Are We Entering a New Political Era?

Gary Gerstle, an American historian at the University of Cambridge, has argued, in the journal of the Royal Historical Society, that “the last eighty years of American politics can be understood in terms of the rise and fall of two political orders.” The first was the “New Deal order,” which began in the thirties, when Franklin Delano Roosevelt established a social safety net that Americans eventually took for granted. Next came the “neoliberal order,” during which large parts of that safety net were unravelled. The axioms of neoliberalism—for instance, that deficit spending is reckless, free markets are sacrosanct, and the government’s main job is to get out of the way—felt radical when they were proposed, in the forties and fifties, by hard-line libertarian intellectuals like Friedrich Hayek and Milton Friedman. In the sixties and seventies, these axioms became central to the New Right. By the late eighties, the ideas that had been thought of as Reaganism were starting to be understood as realism. A new order had taken hold.

A political order is bigger than any party, coalition, or social movement. In one essay, Gerstle and two co-authors describe it as “a combination of ideas, policies, institutions, and electoral dynamics . . . a hegemonic governing regime.” Dwight Eisenhower, a Republican President during the New Deal order, wouldn’t have dreamed of repealing Social Security, because he believed that Americans had come to expect a vigorous welfare state. Bill Clinton slashed welfare, in large part, because he thought that the era of big government was over. Richard Nixon, a conservative by the standards of his time, pushed for a universal basic income; Barack Obama, a liberal by the standards of his time, did not. A truly dominant order doesn’t have to justify itself, Gerstle has argued; its assumptions form the contours of common sense, “making alternative ideologies seem marginal and unworkable.” Obama recently admitted as much in an interview with New York, in a passive, mistakes-were-made sort of way. “Through Clinton and even through how I thought about these issues when I first came into office, I think there was a residual willingness to accept the political constraints that we’d inherited from the post-Reagan era,” he said. “Probably there was an embrace of market solutions to a whole host of problems that wasn’t entirely justified.” As President, Obama could have proposed, say, tuition-free public college or a universal-jobs program—Democrats had large majorities in both the House and the Senate—but he and his advisers considered such ideas marginal and unworkable, because they were negotiating, in a sense, not only with Mitch McConnell but also with the ghost of Milton Friedman.

Reed Hundt, an early Obama donor, worked on the Presidential transition team in 2008. In Hundt’s 2019 book, “A Crisis Wasted,” he argues that Obama and his top aides badly mishandled the 2008 financial crash, largely because they were in thrall to the “neoliberal dogmas” of the time. In December of 2008, Christina Romer, the incoming chair of the Council of Economic Advisers, ran the numbers, Hundt writes, and found that “the economy needed $1.7 trillion of additional spending in order to produce full employment.” But Rahm Emanuel, a veteran of the Clinton Administration and Obama’s designated chief of staff, had already decreed that Congress would be spooked by any price tag “starting with a t.” Larry Summers, a budget hawk who’d served as Clinton’s Treasury Secretary, agreed. When Obama met with his economic-policy team later that month, Romer opened her remarks by saying, “Mr. President, this is your ‘holy shit’ moment.” But then, acting on Summers’s instructions, she presented four potential stimulus packages, ranging from $550 billion to $890 billion.

After the financial crisis, it became increasingly clear that the market was not going to self-correct, and that inequality was likely to keep widening. The Tea Party mobilized on the right, and Occupy Wall Street on the left. The Black Lives Matter movement, the mounting salience of the climate emergency, and the covid pandemic have since heightened the dual sense of urgency and possibility. “The Great Recession of 2008 fractured America’s neoliberal order,” Gerstle has written, “creating a space in which different kinds of politics, including the right-wing populism of Donald Trump and the left-wing populism of Bernie Sanders, could flourish.” By the end of the current decade, he continues, we will see whether the neoliberal order “can be repaired, or whether it will fall.” He wrote these words three years ago, in a journal article called “The Rise and Fall (?) of America’s Neoliberal Order.” He is now at work on a book with the same title, minus the question mark.

In March, in the East Room of the White House, President Biden met with a handful of writers and scholars, including Eddie Glaude, the chair of the African-American-studies department at Princeton. “It was duly noted that we’re at a conjunctural moment,” Glaude told me. “Reaganism is collapsing. The planet is dying in front of our eyes.” Annette Gordon-Reed, a historian and law professor at Harvard who also attended the meeting, said that, since the Reagan era, many citizens have come to expect “a government that can’t do anything except cut taxes.” But that vision may soon be overtaken by a new one. “We’ve already seen, under Trump, an early version of what a right-wing post-neoliberal order might look like,” Gerstle said. “Ethno-nationalist, anti-democratic, trending toward authoritarianism.” A progressive version of post-neoliberalism is “harder to nail down,” he continued, but “we might be starting to see it unfold under Biden.” He noted the irony that “for all of Obama’s charisma, and Joe Biden’s reputation for political caution and for stumbling over his words, Biden seems likelier to emerge as the larger-than-life figure. This is where personality matters less than circumstance. Obama was stuck within a preëxisting order, but Biden is inheriting a more fluid moment.”