon of leftist class hatred. “Neo-liberalism” refers to the market-friendly policies of successful liberal politicians like Tony Blair and Bill Clinton—accommodations made of political necessity if the Labour Party and the Democratic Party were ever going to win national elections again. Recall that Clinton was for free trade and “ending welfare as we know it,” culminating in agreeing late in his presidency to cut the capital gains tax. As the liberal writer Richard Reeves wrote about ten years ago, “Wittingly or not, the Democrat [Clinton] who ran as the agent of change gave up after a couple of years and joined the Reagan revolution.” By 1999 Reeves’ capitulation was complete: “Reagan, in fact, is still running the country. President Clinton is governing in his shadow. . .” Tony Blair ostentatiously abandoned the Labour Party’s long-standing principle of nationalizing key industries, and when in office did noting to reverse any of the dramatic privatizations that Margaret Thatcher achieved.

Some on the left hated the Clinton and Blair accommodations at the time, but their electoral success was hard to argue with. But now that Republicans are back in charge, the left is chafing to get even with the compromises of “neo-liberalism.” This, more than his sexual peccadillos, is the main reason for the newfound hostility to Clinton on the left just now.

If you want to see how this works in action, check out this primal scream that appeared recently in The Guardian that my pal (and Power Line reader) Ben Zycher drew my attention to. The article starts off sensibly enough, noting that all of the “50 ways you can fight climate change” as an individual are just gimmicks of what we’d call “virtue signaling.” But then the author gets to the real problem:

Neoliberalism has conned us into fighting climate change as individuals

Martin Lukacs

. . . The political project of neoliberalism, brought to ascendence by Thatcher and Reagan, has pursued two principal objectives. The first has been to dismantle any barriers to the exercise of unaccountable private power. The second had been to erect them to the exercise of any democratic public will.

Its trademark policies of privatization, deregulation, tax cuts and free trade deals: these have liberated corporations to accumulate enormous profits and treat the atmosphere like a sewage dump, and hamstrung our ability, through the instrument of the state, to plan for our collective welfare. . .

At the very moment when climate change demands an unprecedented collective public response, neoliberal ideology stands in the way. Which is why, if we want to bring down emissions fast, we will need to overcome all of its free-market mantras: take railways and utilities and energy grids back into public control; regulate corporations to phase out fossil fuels; and raise taxes to pay for massive investment in climate-ready infrastructure and renewable energy — so that solar panels can go on everyone’s rooftop, not just on those who can afford it.

Neoliberalism has not merely ensured this agenda is politically unrealistic: it has also tried to make it culturally unthinkable. Its celebration of competitive self-interest and hyper-individualism, its stigmatization of compassion and solidarity, has frayed our collective bonds. It has spread, like an insidious anti-social toxin, what Margaret Thatcher preached: “there is no such thing as society.”

It’s always nice when these folks let the mask slip and reveal their hatred of individual freedom and capitalism, and the open embrace of a statism that is indistinguishable from fascism. Lukacs’s conclusion is: Jeremy Corbin will save us! You can expect the same impulse to dominate the Democratic Party as it heads toward 2020. Elizabeth Warren or Bernie will save us! Anything less than this will not be tolerated by the increasingly leftist base of the Democratic Party. And this is the best thing Trump has going for him.